Now Scientific Fact: Mobile Money Can Lift Women Out of Poverty

Mobile money is a service that allows monetary value to be stored on a mobile phone and sent to other users via text messages. Mobile money was first introduced in South Africa and the Philippines about 10 years ago. In Kenya, this service was introduced in March 2007 and was called “M-PESA” (M is for mobile, “pesa” is Swahili for “money”), which became the country’s dominant mobile money service. M-PESA has since been celebrated internationally as an innovation that can bring the unbanked population into the formal financial system, with associated impacts on economic well-being and welfare.

In Kenya, access to M-PESA increased per capita consumption levels and lifted 2% of households out of poverty. These impacts, which are more pronounced for women, are driven by changes in financial behavior such as increased financial resilience and saving, and labor market outcomes, such as moving out of agriculture and into business.

Although mobile money has been a huge success in Kenya, it didn't find the same grade of adoption and success in other parts of Africa. In Rwanda for example, mobile money adoption is much lower and a mobile money gender gap exists: female mobile money customers tend to less confident and have less trust in mobile money services than men. Nonetheless, even these women identified the ability to save money in their mobile wallets as a source of empowerment, and preferred mobile money because they felt they were more prone to make unnecessary purchases if they had cash on hand.

Based on these findings, ICT Works and Panoply Digital found six ways to make mobile money more attractive to women: Make mobile money a competitive alternative to cash, promote group savings via mobile money, consider women’s preferences for distribution and marketing, train more female mobile money agents, experiment different mobile money transaction fee models for the long run, and finally work on capacity building in financial literacy.

Source: ICT Works