There are an estimated 411 million mobile money accounts worldwide, allowing even the poor in remote areas to send and receive money at low cost. How access to this financial tool affects long-term financial well-being, however, is not well understood. In Kenya, IPA worked with researchers to track the economic progress of households as the M-PESA mobile money service expanded over six years. In areas where M-PESA became more accessible, women were more likely to switch from farming to business occupations and to save more. Overall, an estimated 185,000 women changed occupations, and 194,000 households, primarily female-headed households, were lifted above the poverty line.
How access to mobile money affects the poor’s long-term financial well-being remains largely unknown. Previous research from Kenya has shown that in the short term, households with access to the M-PESA mobile money system and could receive remittances were better able to weather economic shocks, improving their financial resilience. Other research has shown that easier access to money may have different impacts on men compared to women. However researchers do not yet know what impact simple access to mobile money services does for households in the long term.
Researchers worked with Innovations for Poverty Action to measure the economic impact on Kenyan households over time as M-PESA agent networks expanded across the country. In areas designed to be representative of the country, excluding one sparsely populated northern region, five rounds of household surveys were conducted between 2008 and 2014. M-PESA expansion happened on its own and could not be randomized. Rather, the change in numbers of M-PESA agents in local areas between 2008 and 2010 was measured. The change was then compared to 2014 economic outcomes of surveyed households in each area.