Despite substantial interest in the potential for mobile money to positively impact the lives of the poor, little empirical evidence exists to substantiate these claims. In this paper, the authors present the results of a field experiment in Afghanistan that was designed to increase adoption of mobile money, and determine if such adoption led to measurable changes in the lives of the adopters.
The specific intervention they evaluate is a mobile salary payment program, in which a random subset of individuals of a large firm were transitioned into receiving their regular salaries in mobile money rather than in cash. They separately analyze the impact of this transition on both the employer and the individual employees. For the employer, there were immediate and significant cost savings; in a dangerous physical environment, they were able to effectively shift the costs of managing their salary supply chain to the mobile phone operator.
For individual employees, however, the results were more ambiguous. Individuals who were transitioned onto mobile salary payments were more likely to use mobile money, and there is evidence that these accounts were used to accumulate small balances that may be indicative of savings. However, they find little consistent evidence that mobile money had an immediate or significant impact on several key indicators of individual wealth or well-being.
Taken together, these results suggest that while mobile salary payments may increase the efficiency and transparency of traditional systems, in the short run the benefits may be realized by those making the payments, rather than by those receiving them.
This research was funded under the Private Enterprise Development in Low-Income Countries (PEDL) programme.
Blumenstock, J., Callen, M., Ghani, T. Promises and Pitfalls of Mobile Money in Afghanistan: Evidence from a Randomized Control Trial. (2015) 10 pp