Mobile Money, Individuals’ Payments, Remittances, and Investments: Evidence from the Ashanti Region, Ghana

Abstract

While many studies that are focused on mobile money concern the effects of mobile money on consumption and informal risk-sharing, little evidence is provided on how mobile money influences payments and microbusiness investment for low-income people. We estimate the effects of access to mobile money on individuals' payments and income-generating activities by using data from the Ashanti Region of Ghana. Based on propensity-score matching and propensity-score weighted regression, we find that participation in mobile money is not dependent on individuals' financial status. We also observe that mobile-money users are likely to send and receive larger volumes of payments and remittances. We further find that mobile-money users are more likely to save higher amounts, invest more in education, microbusinesses, land, and buildings, and also consume more relative to non-users.

Response to Comments by Leo Van Hove on “Mobile Money, Individuals’ Payments, Remittances, and Investments: Evidence from the Ashanti Region, Ghana” Sustainability 2018, 10, 1409

“…We agree on this point. The findings for Hypothesis 1 (i.e., financial assets do not matter for mobile money usage) [2] are only applicable for mobile phone owners. That said, we would also like to emphasize that the reason for using only mobile phone owners for our study is to understand why the rate of mobile money usage is low while the rate of mobile phone ownership is extremely high in the country.…”

“…Mobile money account ownership is statistically significant on the log of yearly savings at a 1% level across all models, and this is consistent with the results on our original paper. The magnitude of the effect is less (1.124 compared to 1.548 in Reference [2] for PSM and 0.985 compared to 1.363 in Reference [2] for IPSWR) when we use the account ownership as expected. However, this does not mean that our results in Reference [2] are overestimating the impact of mobile money for the reasons discussed above.…”

“…The magnitude of the effect is less (1.124 compared to 1.548 in Reference [2] for PSM and 0.985 compared to 1.363 in Reference [2] for IPSWR) when we use the account ownership as expected. However, this does not mean that our results in Reference [2] are overestimating the impact of mobile money for the reasons discussed above. The magnitudes are less when we use account ownership (Table 1), because this excludes the increased savings for those users who save using means other than mobile money savings.…”

“…Mobile money engagement may enhance the tendency to save via several mechanisms. One can be the easy access to a saving mechanism on mobile money, as mentioned in our paper [2]. Another mechanism may be that mobile money engagement enhances the financial transaction of the user, which may increase the financial resources that they can save.…”

Comment on Apiors, E.K.; Suzuki, A. Mobile Money, Individuals’ Payments, Remittances, and Investments: Evidence from the Ashanti Region, Ghana. Sustainability 2018, 10, 1409

“…In a recent article, Apiors and Suzuki [1] examine, first, the socio-economic characteristics of mobile money users in Ghana and, second, the impact of mobile money use on a range of financial transactions conducted by individuals, including the amount that they save. In doing so, Apiors and Suzuki use primary survey data obtained from 577 respondents (338 users and 169 non-users) in the Ashanti region.…”