Mobile money access lifted 2 percent of Kenyan households out of poverty, finds new study

https://www.eurekalert.org/pub_releases/2016-12/ifpa-mma120716.php

Public Release: 8-Dec-2016
Mobile money access lifted 2 percent of Kenyan households out of poverty, finds new study
New study in Science finds poor rural women with access to sending and receiving money by mobile phone switched from farming to business and saved more, reducing poverty for hundreds of thousands of people
Innovations for Poverty Action

A new study today shows that the expansion of mobile money helped bring hundreds of thousands of Kenyans out poverty, especially those in female-headed households. The study, published in Science, examined how M-PESA, Kenya's text message-based payments system, spread across the country over six years. The researchers tracked the economic progress of thousands of households and estimate that the expansion of M-PESA lifted 194,000 households, or two percent of households in the country, above the poverty line, and that these effects were partly driven by women's access to the new way of sending and receiving money.

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"What we saw over six years was impressive -- as people were given access to this low-cost means of sending and receiving cash, poverty, particularly extreme poverty, decreased, and especially for households headed by women," according to Suri. "We saw that when M-PESA came to an area, women shifted their occupations and their savings went up. We estimate that about 185,000 women shifted occupations from subsistence farming to business or retail sales.

Previous studies of programs thought to reduce poverty have had mixed results; for example, multiple studies have shown that microloans, while helpful business tools for a few, do not on average bring borrowers out of poverty.

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