Mobile Money, Remittances and Rural Household Welfare: Panel Evidence from Uganda

This paper seeks to investigate the impact of mobile money access on the welfare of rural households in Uganda. It particularly targets households in rural locations which often tend to have less access to formal banking services coupled with relatively high poverty rates. The research is based on two-year panel data of 907 households from 94 local councils in Uganda, collected in 2009 and 2012. The paper states that in the first four years of inception of mobile money in the country, the number of active mobile money subscribers expanded to over nine million. It also finds that mobile money is associated with a 69% increase in household per capita consumption, and households with at least one mobile money subscriber are 20% more likely to receive remittances than other households. The paper covers the following sections in detail:

• Background on mobile money in Uganda;
• Data used in the research and summary statistics;
• Empirical framework for the study with a focus on instrumental variable regression, tobit regression, and reduced form analysis;
• Results with a discussion on determinants of household mobile money adoption, relationship between mobile money and household per capita consumption, and the effect of mobile money subscription on remittances.