May 31, 2013
Kenyans Find the Unintended Consequences of Mobile Money
Vodafone-owned Safaricom, the dominant mobile provider in Kenya, uses it as a brand name for a service that allows customers to transfer airtime to each other. According to a new study (pdf) funded by the Institute for Money, Technology and Financial Inclusion (IMFTI), the word has also come to refer to the way money in a mobile account slips away, drip by drip, as friends and family ask for favors.
People who work in economic development use the term “unbanked” to describe the roughly one in three people in the world who don’t have a formal bank account. They represent 60 percent of adults in developing countries and 77 percent of adults making less than $2 a day.
According to a paper published in March that looked at text and call data in three African countries to figure out what drives adoption of mobile money, the authors discovered a gap between rich and poor. First, you’re more likely to use mobile money if you’re more likely to make calls and send texts. That is, you’re more likely to use mobile money if you’re spending money already anyway. Second, people with more contacts who have mobile money accounts are more likely to have accounts themselves. This is true in each country, regardless of how developed the mobile money market is.
So data show that, even within poorer countries, the poor lag the rich in mobile money adoption.
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