Payment Mechanisms and Anti-Poverty Programs: Evidence from a Mobile Money Cash Transfer Experiment in Niger

Categories : Mobile money & mobile technology, Technology and Operational Enablers



Cash transfers have become an increasingly important component of social protection policies in both developed and developing countries. While such programs are often implemented electronically in developed countries, in many developing countries with weak financial infrastructure, such transfers are distributed manually, resulting in significant costs to program recipients and the public sector alike. The introduction of mobile money systems in many developing countries offers new opportunities for distributing cash transfers. Using data from a randomized experiment of a mobile money cash transfer program in Niger, this paper finds evidence of benefits of this new system: Household and child diet diversity was 9-16 percent higher among households who received mobile transfers and children ate 1/3 more of a meal per day. These results can be partially attributed to time savings associated with mobile transfers, as program recipients spent less time traveling to and waiting for their transfer. They are also associated with shifts in intra-household bargaining power for women. These results suggest that electronic transfers may address key logistical challenges in implementing cash transfer programs in developing countries, but that sufficient investment in the payments infrastructure is needed.