The Impact of Mobile Money on Long-Term Poverty: Evidence from Bangladesh

30 Pages Posted: 13 Jun 2022

See all articles by A.T.M. Hasibul Islam

A.T.M. Hasibul Islam

University of Victoria - Faculty of Social Sciences

Syed Abul Basher

East West University

Enamul Haque

East West University

Date Written: June 6, 2022

Abstract

Mobile money has become a lifeline for millions of poor people who have limited access to a formal banking system. It encompasses a wide range of benefits such as women’s empowerment, risk sharing, improved labor market outcomes and reductions in poverty. In this paper, we ask whether mobile money can help lift people out of poverty. Previous studies have addressed this question by using microanalyses of field experiments or longitudinal data on rural households, whereas we use district-level data to reevaluate the mobile money–poverty nexus. In particular, we study the impact of mobile money on district-level poverty in Bangladesh over the period 2010–2016. Our study finds that every 1 billion Taka (approximately US$ 11.76 million) increase in mobile money transactions via the bKash system in 2015 is associated with 0.71 percentage point reduction in the poverty rate in Bangladesh. The marginal impact ranges from 0.12 to 1.15 percentage points across the districts categorized in five groups as per 2010 poverty rates. The findings suggest that mobile money has been successful in fostering various poverty reduction initiatives and that targeted policy prescriptions can be devised to lift up poorer societies that are still outside the purview of mobile financial services. To further increase mobile money use, the government could use its own infrastructure to enhance mobile agent density in the poorest sectors of society.

Keywords: Mobile money, poverty, bKash, Bangladesh.

JEL Classification: G20, I32, L96, O16.

Suggested Citation

Islam, A.T.M. Hasibul and Basher, Syed Abul and Haque, A.K. Enamul, The Impact of Mobile Money on Long-Term Poverty: Evidence from Bangladesh (June 6, 2022). Available at SSRN: https://ssrn.com/abstract=4128510 or http://dx.doi.org/10.2139/ssrn.4128510

A.T.M. Hasibul Islam

University of Victoria - Faculty of Social Sciences

Department of Economics
University of Victoria
Victoria, BC, British Columbia V8P5C2
Canada

Syed Abul Basher (Contact Author)

East West University ( email )

Aftabnagar Main Road
Plot No. A-2
Dhaka, 1219
Bangladesh

HOME PAGE: http://https://sites.google.com/view/syedbasher

A.K. Enamul Haque

East West University ( email )

Bangladesh

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