Diffusion of mobile banking among rural women: Incentivizing local leaders vs. a marketing campaign

Abstract

Although mobile banking is seen as a solution to limited access to banking and financial services in the developing world, its adoption rates -especially among women - fall well below expectations. Hence, how can we promote its adoption among the socially and economically disadvantaged? We compare the effectiveness of two strategies, seeded diffusion via incentivised local leaders and a traditional marketing campaign, to promote the adoption of mobile banking among poor women in rural Peru. For the first one, we exploit the existence of local leaders who were trained by a local firm to promote the diffusion of a mobile banking application. For the second, we take advantage of an ongoing regional marketing campaign. Our findings show that the personalized seeded diffusion via local leaders is an effective promotion strategy. It significantly outperforms the traditional campaign, during which adoption rates are statistically indistinguishable from zero and similar to those in our control areas. We additionally show that the seeded incentivised diffusion relies on features of the underlying community networks known to promote trust. Our results emphasize the necessity of personalized approaches to promote technological products such a mobile banking among vulnerable populations. 

Keywords: mobile banking, field/natural experiments, network diffusion, marketing campaign, gender, innovation, word-of-mouth communication.

JEL Classification: C93