Introducing Mobile Money in Rural Mozambique

Introducing Mobile Money in Rural Mozambique:
Evidence from a Field Experiment*
Cátia Batista† and Pedro C. Vicente‡
October 2012 - preliminary
Abstract
The limitations of access to finance in Africa, together with the recent boom in
cell phone use in that continent, created high expectations regarding the
introduction of mobile money in many African countries. The success story of
M-PESA in Kenya raised the bar further. In particular urban-rural money
transfers seem to be central for that success. We designed and conducted a field
experiment to assess the impact of randomized mobile money dissemination in
rural Mozambique. For this purpose we benefit from the fact that mobile money
was recently launched in the country, allowing for the identification of a pure
control group. This paper reports on the first results of this ongoing project after
the first wave of dissemination efforts in rural locations, which included the
recruitment and training of mobile money agents, community meetings and
theatres, as well as individual rural campaigning. We find clear adherence to the
services from administrative and behavioral data in the treatment group.
Financial literacy and trust outcomes are positively affected by the treatment.
We show behavioral evidence that the marginal willingness to remit was
increased by the availability of mobile money. Finally we observe that mobile
money substitutes traditional alternatives for both savings and remittances.
JEL Classifications: O12, O33, G20, R23.

Keywords: Mobile banking, remittances, savings, Mozambique.
*
We wish to thank Xavier Giné for helpful suggestions. We are particularly indebted to Nadean Szafman
and his team at Carteira Móvel for a fruitful collaboration. We would to thank our field supervisor Inês
Vilela for her outstanding work. We are also grateful to Alberto da Cruz, and the fieldwork teams headed
by Helena Afonso, Tiago Almeida, Marcelo Bambamba, Rute Caeiro, João Morgado, and Benjamin
Português for their dedication to this project. We thank seminar participants at the NOVAFRICA
conference for useful comments. We wish to acknowledge financial support from UKAid-funded
International Growth Centre (IGC), and from Nova School of Business and Economics. All errors are the
responsibility of the authors.
†
Nova School of Business and Economics, Universidade Nova de Lisboa, and IZA.
Email: [email protected].
‡
Nova School of Business and Economics, Universidade Nova de Lisboa, and BREAD.
Email: [email protected].
1
1. Introduction
Access to financial services is extremely limited in many parts of the world. In sub-Saharan
Africa, less than one in five households have a bank account, meaning deficient access to formal
savings. Africans also face substantial risks when sending or receiving remittances: Africa
includes the top five most expensive remittance corridors in world.1 At the same time, the use of
cell phones has been dramatically changing the African landscape: the take-up rate increased by
550 percent in the five years up to 2009. African cell phone subscribers are now estimated to have
exceeded 500 millions, surpassing the number of cell phone subscribers in the US.2 This
extensive spread of cell-phone technology has the potential to be used for many more purposes
than simple voice communication and text messaging. One such example is mobile money.
Mobile money was made popular by Safaricom’s M-PESA in Kenya, which started in March
2007. Mobile money typically allows four types of transactions: (i) depositing money at a mobile-
money agent against e-money (usable on the cell phone), (ii) transferring e-money to another
phone number, (iii) paying for products or services at agent shops (iv) exchanging e-money for
physical money at an agent outlet. By September of 2009 US$3.7 billion (close to 10 percent of
Kenya’s GDP) had been transferred over the system; in April of 2011 M-PESA had 14 million
subscribers and close to 28 thousand agents.3 Several studies analyzed the case of M-PESA in
Kenya. Mbiti and Weil (2010) identify increased frequency and overall volume of urban-rural
money transfers as the main driving force behind the success of M-PESA. They also emphasize
that M-PESA is frequently used as a storage-savings device for safety considerations. Jack and
Suri (2011) describe the M-PESA experience in detail and raise a number of interesting potential
economic effects and underlying mechanisms of mobile money. At the household these could
range from impacts on saving and investment, to risk spreading and insurance. Mas and
Morawczynski (2009) highlight appropriate liquidity management of rural agents (i.e., their
ability to meet customer requests for cash withdrawals), and transparent pricing as crucial
attributes of a successful mobile money product.
1
The figure on holding a formal bank account comes from a Gallup survey conducted in 18 Sub-Saharan
African countries in 2009. The costs of remittances are monitored by the World Bank at
remittanceprices.worldbank.org. See the report ‘Financing Africa: Through the Crisis and Beyond’, 2011,
sponsored by the African Development Bank, the World Bank, and Germany’s Federal Ministry for
Economic Cooperation and Development for additional descriptive data in support of low breadth and high
cost of financial services in Africa.
2
See the report ‘Information Economy Report’, 2009, by the United Nations Conference on Trade and
Development.
3
Safaricom, 2011.
2
The project we describe in this paper is an ongoing impact evaluation (randomized field
experiment) of the introduction of mobile money in rural locations of Mozambique. This paper is
to the best of our knowledge the first piece of causal evidence on the impact of mobile money.
Mobile money has been launched in 2011 by Mozambican Carteira Móvel and is branded as
mKesh. Our project aims to establish the causal effects of mobile money for a rural panel of
households. We are particularly interested on adoption of mobile money, effects on savings and
remittances as mediators for more fundamental outcomes in terms of patterns of consumption and
investment. A particular focus of this project motivated by the M-PESA findings is the remittance
channel: for this reason, apart from the mKesh dissemination we followed in rural locations, we
have ongoing dissemination of mobile money to the urban migrants corresponding to the rural
households we are studying. Our hypothesis is that dissemination of mobile money to these
migrants may increase remittances to the corresponding rural experimental locations. This paper
reports on outcomes gathered from rural experimental subjects from immediately after to two
months after rural dissemination, but before urban migrant dissemination.
Our field experiment reached 102 rural enumeration areas in the provinces of Maputo-Province,
Gaza, and Inhambane. Half of these locations had a set of activities relating to dissemination of
mKesh. These included the recruitment and training of an mKesh agent, a community theatre and
a community meeting where mKesh services were explained to the community, and a set of
individual dissemination activities. These activities included registration with mKesh and the
testing of several of its functionalities with trial money provided by the campaign team. 2011
individuals in total were randomly sampled to take part of the study. A random sub-group of the
individuals we follow in treatment locations were actually not given the individual treatment in
order to measure spillover effects. The outcomes we focus on in this paper were gathered from
the operator’s administrative records of transactions, and face-to-face individual surveying and
behavioral measurements after mKesh dissemination. We show results on adoption of mKesh,
both from administrative records and face-to-face behavioral measures. Our experimental results
are centered on information and trust survey outcomes, and on behavioral measures from simple
games of the marginal propensity to save and remit, both in general and by using mKesh.
We find promising results on mKesh adoption in our rural treatment locations. 64 percent of our
sample of treated individuals did at least one transaction after the dissemination activities (in the
period until approximately two months after the end of the fieldwork), as reported in
3
administrative data from the mobile operator. 81 percent of our treated individuals did not want to
withdraw the initial cash balance (around 2 USD) they got in their cell phone, despite availability
to help with the withdrawal by the mKesh campaign team. We also document clear improvements
in general financial literacy and specific knowledge about mKesh. The trust on the local agent
and mCel financial services also increased with intervention. Finally, we show that the marginal
willingness to send remittances gathered from a simple game conducted with all individuals in
our study that had migrants increased by 6-7 percent when contrasting treatment and control
groups. Marginal willingness to save in an analogous game was not affected. We identify clear
effects on using mKesh for both saving and remitting in these games. Overall these results point
to the clear potential of mKesh to be adopted in rural locations of Mozambique, to improve
financial literacy, and to increase remittances, as well as to substitute other means of saving and
remitting.
This paper is related to the literatures on savings and remittances, and the use of cell-phone
technology in developing countries. Karlan and Murdoch (2010) call for the understanding of the
impact of technology on savings, as unintended consequences are possible: liquidity may carry
self-control problems (as in Ashraf et al, 2006) and social pressure. Despite these concerns,
Dupas and Robinson (2010) show that access to non-interest-bearing bank accounts among self-
employed individuals in rural Kenya increased savings and their productive investment. Recent
work by Aycinena et al. (2011) provides causal evidence on transaction costs as a determinant of
remittance behavior. Ultimately this line of work aims to find changes in development outcomes
through an increase in remittances. That is one of the primary objectives of the field experiment
we describe here, even though we still cannot establish it with the data available. As made clear
in the literature review by Yang (2011), despite several attempts at it, there is still not conclusive
experimental evidence that migrant remittances have (or not) productive effects. Yang (2008) was
closest by employing exchange rate shocks induced by the 1997 Asian financial crisis: he finds
that increased migrant resources produced by exchange rate appreciation are used primarily for
investment in origin households, rather than for current consumption. This investment takes the
form of educational expenditures and entrepreneurial activities. This is line with other studies
focusing on African countries: on the impact of migration on education in Cape Verde (Batista et
al, 2012) and on entrepreneurship in Mozambique (Batista et al, 2011). This paper also links to
the emerging literature on the effects of information and communication technology on various
development outcomes. Jensen (2007) looks at the use of cell phones to improve market
efficiency in a local fish market in India. Aker (2010) studies the effects of cell phone
4
introduction on grain market outcomes in Niger. Aker et al (2010) analyze the impact of civic
education provided through cell phones on electoral behavior in the 2009 Mozambican elections.
This paper is organized as follows. In Section 2 we provide background for the introduction of
mobile money in Mozambique. Section 3 presents the experimental design, including treatment,
sampling, measurement, and specifications. Section 4 displays the econometric results: balance
tests, adoption outcomes, and impact of mobile money dissemination on information and trust,
and savings and remittances, including spillovers. Section 5 provides concluding remarks.
2. Background
In Mozambique there are around five million subscribers of mobile phone services
(corresponding to close to one fourth of the population). Geographical coverage extends to 80
percent of the population.4 A competitive market composed by state-owned mCel and Vodacom
(a subsidiary of the South-African multinational) has been in place since 2003. A third operating
license has recently been attributed to Movitel, a consortium majority-owned by Vietnamese
Viettel. In this context, Mozambican authorities passed legislation in 2010 that allows mobile
operators to partner with financial institutions in order to provide mobile money services.
Under this legislation, mCel constituted a new company, Carteira Móvel, which started offering
mobile money services, branded as mKesh, in January 2011. Note however that the first
advertising campaign of mKesh on national media was only aired in September 2011. Carteira
Móvel made an initial effort of recruiting mKesh agents – in a few months after September 2011,
1000 agents were recruited. However these agents were recruited mainly in urban locations, with
a particular emphasis in the Maputo city and province. When dealing with these agents, Carteira
Móvel has been emphasizing the selling of airtime (mCel credit). Carteira Móvel saw the
launching of our research project as the perfect opportunity to test the impact of mKesh
dissemination in rural locations of the country, while emphasizing the broader range of services
that is embedded in mKesh as a mobile money product. We may therefore infer that the rural
population in Mozambique was broadly not using mKesh before our experiment was initiated.
4
Computed from available data made available by mCel and Vodacom.
5
Indeed the potential of mobile money in rural Mozambique is enormous. Bank branches simply
do not reach beyond province capitals and some (but few) district capitals.5 Saving methods for
the rural population are often limited to keeping money ‘under the mattress’, keeping money with
local traders or authorities, and to participating in ROSCAs.6 None of these arrangements
typically pays interest, and some of them carry considerable risks. Transfers of money typically
require: either the rural individual to travel to the urban bank branch to send or receive a bank
transfer, or the sender to travel to the location of the recipient of the transfer, or the sending of the
money through a bus driver or other person. All these alternatives involve considerable costs, and
some of them considerable risks: indeed Mozambique is reported to be in the top four countries in
terms of most expensive remittances in Sub-Saharan Africa.7 Mobile money services as provided
through mKesh offer the possibility of saving securely (there is an application By Carteira Móvel
with the Bank of Mozambique for a savings account to be offered, involving the payment of
interest), and transferring money at considerably lower costs.
3. Experimental design
3.1. Treatment
The treatment, consisting of the dissemination of the mKesh services in 51 EAs of Maputo-
Province, Gaza, and Inhambane, was provided in coordination with Carteira Móvel, the mobile
banking operator in Mozambique. The treatment activities were divided into three phases: (i) the
recruitment and training of mKesh agents, (ii) the holding of a community theater and of a
community meeting describing mKesh, and (iii) individual dissemination of mKesh with our
panel of survey respondents.
The first phase consisted in the recruitment of one mKesh agent per EA (March-May 2012).
These were typically local vendors of groceries who had a cement shop. Three main criteria were
sought when proposing local vendors to become mKesh agents: they had to have a large number
of clients in their village (having full shelves was taken as an indicator of that condition), they
5
From the list of bank agencies made available by the Bank of Mozambique in 2011 for the 18 districts
that we cover in our study, only 37 bank agencies are reported to exist in those districts (just over two on
average per district).
6
We report for the sample of rural households that we study the following statistics: 63 percent save money
at home, 30 percent save money with a local trader, and 21 percent participate in a ROSCA. Only 21
percent report any money saved in a bank account.
7
See remittanceprices.worldbank.org.
6
needed a formal license to operate as vendors, and they needed a bank account. Each EA was
visited on purpose for the recruitment of the agents. Training of the agents followed in a second
visit. At this point in time, the contract signed by Carteira Móvel as well as agent materials were
handed out to the agents. The materials included an official poster (to identify the shop as an
mKesh agent), other mKesh advertising posters, and an agent cell phone to be used exclusively
for all mKesh transactions. A briefing describing the remaining dissemination activities was held
at this point. This included a description of the community theater and community meeting to be
held in the village, and the review of mKesh operations, with an emphasis on self-registrations of
clients, deposits, purchases in shop, and withdrawals.
The second phase of the treatment included a community theater and a community meeting. They
were typically held one after the other in close proximity to the agent’s shop. These events were
advertised during our baseline survey with the help of local authorities. The playing of the mKesh
jingle from the mKesh shop also helped drawing attention to the events. The script of the
community theater (available upon request) was the same for all treatment locations, and included
mentions of mKesh safety (based on a PIN number), savings using mKesh, transfers using
mKesh, and the self-registration process with mKesh. The context was a village scene, with a
household head and his family and neighbors. The community meeting, which had the presence
of village authorities, gave a structured overview of the mKesh service, and allowed interaction
with the community as questions and answers followed the initial presentation.
The third phase of the dissemination activities was conducted at the individual level for our
targeted individuals, i.e., those approached individually by mKesh campaigners. The individual
treatment was based on a leaflet distributed to the targeted individuals. This leaflet had a full
description of the operations made available by mKesh while providing the cell phone menus to
be used for each. The leaflet is displayed in Figure 1.
<Figure 1 near here>
Campaigners described the leaflet and asked targeted individuals whether they wanted to register
to the mKesh services. In the affirmative case, they helped targeted individuals following the self-
registration menu. This implied writing name/surname and providing the number of an identity
card. Then campaigners offered to deposit in the mKesh account of each targeted individual 76
Meticais (around 3 USD). Targeted individuals had to accompany the campaigners to the mKesh
7
shop. The deposit menu was then followed with the mKesh agent for the purpose of depositing
the 76 Meticais. After the deposit was made, campaigners helped targeted individuals checking
their balance in their mKesh accounts. Subsequently, each targeted individual was asked to buy
anything in the agent’s shop for the value of 20 Meticais. This transaction was then made in the
presence of the agent, which implied a commission of 1 Metical. Finally, targeted individuals
were explained how a transfer could be done to another cell phone and how they could withdraw
the remaining 50 Meticais in their account (this operation would imply a 5 Meticais commission,
which would make the total 76 Meticais deposited by campaigners in each account). These
operations were not conducted at this point. Targeted individuals were also briefed about the
pricing structure of the mKesh services (which makes a page in the mKesh leaflet). Please see
Figure 1 for all the menus followed by campaigners during the process just described.
The community and theater meetings as well as the individual treatment were conducted in the
period June-August 2012.8
3.2. Sampling and randomization
Our study concerns 102 EAs in the provinces of Maputo-Province, Gaza, and Inhambane. These
EAs were sampled randomly from the 2008 Mozambican census for the referred provinces; note
however the exception of Maputo-Province, for which only its northern districts were considered.
Two additional criteria had to be observed for an EA to be included in our sampling framework.
First, the EA had to be covered by mCel signal – this was first checked by drawing 5-km radii
from the geographical coordinates of each mCel antenna, and then by verifying the signal at the
actual location of each EA. Second, the district of the EA had to have at least one bank agency.
For the purpose of identifying the sampling framework as described, mCel made available the
geographical data on its antennae, and the Bank of Mozambique made available the data on the
location of all bank agencies in the country.
The individuals that took part in this study were drawn at the household level. We sought
household heads while following an n-th house walk departing from the center of the EA along
the main directions of walk in the EA. However, additional conditions had to be observed by
households to be included in our sample. All sampled households had to have an mCel cell phone
8
Visit www.novafrica.org for photos and films that depict some of the activities undertaken at the
community and individual level.
8
number. In addition, but only for half sample, the household head had to have a spouse or
son/daughter living in the Maputo city area, i.e., a close migrant in Maputo city. This migrant had
to have an mCel cell phone number. 2040 individuals responded the baseline survey, which
served the purpose of identifying all experimental subjects before the community-level and
individual-level treatment activities. The baseline survey was a fully-fledged household survey
that also covered consumption and investment patterns of the corresponding households. We
interviewed 20 individuals per EA.
The randomization of mKesh dissemination was performed by forming blocks of two EAs from
the set of 102 EAs. The blocks were selected by matching on shortest geographical distance. The
51 treatment EAs were then drawn randomly within each block. See Figure 2 for the location of
the 102 EAs in our study, divided between treatment and control. Note that the treatment at the
individual level as well as invitations for the community events as described above were
submitted to a subsample of the individuals in treatment locations. This subsample had on
average four individuals per EA and was drawn randomly within the EA. We call the individuals
that were given the individual treatment and the invitations within a treatment EA the targeted
individuals, and the individuals that were not given the individual treatment and the invitations
the untargeted individuals.
3.3. Measurement
Our measurement can be divided into adoption behavioral variables, survey variables related to
information and trust, and behavioral measures of marginal willingness to save and to remit to
migrants in the family. All measures that required the physical presence of the experimental
subjects were taken immediately after the individual treatment was submitted.9 Some adoption
variables including administrative data on the transactions conducted by our panel are available
for two months after the mKesh dissemination was finished on all treatment locations.
Our main adoption measures were taken from the administrative records of transactions carried
out by our targeted and untargeted individuals in treatment locations. These records were made
9
These measurements had 1 percent attrition when comparing to the baseline survey.
9
available by Carteira Móvel until the two months after the treatment was finished, i.e., until
October 2012. They include for each cell number registered with us and for each transaction
conducted: the date of the transaction, the type of transaction, and the amount involved in the
transaction.
Another adoption outcome to which we devote some attention was composed from observing
whether targeted individuals accepted the invitation to withdraw the cash they received as mKesh
balance during the individual treatment (after the purchase at the agent’s shop was carried out).
This balance was 55 Meticais (which included 5 Meticais commission in case the withdrawal was
actually done), around 2 USD. This invitation was posed at the end of the individual treatment, as
the beginning of the post-treatment measurement activities. In case the invitation was accepted
interviewers were available to help respondents withdrawing the mKesh balance.
During the post-treatment measurement activities we also proposed respondents in treatment

locations two kinds of actions based on the sending of SMS (text) messages to our hotline. Both
actions were meant to give a credible (behavioral) indication of whether these individuals were
planning to use (or using already) mKesh services. Both actions involved the cost of writing and
sending an SMS which could be small but is positive, giving some assurance of incentive-
compatibility.
Our first SMS proposal was termed SMS mKesh. Individuals were proposed to send an SMS
saying what part of mKesh they liked the most. A leaflet was left with the respondent explaining
SMS mKesh. This is in Figure 3. Our written example referred liking saving money on mKesh,
but any other service(s) offered by mKesh or any other aspect of the mKesh branding could be
referred. The incentive to send the SMS was presented as: if many SMS were received, Carteira
Móvel would try to improve the service focusing on the expressed preferences. The SMS mKesh
could be sent until August 31.
Our second SMS proposal was termed SMS mKesh Migrant. Individuals in treatment locations
were proposed to contact close migrants in their family (spouse and or sons/daughters) that live in
the Maputo city area. The cell phone numbers of these migrants were known to us from the
baseline survey. They would ask these migrants to send an SMS saying they knew about the
10
possibility of transferring money through mKesh. A leaflet was distributed to respondents
explaining SMS mKesh Migrant. This is in Figure 4. The incentive to send the SMS was that both
the respondent and the migrant would receive 50 Meticais in MKesh balance. The SMS mKesh
Migrant could be sent until August 31, with mKesh balance being transferred shortly after that
date.
We now turn to survey measurements related to information and trust. These survey questions
were submitted as part of the post-treatment activities. The information questions were on
financial literacy and on knowledge about mKesh. The literacy questions focused on whether
respondents knew what savings, transfers, deposits, withdrawals are. All these concepts were
mentioned and exemplified during the community and theater meetings and individual treatment.
The mKesh questions tested knowledge about the link to mCel, the range of services that mKesh
offers, and the role mKesh agents have on those services. The trust questions were of two kinds:
general trust on family neighbors, local traders, and cell phone operators; trust on savings and
transfers. The trust questions on savings and transfers measured trust on money saved with local
trader, money transferred through driver, money transferred through family member, money
transferred through bank transfer, and money transferred through ‘new mCel bank’. For each of
these questions we gave respondents two anchoring vignette questions in which we presented the
extreme positive and negative trust scenarios for the corresponding question. We used the
answers to the two vignette-questions to rescale answers given to the corresponding trust question
for each individual. Table 1 presents the exact phrasing of these survey questions.
<Table 1 near here>
Finally, we conducted simple games to elicit the marginal willingness to save and remit to close
migrants in the family living in the Maputo city area. Moreover, we distinguished between
savings or remittances using mKesh, and savings or remittances using an attractive baseline
alternative.
The savings game gave all individuals in both treatment and control locations 20 Meticais
(around 1 USD) in cash. The respondent could either keep the 20 Meticais in cash or ‘save’ them.
If the respondent answered he/she wanted to ‘save’, the respondent had to make an additional
11
decision. ‘Saving’ could be through depositing the 20 Meticais in the respondent’s mKesh
account, or through default saving. Default saving in rural Mozambique typically means saving
under the mattress. So we proposed the following type of default saving: depositing the 20
Meticais on a sealed envelope kept with the respondent, which would give the right to receive 10
Meticais in interest at the time of the next visit of the enumeration team, in case the envelope was
still sealed at the time of that visit. See sealed envelope used in Figure 5. Note that the time of the
next visit was uncertain when this game was run. The possibility of interest was meant to break
indifference between cash-in-hand and cash-in-envelope. That way, in case there was already
money under the mattress, the sealed envelope would become the most valuable 20-Metical note
under the mattress. It may be also seen as a hard test for the adoption of mKesh for saving.
The remittance game also gave all individuals in both treatment and control locations 20 Meticais
(around 1 USD) in cash. The respondent could either keep the 20 Meticais in cash or remit them
to a close migrant in the family living in the Maputo city area. If the respondent answered he/she
wanted to remit, the respondent had to make an additional decision. The remittance could be sent
through transferring the 20 Meticais through the respondent’s mKesh account, or through default
remitting. A default remittance in rural Mozambique typically means sending money through
someone, be it a family member, a friend, or a bus driver. So we proposed the following type of
default remittance: sending the 20 Meticais in an envelope through ‘us’ (the enumeration team),
without any costs. See Figure 5 for the envelope used for this purpose. We also believe this to be
an attractive alternative to mKesh as we were giving the money to begin with and so there was no
reason not to trust us to take the money to the migrant, and as we did not charge anything for the
remittance (something highly unusual for the typical default options people have in
Mozambique). Note that we also ran a version of the remittance game that did not allow
respondents to keep the cash: respondents could only choose whether to send the remittance
through mKesh or to send the remittance through ‘us’. This version of the remittance game,
which aims to assess adoption of mKesh for making transfers, was only run in treatment
locations.
3.4. Specifications
12
Our empirical approach is based on estimating treatment effects on a variety of outcome
variables. Namely, we are primarily interested in treatment effects on mKesh adoption (by
comparing targeted and untargeted individuals within treatment locations), information and trust,
and savings and remittances. We now describe the main econometric specifications we employed,
while using data at the individual level, for the estimation of these parameters.
Our design allowed us to estimate average treatment effects in different ways. Most simply, the
effect of interest (d) could be estimated through the specifications:

= + +
, (1)

= + ℎ
+
, (2)
where Outcome is an outcome of interest, i,l are identifiers for individuals and locations, is a
an dummy variable taking value 1 for targeted individuals within treatment locations, 0
otherwise, and
is a dummy variable taking value 1 for treatment locations, 0 otherwise.
We will employ equation (1) with data on treatment locations only for estimating the difference
for some adoption measures between targeted and untargeted individuals within treatment
locations. Adoption was very unlikely in control locations. We will employ equation (2) for
estimating the difference between targeted and control individuals, our main experimental results
(by employing data on targeted and control individuals only), and the difference between
untargeted and control individuals (by employing data on untargeted and control individuals
only). The latter is an approximation of indirect effects of the treatment or spillover effects.
Because of small sample size, we can also add location and individual-level control variables to
compose one of our main specifications. This is in line with Duflo et al. (2007), who argue that,
although controls do not generally change the estimate for the average treatment effect, they can
help explaining the dependent variable, and therefore typically lower the standard error of the
coefficient of interest. We then have the following core specifications:

= +
+ + +
, (3)

= +
+ + ℎ
+
, (4)
13
where
is a location-level vector of controls including regional dummies, and is a vector of
individual (demographic) controls. We display results for specifications (1)-(2) and for two
versions of specifications (3)-(4), one with regional dummies only, and the other with all location
and individual controls.
For simplicity and transparency in the presentation of results we employ OLS on all estimations
in this paper. We cluster standard errors at the level of the EA in all regressions at the individual
level.
4. Econometric results
4.1. Balance
We begin by showing balance tests for a wide range of baseline variables. In Tables 2 we analyze
location characteristics and demographic traits of our panel of experimental subjects, including
basic attributes (age, gender, education, and marital status), occupation, religion and ethnicity,
income and property, technology use and finance. At the location level we contrast treatment and
control locations. At the individual level, we are able to compare control individuals with
individuals in treatment locations that were reached individually by mKesh campaigners, i.e.,
targeted individuals, and with individuals that were not individually approached by campaigners,
i.e. untargeted individuals. Because all these variables are unaffected by the intervention, and
given our treatment assignment criteria, any differences between comparison groups should be
understood as a product of chance.
<Tables 2 near here>
Among location characteristics we only find one difference between treatment and control that is
statistically significant. Electricity supply is higher in control locations, but this difference is only
statistically significant at the 10 percent level. At the individual level, we do not find differences
across the three groups of respondents for basic demographics (age, gender, education, and
marital status), occupation, religion and ethnicity, technology use and finance. We do however
observe some differences for income and property. Specifically, owning some kinds of animals
(goats and chickens) is more frequent in treatment locations (both targeted and untargeted
14
individuals are more likely to have chickens when compared to control individuals. Moreover, we
also observe differences on the variables relating to owning fridges and to owning radios: but this
time it is less frequent that targeted individuals own this type of durables, when comparing to
control respondents.
4.2. Adoption
We begin by analyzing administrative records from Carteira Móvel on mKesh transactions of our
rural experimental subjects. At this point in time we have access to two months of data after the
mKesh dissemination efforts finished in the field in early August. We analyze here a range of
indicators of mKesh use at the individual level: first we consider all types of transactions; then we
distinguish between deposits, transfers received, transfers sent, purchases in shop, airtime
purchases, and withdrawals. For each of these types of mKesh use, we display three types of
outcomes: whether that transaction was performed at least one, the average value of transactions
(in Meticais), and the number of transactions. Note that the average value of transactions and the
number of transactions are considered for those that actually performed the transaction at least
once. We focus on simple averages for treatment locations and this is what we display in Tables 3
on the top row (with standard deviation). We also estimate the treatment effect in terms of the
same outcomes by comparing targeted to untargeted individuals within treatment locations.
Specifications (1) and (3) are used: we first employ a specification without controls, then we add
regional dummies, and finally we add location and individual controls to the regional dummies.10
These are secondary results: we may interpret this difference as coming from the fact that only
targeted respondents were invited to attend the community meeting and theatre, and were
approached for individual treatment by campaigners. However, untargeted individuals still live in
locations where an mKesh agent was recruited, and may still have attended the public events of
mKesh dissemination. Hence, it is likely that the treatment has impact on their behavior as well.
We observe considerable levels of mKesh adoption. Overall, we report that 64 percent of our
experimental subjects in treatment locations did at least one transaction in the period after
10
Location controls include whether the location has a primary school, a secondary school, a health center,
market vendors, police, church, meeting point, electricity supply, sewage, quality of mCel coverage, and
time distance by chapa (bus) to nearest bank. Individual controls include age, gender, years of education,
marital status dummies, religion dummies, ethnic group dummies, and property.
15
dissemination of mKesh until approximately two months after the last day of mKesh
dissemination activities in the treatment EAs. The average value of mKesh transactions at the
individual level was 172 Meticais (close to 6 USD), and the average number of transactions was
5.7 – these values do not take into account individuals performing no transactions. By looking at
the difference between targeted and untargeted individuals, we can conclude that targeted
individuals were more likely to have used mKesh. The point estimate was 0.57-0.58 percentage
points, which was statistically significant at the 1 percent level for all specifications employed.
Differences across targeted and untargeted were not significant for total value and number of
transactions.
We now look at specific types of transactions. 20 percent of our rural experimental subjects in
treatment EAs performed a deposit. The average deposit was 223 Meticais, and the average
number of deposits was 2.5. There is evidence that targeted individuals were 7-9 percentage
points more likely (than untargeted individuals) to make a deposit. 13/2 percent of our treated
sample received/sent a money transfer. The average values for the transfers were 60 (received)
and 69.2 (sent) Meticais. The average number of transfers received was 1.3, and the average
number of transfers sent was 1.1. Targeted individuals were 12 percentage points more likely to
receive a transfer, and 2 percentage points more likely to send a transfer. Regarding purchases in
shop, we find that 5 percent of our treated sample performs that transaction. The average value of
those purchases was 121 Meticais, and the average number of those purchases was 1.5. Targeted
individuals were 5 percentage points more likely to make a purchase in shop. Airtime purchases
constitute the most popular mKesh operation: 30 percent of our experimental subjects in
treatment locations performed at least one purchase of mCel airtime. The average value of the
airtime was 124 Meticais, and the average number of airtime purchases was 5.5. Targeted
individuals were 25-27 percentage points more likely to pay for airtime using mKesh. Finally,
only 7 percent of our treated sample withdrew any money from their mKesh accounts. The
average amount withdrawn was 148 Meticais, and the average number of withdrawals was 1.2.
Targeted individuals were 7-8 percentage points more likely to withdraw any money from their
mKesh balance.
Our measurement design also included other measures of adoption. Apart from the self-reported
intention to use mKesh gathered from the post-treatment survey, all the other measures we now
analyze are behavioral. We look at whether targeted individuals wanted to withdraw the 50
Meticais they got as mKesh balance at the end of the individual treatment – campaigners made
16
themselves available to help targeted individuals withdrawing that money from their mKesh
accounts. We also observe whether each individual in treatment locations actually sent an SMS
mKesh and an SMS mKesh migrant. Sending an SMS mKesh is interpreted as credible evidence
that the individual is interested in helping to improve mKesh services; sending an SMS mKesh
migrant is interpreted as credible evidence that the individual is planning to use mKesh for money
transfers. Finally, we had a version of the remittance game for treatment locations only: subjects
were only given two alternatives, sending the 20 Meticais through mKesh or through the default
method (us) – they could not keep the 20 Meticais for themselves. Whether subjects decided to
send the money transfer through mKesh constitutes our final measure of adoption of mKesh. For
all these measures of adoption we focus on averages for treatment locations. See Table 4 for these
adoption results. For all outcomes except withdraw 50 Meticais, we also present the difference
between targeted and untargeted individuals within treatment locations (untargeted individuals
were not given the 50 Meticais to begin with). The different specifications are as in Tables 3.
<Table 4 near here>
We find that 66 percent of the respondents in treatment locations indicated an intention to use
mKesh. Targeted individuals were 45-46 percentage points more likely to indicate this intention.
All these estimates, across the different specifications, are statistically significant at the 1 percent
level. We observe that 81 percent of our targeted respondents decided to keep the 50 Meticais in
their mKesh account, i.e., they opted for not withdrawing this balance despite the expressed
availability of campaigners to help them with the withdrawal. The SMS behavioral measures
were relatively unpopular. Still 7 percent of our experimental subjects sent an SMS mKesh. But
only 2 percent sent an SMS mKesh Migrant. This may be related to the requirement that the rural
respondent had to convince a corresponding Maputo migrant to send a specific text message: it
may have been too exigent given the level of detail involved, and the distance between sender
(rural subject) and receiver (urban migrant) of the detailed information. We do not identify
statistically significant differences between targeted and untargeted individuals on the sending of
the SMSs. Finally, we observe that 55 percent of our experimental subjects in treatment locations
decided to send the 20-Metical transfer through mKesh. We do not find statistically significant
differences between targeted and untargeted individuals on the sending of the 20 Meticais
through mKesh. Overall, the evidence gathered through these behavioral indicators of adoption
leads us to conclude for a clear willingness to use mKesh services. As expected we sometimes see
higher willingness to use mKesh for the targeted individuals in our sample for treatment EAs.
17
4.3. Information and trust
We now turn our attention to survey measures of financial literacy and knowledge about mKesh,
as well as to survey measures of trust. The survey questions that serve as the basis of these
measures are described in detail in Table 1. We follow Kling et al (2007) in that we normalize all
our survey measures using z-scores. This procedure enables homogenization of the interpretation
of our treatment effects. The z-scores are calculated by subtracting the control group mean and
dividing by the control group standard deviation. Thus, each variable has mean 0 and standard
deviation 1 for the control group. For each outcome we display in Tables 5 and 6 treatment
effects are estimated from employing specifications (2), i.e., without any controls, and (4), i.e.,
including regional dummies and then adding location and individual controls. Note that we only
consider data on targeted and control individuals in these regressions; hence, the treatment effects
we show in the referred tables represent the difference between targeted and control groups of
respondents.

In Tables 5 we find the results concerning financial and mKesh literacy. Our measures of
financial literacy are knowledge question about whether individuals understand the concepts of
saving, transfer, deposit, and withdrawal. These are simple questions whose answers where
classified as better or worse approximations of the full definitions. We can observe clear positive
effects of the treatment. All effects are statistically significant at the 1 percent level, and robust
across different specifications. Expressed in standard deviation units of the outcomes, these
effects range 0.24-0.26 for savings, 0.29-034 for transfers, 0.26-0.28 for deposits, and 0.25-0.27
for withdrawals. Even though there are small differences across the different outcomes, it is
interesting to note that the largest effects are for transfers and the smallest for savings. Our
outcomes linking to knowledge about mKesh relate to hearing about mKesh, what mKesh is,
what institution sponsors mKesh, and what services can be got with mKesh. Again, answers by
respondents were coded according to being closer or more distant from complete definitions. As
expected, targeted respondents show much higher levels of information about mKesh. All effects
are statistically significant at the 1 percent level, and robust across different specifications.
Results range 0.76-0.78 for heard about mKesh, 0.82-0.83 for what is mKesh, 0.95-0.96 for who
18
sponsors mKesh, and 1.04-1.05 for what can be done with mKesh (all effects are expressed in
standard deviation units). We may then conclude that the dissemination campaign was very
effective at increasing the knowledge rural Mozambicans have about finance/banking and about
mKesh.
In Tables 6 we find the results regarding trust. We begin by showing measures of subjective
general trust in family members, in neighbors, in the local shopkeeper, and in mCel. We observe
clear positive effects of the mKesh dissemination efforts on increasing trust in the local
shopkeeper. Indeed the local mKesh agent was typically the local shopkeeper, and so the mKesh
campaign was able to bring additional trust to this local trader. This effect is statistically
significant at the 1 percent level and robust across specifications. It ranges 0.21-0.27 standard
deviation units. We also find a negative impact of the campaign on trust in neighbors. This is a
0.13 effect, significant at the 5 percent level. However it turns insignificant when location and
individual controls are added. Our best interpretation for this effect is that since the campaign
underlined the security advantages of mKesh for storing money, i.e., PIN protection, over
traditional methods of storing money under the mattress or with neighbors, this emphasis may
have caused a shift from trusting in neighbors. We do not find statistically significant changes on
trusting in family or in the cell phone operator mCel. We then analyze treatment effects on
trusting money transfers carried out through different channels: via bus driver, via friend or
family member, via bank transfer, and via ‘new mCel bank’ (this was the most parsimonious way
to refer to mKesh in both treatment and control locations). We show results regarding the simple
answers to these subjective questions (Table 6b). We also show results for adjusted measures of
the same outcomes (Table 6c), in which we take into account hypothetical extreme situations
(anchoring vignettes) in order to take into account individual approaches to the subjective scale.
Specifically, we adjust for the average response in the two extreme anchoring vignettes
corresponding to a given money transfer method. Refer to Table 1 for the vignettes employed in
each of these measures of trust. Hence, the adjusted measures attempt to account for the different
pre-disposition of individuals to trust or distrust each channel. For both unadjusted and adjusted
measures of trust, we only find statistically significant effects for trust in transfer via ‘new Mcel
bank’. These effects are 0.38-0.44 (unadjusted) and 0.26-0.30 (adjusted), and are significant at the
1 percent level. Classical methods for money transfer do not seem to have either benefitted or
suffered from the treatment. We can conclude that the mKesh dissemination activities increased
trust in local shopkeepers and in money transfers with the help of mCel.
19
4.4. Savings and remittances
We conducted games aimed to measure the willingness of our experimental subjects to save and
remit. Since these behavioral measures were gathered in a setting where decisions were made
against real money, they may be used to credibly show whether we should anticipate real effects
of mKesh on savings and remittances. The assumption is that changes in the marginal willingness
to save and remit translate into similar changes in the total savings these households hold and
remittances these households send over a meaningful period of time. Note that the sending of
small remittances in our games can always be interpreted as signaling the existence of the new
method for transferring method and the need to receive remittances from urban migrants in the
closest family. Hence, despite the fact that objectively we only measure willingness of our rural
sample to send money, we may (less objectively) interpret effects on receiving remittances in the
same direction. We show the corresponding results in Table 7. For each outcome we display in
treatment effects without employing any controls, with regional dummies only, and with regional
dummies as well as location and individual controls. Our focus is on contrasting targeted
respondents to control respondents.
<Table 7 near here>
We show treatment effects both on willingness to save/remit and willingness to save/remit

through mKesh. All dependent variables are binary. We find that overall willingness to remit
increases with mKesh dissemination, while overall willingness to save does not seem to increase
(not significantly at standard statistical levels). The overall effect on remittances is 6-7 percentage
points. This estimate is statistically significant at the 5 or 10 percent levels. We also observe that
the willingness to save through mKesh and the willingness to remit through mKesh clearly
increase when comparing targeted and control experimental subjects. For savings the effect is 23-
25 percentage points. For remittances the effect is 26-27 percentage points. All these estimates
are significant at the 1 percent level. We infer from these results that the dissemination of mKesh
induced an increase on the willingness to send money transfers independently of the money
transfer method, and that at the margin mKesh substituted traditional methods of saving and
remitting. We see these results as an interesting indication of what may be longer-term effects of
mobile money on savings and remittances of rural households in Mozambique.
20
4.5. Spillovers
We now devote our attention to the comparison between untargeted individuals in treatment
locations and control individuals. We look at the main experimental outcomes from before, i.e.
information and trust survey measures, and savings and remittances behavioral measures. The
corresponding treatment effects may be interpreted as spillover effects given that untargeted
individuals were not individually approached by mKesh campaigners. Note however that these
spillovers may be due to attendance at the community meeting or the community theatre that
were held for mKesh dissemination (despite the fact that only targeted individuals were explicitly
invited). Other possible explanation for the spillover effects is social network transmission
through the targeted. See Tables 8 for the results. The specifications we employ are depicted in
equations (2) and (4) when employing untargeted and control individual data. We display
estimates of treatment effects when employing no controls, when adding regional dummies, and
when adding location and individual controls in addition to regional dummies.
We look for spillovers regarding knowledge about savings, knowledge about transfers, heard
about mKesh, trust in local shopkeeper, and trust in transfer via ‘new mCel bank’ (adjusted by the
corresponding anchoring vignettes). We had found clear treatment effects for all these outcomes
when contrasting targeted and control respondents. We observe that knowledge about savings
increased by 0.15-0.17 standard deviation units, significant at the 10 percent level. Knowledge
about transfers increased by 0.22-0.34, significant at the 1 or 5 percent levels. Hearing about
mKesh increased by 0.18-0.21, significant at the 5 or 10 percent levels. We do not see significant
changes in trust measures, with the exception of trust in local shopkeeper when employing full
controls. We seem to be able to report lower weaker but positive spillover effects on information
and trust outcomes. Turning to the saving and remittance games, we estimate spillover effects for
the marginal willingness to save/remit, and the marginal willingness to save/remit through
mKesh. We find results similar to the ones encountered for the targeted vs. control comparison.
Overall remittance increases by 9-12 percentage points for the untargeted. These estimates are
significant at the 5 or 10 percent levels. Saving through mKesh and remittance through mKesh
also increase for the untargeted, by 0.15-0.19 and 0.24-0.31 percentage points respectively. These
effects are significant at the 1 or 5 percent levels. We conclude that spillovers were significant for
21
savings and remittances. These spillovers were in fact similar to the effects we identified for the
individuals that were individually approached by campaigners.
5. Concluding remarks
This paper presented evidence on the impact of mobile money (mKesh) dissemination in rural
Mozambique. Initial evidence points to a high rate of mKesh adoption. Financial literacy and trust
on local agents improved due to the availability of mKesh. We also find that the marginal
willingness to send remittances increases. We do not find the same result for savings. This is in
line with descriptive evidence for M-PESA in Kenya, which emphasizes the importance of
mobile money for increasing remittances. We find that mKesh substitutes baseline methods for
both saving and remitting.
This paper is about the first results of this experiment. We plan to continue disseminating mKesh
through urban migrants with a direct kinship connection (spouses, sons/daughters) to our panel of
rural experimental subjects. We will conduct a sub-experiment with urban migrants by deploying
three types of dissemination treatments: one in which basic information about mKesh is given and
some experimentation is induced (just like what we did for their rural counterparts), one in which
in addition to the first we subsidize mKesh operations by giving a price bonus per transactions
(price margin), and one in which in addition to the first we give an initial mKesh balance for
improving trust in the service (trust margin). The migrants will be contacted face-to-face – this
contact will allow gathering survey and behavioral information from these migrants. Our main
objective is to study the determinants of adoption of mKesh services, with a particular focus on
remittances. Crucially we plan to continue measuring adoption at both rural and urban ends of our
enlarged panel (i.e., including the migrants) by making use of mKesh administrative records. We
will revisit our rural subjects to conduct a fully-fledged household survey in 2013, comparable
with the baseline one we already conducted. Savings and remittances are hypothesized to be
central to mediating any effects we may find on consumption and investment patterns of these
rural households.
Of course the research agenda on the impact of mobile money is endless. Much more should be
done on understanding how mobile money as a platform can carry a plethora of financial services
that can be of great impact for unbanked populations. These services can go from simple savings
accounts to more complicated financial products related to farmer insurance. Since mobile money
22
platforms can represent a revolution in banking, and banking is a very special industry with
special regulation needs by central banks, rigorous impact evaluation can shape the way the
revolution may happen.
23
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24
Figure 1: mKesh leaflet
Front.
Main operations:
Self-registration.
Deposit.
25
Checking balance.
Paying for expenses at the mKesh shop.
Other operations and pricing:

Transfer.
26
Withdrawal.
Pricing.
27
Figure 2: Experimental locations
28
Figure 3: SMS mKesh
29
Figure 4: SMS mKesh Migrant
30
Figure 5: Envelopes for default options in savings and remittance games
Savings envelope (with sealing wax).
Remittance envelope.
31
Table 1: Information and trust survey outcomes - phrasing (English translations) and scales.
original
variable phrasing of the question
scale
Please tell me what can be understood as savings. Answers ranged from the respondent not knowing to the respondent
knowledge about savings 1 to 3
mentioning keeping money for later (to reach an objective or deal with an emergency).
Please tell me what can be understood as money transfer. Answers ranged from the respondent not knowing to the
knowledge about transfers 1 to 3
respondent mentioning the passing money from one person to another.
financial literacy
Please tell me what can be understood as bank deposit. Answers ranged from the respondent not knowing to the respondent
knowledge about deposits 1 to 3
mentioning going to the bank to ask them to keep some money. Other.
Please tell me what can be understood as bank withdrawal. Answers ranged from the respondent not knowing to the
knowledge about withdrawals 1 to 3
respondent mentioning going to the bank to take out some money.
heard about mKesh Have you heard about mKesh? Possible answers: No-Yes. 0-1
What is mKesh? Answers ranged from the respondent not knowing to the respondent mentioning that mKesh is mCel's
what is mKesh 1 to 7
mobile money provider 'the bank in your hand' (mKesh slogan).
information abot mKesh
who sponsors mKesh Who sponsors mKesh? mCel/Other/Does not know 0 to 2
Which services does mKesh offer? Answer summarizes total number of correct answers, ranging from the respondent
what can be done with mKesh 0 to 6
mentioning deposits, withdrawals, transfers, saving on the cell phone, paying for goods in shop, buying mCel airtime.
How much do you trust the following people? Your family/Your neighbors/ Local shopkeepers/mCel. Distrust a lot-Trust a
general trust 1 to 5
lot.
(Extreme positive vignette:) Tobias has a family member living in Maputo who is going to send him 1000 Meticais via a bus
driver that is his friend and that has been working as a bus driver for the last 5 years. The bus driver charges 50 Meticais for 1 to 5
the service. How much do you trust that Tobias will receive this money? Distrust a lot-Trust a lot
(Extreme negative vignette:) Samuel has a family member living in Maputo who is going to send him 1000 Meticais via a bus
transfer via bus driver
driver that he never saw before and that has been working as a bus driver for just the last 3 months. The bus driver charges 50 1 to 5
Meticais for the service. How much do you trust that Samuel will receive this money? Distrust a lot-Trust a lot
How much do you trust that you will receive any money sent by your family in Maputo via a bus driver? Distrust a lot-
1 to 5
Trust a lot
(Extreme positive vignette:) Domingos has a family member living in Maputo who is going to send him 1000 Meticais via a
brother that will visit the village. Domings pays a small gratification to his brother to thank the service. How much do you 1 to 5
trust that Domingos will receive this money? Distrust a lot-Trust a lot
(Extreme negative vignette:) Horácio has a family member living in Maputo who is going to send him 1000 Meticais via
transfer via friend or family
someone that will visit the village. Horácio pays a small gratification to that person to thank the service. How much do you 1 to 5
trust that Horácio will receive this money? Distrust a lot-Trust a lot
How much do you trust that you will receive any money sent by your family in Maputo via a friend or family member
1 to 5
visiting you village? Distrust a lot-Trust a lot
trust on transfers (with vignettes)
(Extreme positive vignette:) Lucas has a family member living in Maputo who is going to send him 1000 Meticais via a bank
transfer to the local agency of BIM (a large Mozambican bank) which is 30min away from Lucas' village. How much do you 1 to 5
trust that Lucas will receive this money? Distrust a lot-Trust a lot
(Extreme negative vignette:) Elias has a family member living in Maputo who is going to send him 1000 Meticais via a bank
transfer via bank
transfer to the local agency of a small and unknown bank which is 30min away from Elias' village. How much do you trust 1 to 5
that Elias will receive this money? Distrust a lot-Trust a lot
How much do you trust that you will receive any money sent by your family in Maputo via a bank transfer? Distrust a
1 to 5
lot-Trust a lot
(Extreme positive vignette:) Pedro has a family member living in Maputo who is going to send him 1000 Meticais via a bank
transfer to new local branch of the new mCel bank, which happens to be in the center of the village. How much do you trust 1 to 5
that Pedro will receive this money? Distrust a lot-Trust a lot
(Extreme negative vignette:) Daniel has a family member living in Maputo who is going to send him 1000 Meticais via a
transfer via 'new mCel bank'
bank transfer to new local branch of the new mCel bank, which is 30min away by bus from his village. How much do you 1 to 5
trust that Daniel will receive this money? Distrust a lot-Trust a lot
How much do you trust that you will receive any money sent by your family in Maputo via the new mCel bank which
1 to 5
works from a shop in your village? Distrust a lot-Trust a lot
32
Table 2a: Differences across treatment and control locations.
control treatment difference
0.940 0.979 0.039
has primary school
(0.040)
0.389 0.247 -0.143
has secondary school
(0.091)
0.646 0.719 0.073
has health center
(0.093)
0.603 0.555 -0.048
has market vendors
(0.099)
0.510 0.501 -0.010
has police
(0.100)
0.981 0.981 -0.001
has church
(0.027)
0.468 0.382 -0.087
has meeting point
(0.098)
0.619 0.427 -0.192*
has electricity supply
(0.098)
0.136 0.090 -0.046
has sewage
(0.062)
4.621 2.319 -2.302
quality of mCel coverage
(1.798)
0.249 0.213 -0.035
has paved road access
(0.084)
0.706 0.723 0.017
has land road access
(0.090)
31.311 28.260 -3.050
price of transportation to the nearest bank - MT
(3.062)
61.377 102.779 41.402
time distance to nearest bank - minutes
(36.368)
Note: Standard errors of the differences reported in parenthesis; standard errors are corrected by clustering at
the location (enumeration area) level. * significant at 10%; ** significant at 5%; *** significant at 1%.
33
Table 2b: Differences across treatment-targeted, treatment-untargeted, and control groups.
difference to
treatment - difference to treatment -
control untargeted
targeted targeted group untargeted
group
38.524 36.888 -1.636 37.364 -1.160
age
(1.054) (1.452)
0.627 0.609 -0.018 0.682 0.054
gender
(0.036) (0.046)
5.554 5.736 0.182 5.380 -0.174
years of education
(0.312) (0.406)
basic 0.176 0.200 0.024 0.168 -0.008
demographics single
(0.023) (0.037)
0.665 0.644 -0.021 0.670 0.005
married
(0.029) (0.039)
0.052 0.057 0.005 0.061 0.010
separated
(0.011) (0.018)
0.107 0.098 -0.009 0.101 -0.006
widowed
(0.018) (0.024)
0.464 0.427 -0.037 0.455 -0.009
farmer
(0.040) (0.060)
0.087 0.106 0.019 0.146 0.059
vendor
(0.019) (0.039)
occupation
0.063 0.073 0.010 0.073 0.010
manual worker
(0.015) (0.023)
0.050 0.064 0.014 0.045 -0.005
teacher
(0.015) (0.019)
0.046 0.061 0.015 0.043 -0.003
non-religious
(0.014) (0.019)
0.350 0.307 -0.043 0.310 -0.040
catholic
(0.035) (0.049)
0.170 0.193 0.023 0.217 0.048
zion
(0.035) (0.049)
0.401 0.419 0.018 0.418 0.017
other christian
(0.040) (0.053)
religion and 3.797 3.732 -0.065 3.839 0.041
religious intensity
ethnic group (0.104) (0.137)
0.706 0.688 -0.019 0.706 -0.000
changana
(0.082) (0.084)
0.075 0.069 -0.007 0.051 -0.025
bitonga
(0.042) (0.043)
0.135 0.129 -0.006 0.141 0.006
chitsua
(0.056) (0.063)
0.051 0.082 0.030 0.073 0.022
chopi
(0.040) (0.039)
Note: Standard errors of the differences reported in parenthesis; standard errors are corrected by clustering at the location (enumeration area) level. * significant at
10%; ** significant at 5%; *** significant at 1%.
34
Table 2c: Differences across treatment-targeted, treatment-untargeted, and control groups.
difference to
treatment - difference to treatment -
control untargeted
targeted targeted group untargeted
group
2,734.241 2,638.780 -95.461 3,011.838 277.597
individual monthly income - MT
(420.717) (725.576)
0.863 0.883 0.020 0.887 0.024
machamba
(0.028) (0.037)
0.362 0.465 0.103*** 0.441 0.079
has goats
(0.038) (0.050)
0.277 0.354 0.077 0.328 0.051
has pigs
(0.048) (0.054)
0.588 0.679 0.091** 0.688 0.100**
has chicken
(0.037) (0.049)
0.283 0.315 0.031 0.263 -0.020
has ducks
(0.030) (0.042)
income and 0.555 0.558 0.002 0.565 0.010
owns mosquito net
property (0.049) (0.061)
0.146 0.106 -0.039* 0.118 -0.027
owns fridge
(0.023) (0.031)
0.031 0.042 0.011 0.038 0.007
owns sewing machine
(0.010) (0.022)
0.512 0.513 0.001 0.500 -0.012
owns radio
(0.031) (0.048)
0.395 0.355 -0.039 0.357 -0.038
owns tv
(0.044) (0.054)
0.164 0.181 0.016 0.114 -0.050
owns bike
(0.031) (0.035)
0.017 0.027 0.011* 0.016 -0.000
owns motorcycle
(0.006) (0.013)
0.067 0.044 -0.024** 0.032 -0.035**
owns car
(0.010) (0.015)
4.823 4.824 (0.001) (4.876) (0.053)
frequency of cell use
0.032 0.043
0.265 0.310 0.045 0.202 -0.063
has bank account
(0.035) (0.044)
0.218 0.211 -0.007 0.200 -0.018
participates in rosca
technology and (0.031) (0.044)
finance 4,731 5,312 (581) 3,268.521 -1,463
total savings - MT
975 (897.834)
0.041 0.033 -0.008 0.034 -0.006
has bank loan
(0.010) (0.015)
0.056 0.040 -0.015 0.046 -0.009
has family loan
(0.012) (0.019)
Note: Standard errors of the differences reported in parenthesis; standard errors are corrected by clustering at the location (enumeration area) level. * significant at
10%; ** significant at 5%; *** significant at 1%.
35
Table 3a: Adoption outcomes - administrative records on all transactions (per individual).
all transactions
dependent variable ------>
at least one transaction average value of transactions (>0) number of transactions (>0)
(1) (2) (3) (4) (5) (6) (7) (8) (9)
mean (treatment locations) 0.635 0.635 0.633 172.276 172.276 154.648 5.693 5.693 5.059
standard deviation (0.482) (0.482) (0.482) (795.276) (795.276) (640.328) (19.256) (19.256) (9.434)
treatment effect (targeted vs. coefficient 0.583*** 0.584*** 0.571*** 7.884 -20.488 3.322 -0.008 -0.608 -0.467
untargeted) standard error (0.048) (0.047) (0.048) (78.588) (74.663) (82.222) (2.218) (2.104) (2.363)
r-squared adjusted 0.223 0.222 0.227 -0.002 0.008 0.057 -0.002 0.006 0.127
number of observations 993 993 912 631 631 577 631 631 577
regional dummies no yes yes no yes yes no yes yes
controls no no yes no no yes no no yes
Note: All regressions are OLS. Average value of transactions and number of transactions are computed for individuals that actually performed transactions. Controls are individual
demographic and location characteristics, which include age, gender, years of education, marital status dummies, religion dummies, ethnic group dummies, property, and location
offering primary school, secondary school, health center, market vendors, police, church, meeting point, electricity supply, sewage, quality of mCel coverage, and time distance by
chapa (bus) to nearest bank. Standard errors reported in parenthesis; these are corrected by clustering at the location (enumeration area) level. * significant at 10%; ** significant at
5%; *** significant at 1%.
Table 3b: Adoption outcomes - administrative records on deposits (per individual).

deposits
(1) (2) (3) (4) (5) (6) (7) (8) (9)
treatment effect (targeted vs. coefficient 0.085** 0.087*** 0.065* 137.403** 71.113 64.944 0.782 0.310 0.456
Table 3c: Adoption outcomes - administrative records on transfers received (per individual).
transfers received
(1) (2) (3) (4) (5) (6) (7) (8) (9)
treatment effect (targeted vs. coefficient 0.115*** 0.116*** 0.118*** 24.493** 13.961 2.443 -0.590** -0.608** -0.973***
r-squared adjusted 0.017 0.018 0.052 -0.005 0.049 0.134 0.044 0.033 0.152
36
Table 3d: Adoption outcomes - administrative records on transfers sent (per individual).
transfers sent
(1) (2) (3) (4) (5) (6) (7) (8) (9)
standard deviation 0.141 0.141 0.143 92.015 92.015 52.247 0.308 0.308 0.315
treatment effect (targeted vs. coefficient 0.018** 0.018** 0.016* 62.316** 30.333*** 107.431*** 0.105 -0.000 -0.103
Table 3e: Adoption outcomes - administrative records on purchases in shop (per individual).
purchases in shop
(1) (2) (3) (4) (5) (6) (7) (8) (9)
treatment effect (targeted vs. coefficient 0.045*** 0.046*** 0.047** -21.041 -62.051 150.761 0.197 -0.103 0.602
offering primary school, complete primary school, secondary school, health center, police services, religious services, meeting point, electricity, sewage, mcel coverage, price and
time distance by chapa (bus) to nearest bank. Standard errors reported in parenthesis; these are corrected by clustering at the location (enumeration area) level. * significant at 10%; **
significant at 5%; *** significant at 1%.
Table 3f: Adoption outcomes - administrative records on airtime purchases (per individual).
airtime
(1) (2) (3) (4) (5) (6) (7) (8) (9)
treatment effect (targeted vs. coefficient 0.265*** 0.266*** 0.251*** 33.538 15.088 -0.319 1.583 0.612 -0.184
37
Table 3g: Adoption outcomes - administrative records on withdrawals (per individual).
withdrawals
(1) (2) (3) (4) (5) (6) (7) (8) (9)
standard deviation (0.251) (0.251) (0.252) (366.119) (366.119) (379.487) (0.903) (0.903) 0.938
treatment effect (targeted vs. coefficient 0.076*** 0.075*** 0.074*** -43.030 106.250 760.346*** 0.182 0.458 1.516**
38
Table 4: Adoption outcomes - behavioral measures.
withdraw
dependent variable ------> intend to use mKesh 50 MT sms mKesh - actual sms mKesh migrant - actual mKesh mandatory remittance
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
mean (treatment locations) 0.662 0.662 0.669 0.194 0.073 0.073 0.073 0.022 0.022 0.023 0.546 0.546 0.534
standard deviation (0.467) (0.467) (0.464) (0.395) (0.259) (0.259) (0.261) (0.147) (0.147) (0.150) (0.498) (0.498) (0.499)
treatment effect (targeted vs. coefficient 0.457*** 0.461*** 0.454*** 0.003 0.003 -0.002 -0.006 -0.006 -0.009 0.085 0.096 0.085
untargeted) standard error (0.047) (0.047) (0.049) (0.021) (0.021) (0.022) (0.013) (0.013) (0.013) (0.059) (0.058) (0.059)
r-squared adjusted 0.145 0.163 0.198 -0.001 -0.003 0.017 -0.001 -0.002 0.010 0.003 0.102 0.107
number of observations 993 993 912 993 993 912 993 993 912 678 678 626
regional dummies no yes yes no yes yes no yes yes no yes yes
controls no no yes no no yes no no yes no no yes
Note: All regressions are OLS. Controls are individual demographic and location characteristics, which include age, gender, years of education, marital status dummies, religion dummies, ethnic group dummies, property,
and location offering primary school, secondary school, health center, market vendors, police, church, meeting point, electricity supply, sewage, quality of mCel coverage, and time distance by chapa (bus) to nearest bank.
Standard errors reported in parenthesis; these are corrected by clustering at the location (enumeration area) level. * significant at 10%; ** significant at 5%; *** significant at 1%.
39
Table 5a: Financial literacy outcomes.
dependent variable ------> knowledge about savings knowledge about transfers knowledge about deposits knowledge about withdrawals
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
coefficient 0.257*** 0.242*** 0.261*** 0.301*** 0.287*** 0.336*** 0.274*** 0.262*** 0.278*** 0.262*** 0.250*** 0.270***
treatment effect
standard error (0.066) (0.054) (0.055) (0.069) (0.062) (0.051) (0.068) (0.063) (0.050) (0.065) (0.060) (0.049)
mean dep. variable (control) -0.118 -0.118 -0.096 -0.141 -0.141 -0.118 -0.118 -0.118 -0.091 -0.112 -0.112 -0.084
r-squared adjusted 0.016 0.055 0.124 0.022 0.041 0.155 0.018 0.033 0.157 0.016 0.031 0.161
number of observations 1,829 1,829 1,681 1,829 1,829 1,681 1,829 1,829 1,681 1,829 1,829 1,681
Note: All regressions are OLS. All dependent variables are z-scores. Controls are individual demographic and location characteristics, which include age, gender, years of education, marital status dummies,
religion dummies, ethnic group dummies, property, and location offering primary school, secondary school, health center, market vendors, police, church, meeting point, electricity supply, sewage, quality of
mCel coverage, and time distance by chapa (bus) to nearest bank. Standard errors reported in parenthesis; these are corrected by clustering at the location (enumeration area) level. * significant at 10%; **
Table 5b: mKesh literacy outcomes.

dependent variable ------> heard about mKesh what is mKesh who sponsors mKesh what can be done with mKesh
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
coefficient 0.783*** 0.779*** 0.763*** 0.824*** 0.817*** 0.838*** 0.959*** 0.952*** 0.962*** 1.042*** 1.037*** 1.045***
treatment effect
standard error (0.074) (0.074) (0.068) (0.065) (0.062) (0.064) (0.070) (0.069) (0.063) (0.076) (0.077) (0.073)
mean dep. variable (control) -0.330 -0.330 -0.319 -0.342 -0.342 -0.338 -0.398 -0.398 -0.392 -0.440 -0.440 -0.433
r-squared adjusted 0.150 0.155 0.248 0.162 0.172 0.221 0.223 0.230 0.304 0.263 0.266 0.317
40
Table 6a: General trust outcomes.
dependent variable ------> trust in family trust in neighbors trust in local shopkeeper trust in mCel
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
coefficient -0.026 -0.025 0.005 -0.131** -0.126** -0.084 0.212*** 0.215*** 0.265*** 0.102 0.095 0.082
treatment effect
standard error (0.067) (0.067) (0.060) (0.062) (0.060) (0.062) (0.064) (0.064) (0.057) (0.063) (0.061) (0.067)
mean dep. variable (control) 0.009 0.009 0.011 0.056 0.056 0.060 -0.092 -0.092 -0.085 -0.046 -0.046 -0.035
r-squared adjusted -0.000 -0.000 0.027 0.004 0.007 0.048 0.011 0.011 0.045 0.002 0.008 0.013
Table 6b: Trust in money transfer channels - unadjusted measures.

dependent variable ------> trust in transfer via bus driver trust in transfer via friend or family trust in transfer via bank trust in transfer via 'new mCel bank'
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
coefficient -0.008 -0.008 0.018 0.066 0.056 0.048 0.017 0.004 0.012 0.384*** 0.383*** 0.438***
treatment effect
standard error (0.062) (0.061) (0.059) (0.062) (0.057) (0.054) (0.070) (0.066) (0.070) (0.058) (0.058) (0.060)
mean dep. variable (control) -0.002 -0.002 0.014 -0.029 -0.029 -0.022 -0.007 -0.007 0.001 -0.174 -0.174 -0.194
r-squared adjusted -0.001 0.001 0.023 0.000 0.015 0.024 -0.001 0.016 0.043 0.036 0.035 0.045
Table 6c: Trust in money transfer channels - adjusted measures.

dependent variable ------> trust in transfer via bus driver trust in transfer via friend or family trust in transfer via bank trust in transfer via 'new mCel bank'
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
coefficient 0.000 -0.005 -0.002 0.051 0.041 0.042 0.004 -0.011 -0.020 0.267*** 0.264*** 0.299***
treatment effect
standard error (0.061) (0.057) (0.056) (0.058) (0.051) (0.052) (0.072) (0.067) (0.069) (0.052) (0.052) (0.057)
mean dep. variable (control) -0.014 -0.014 0.006 -0.026 -0.026 -0.030 0.000 0.000 0.008 -0.117 -0.117 -0.136
r-squared adjusted -0.001 0.007 0.019 0.000 0.016 0.022 -0.001 0.018 0.042 0.017 0.017 0.023
41
Table 7: Marginal willingness to save and remit.
dependent variable ------> saving game mKesh saving remittance game mKesh remittance
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
coefficient 0.020 0.021 0.043 0.229*** 0.229*** 0.249*** 0.057* 0.057* 0.067** 0.262*** 0.269*** 0.255***
treatment effect
standard error (0.039) (0.033) (0.037) (0.033) (0.032) (0.032) (0.032) (0.031) (0.029) (0.066) (0.056) (0.073)
mean dep. variable (control) 0.588 0.588 0.579 0.115 0.115 0.117 0.161 0.161 0.151 0.459 0.459 0.429
r-squared adjusted -0.000 0.037 0.040 0.076 0.085 0.118 0.004 0.014 0.036 0.067 0.155 0.100
number of observations 1,819 1,819 1,671 1,085 1,085 984 1,308 1,308 1,206 244 244 211
Note: All regressions are OLS. Controls are individual demographic and location characteristics, which include age, gender, years of education, marital status dummies, religion dummies, ethnic group
dummies, property, and location offering primary school, secondary school, health center, market vendors, police, church, meeting point, electricity supply, sewage, quality of mCel coverage, and time distance
by chapa (bus) to nearest bank. Standard errors reported in parenthesis; these are corrected by clustering at the location (enumeration area) level. * significant at 10%; ** significant at 5%; *** significant at
1%.
42
Table 8a: Information and trust outcomes - spillover effects.
dependent variable ------> knowledge about savings knowledge about transfers heard about mKesh trust in local shopkeeper trust in transfer via 'new mCel bank'
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15)
coefficient 0.167* 0.154* 0.170* 0.231** 0.223** 0.342*** 0.180* 0.181* 0.205** 0.076 0.078 0.158* 0.045 0.047 0.119
treatment effect
standard error (0.100) (0.092) (0.103) (0.103) (0.099) (0.104) (0.107) (0.104) (0.103) (0.090) (0.088) (0.087) (0.091) (0.092) (0.100)
mean dep. variable (control) -0.118 -0.118 -0.096 -0.141 -0.141 -0.118 -0.330 -0.330 -0.319 -0.092 -0.092 -0.085 -0.117 -0.117 -0.136
r-squared adjusted 0.003 0.052 0.120 0.006 0.025 0.154 0.004 0.008 0.172 -0.000 0.002 0.030 -0.001 -0.002 0.005
number of observations 1,211 1,211 1,102 1,211 1,211 1,102 1,190 1,190 1,084 1,183 1,183 1,076 1,022 1,022 926
regional dummies no yes yes no yes yes no yes yes no yes yes no yes yes
controls no no yes no no yes no no yes no no yes no no yes
Note: All regressions are OLS. All dependent variables are z-scores. Trust in transfer via 'new mCel bank' is adjusted by anchoring vignettes. Controls are individual demographic and location characteristics, which include age, gender, years of
education, marital status dummies, religion dummies, ethnic group dummies, property, and location offering primary school, secondary school, health center, market vendors, police, church, meeting point, electricity supply, sewage, quality of mCel
coverage, and time distance by chapa (bus) to nearest bank. Standard errors reported in parenthesis; these are corrected by clustering at the location (enumeration area) level. * significant at 10%; ** significant at 5%; *** significant at 1%.
Table 8b: Marginal willingness to save and remit - spillover effects.

dependent variable ------> saving game mKesh saving remittance game mKesh remittance
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
coefficient 0.034 0.030 0.046 0.155** 0.151** 0.188*** 0.089* 0.088* 0.115** 0.238** 0.256*** 0.311***
treatment effect
standard error (0.054) (0.050) (0.052) (0.062) (0.061) (0.064) (0.048) (0.048) (0.049) (0.107) (0.093) (0.116)
mean dep. variable (control) 0.588 0.588 0.579 0.115 0.115 0.117 0.161 0.161 0.151 0.459 0.459 0.429
r-squared adjusted -0.000 0.039 0.050 0.025 0.036 0.065 0.006 0.011 0.049 0.032 0.152 0.099
number of observations 1,207 1,207 1,098 715 715 640 889 889 813 155 155 134
Note: All regressions are OLS. Controls are individual demographic and location characteristics, which include age, gender, years of education, marital status dummies, religion dummies, ethnic group
dummies, property, and location offering primary school, secondary school, health center, market vendors, police, church, meeting point, electricity supply, sewage, quality of mCel coverage, and time distance
by chapa (bus) to nearest bank. Standard errors reported in parenthesis; these are corrected by clustering at the location (enumeration area) level. * significant at 10%; ** significant at 5%; *** significant at
1%.
43

Introducing Mobile Money in Rural Mozambique

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Introducing Mobile Money in Rural Mozambique:

Evidence from a Field Experiment*

Cátia Batista† and Pedro C. Vicente‡

October 2012 - preliminary

JEL Classifications: O12, O33, G20, R23.

<Figure 1 near here>

3.2. Sampling and randomization

<Figure 2 near here>

During the post-treatment measurement activities we also proposed respondents in treatment

<Figure 3 near here>

<Figure 4 near here>

<Table 1 near here>

<Figure 5 near here>

<Tables 2 near here>

<Tables 3 near here>

<Table 4 near here>

<Tables 5 near here>

<Table 7 near here>

We show treatment effects both on willingness to save/remit and willingness to save/remit

<Tables 8 near here>

Paying for expenses at the mKesh shop.

Other operations and pricing:

Savings envelope (with sealing wax).

Table 3b: Adoption outcomes - administrative records on deposits (per individual).

Table 5b: mKesh literacy outcomes.

Table 6b: Trust in money transfer channels - unadjusted measures.

Table 6c: Trust in money transfer channels - adjusted measures.

Table 8b: Marginal willingness to save and remit - spillover effects.

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