01 January 2013

Can Mobile Money be used to Promote Savings? Evidence from North Ghana

Mobile money and the promotion of financial inclusion and savings in remote sub-Saharan Africa.

In the remote areas of sub-Saharan Africa, less than 20 percent of the population has access to any type of formal financial institution. Yet access to financial services is a key aspect of development, as credit and savings allow households to invest, save and respond to shocks. Households in such contexts typically share risk by savings or by using migration to urban areas as a means of diversifying household income. While these strategies are important, they are also subject to risks, including theft, restricted access or high transaction costs.

Since 2005, a new technology has become available called mobile money (m-money) which allows clients to use text messages to store value in an account accessible by the handset, convert to cash, and transfer value between users.

This research, “Can Mobile Money be Used to Promote Savings? Evidence from Preliminary Research in Northern Ghanaseeks to understand whether and how m-money can promote financial inclusion of the world’s poor, particularly those living in rural areas.

by Jenny Aker, Kim Wilson

  • The Fletcher School; Tufts University