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Resisting Social Pressure in the Household Using Mobile Money: Experimental Evidence on Microenterprise Investment in Uganda

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Abstract
Intra-household sharing pressure has been shown to be a key constraint on female enterprise growth in developing countries. However, the growth of digital financial services offers a new way to reduce this sharing pressure. In this paper, I examine whether changing the form that a microfinance loan is disbursed in, from cash to directly onto a digital account, enables female microfinance borrowers to grow their businesses. Using a field experiment of 3,000 female borrowers in Uganda, I compare the disbursement of a loan as cash to the disbursement of a loan onto a mobile money account. After 8 months, women who received their microfinance loan on the mobile money account had 11% higher levels of business capital and 15% higher business profits compared to a control group who received their loan as cash. Total household income and consumption were also higher. Impacts were greatest for women who experienced pressure to share money with others in the household at baseline, suggesting that providing the loan in a digital account reduces sharing of the loan with others, to the benefit of both the woman's business and household. This indicates that widespread mobile money services can be utilised to counteract the negative impact of sharing pressure on the performance of female-owned enterprises.

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  • Emma Riley, 2022. "Resisting Social Pressure in the Household Using Mobile Money: Experimental Evidence on Microenterprise Investment in Uganda," CSAE Working Paper Series 2022-04, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2022-04
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    Cited by:

    1. Augsburg, Britta & Malde, Bansi & Olorenshaw, Harriet & Wahhaj, Zaki, 2023. "To invest or not to invest in sanitation: The role of intra-household gender differences in perceptions and bargaining power," Journal of Development Economics, Elsevier, vol. 162(C).
    2. Jean N. Lee & Jonathan Morduch & Saravana Ravindran & Abu S. Shonchoy, 2023. "The Social Meaning of Mobile Money: Willingness to Pay with Mobile Money in Bangladesh," Working Papers 2304, Florida International University, Department of Economics.
    3. Seema Jayachandran, 2021. "Social Norms as a Barrier to Women’s Employment in Developing Countries," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 69(3), pages 576-595, September.
    4. Eliana Carranza & Aletheia Donald & Florian Grosset & Supreet Kaur, 2022. "The Social Tax: Redistributive Pressure and Labor Supply," NBER Working Papers 30438, National Bureau of Economic Research, Inc.
    5. Carlotta Nani, 2024. "Perceived abilities and gender stereotypes within the household: experimental evidence from Bangladesh," IHEID Working Papers 19-2024, Economics Section, The Graduate Institute of International Studies.
    6. Lee, Jean N. & Morduch, Jonathan & Ravindran, Saravana & Shonchoy, Abu S., 2024. "The social meaning of mobile money: Earmarking reduces the willingness to spend in migrant households," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 675-688.
    7. Michael Callen & Miguel Fajardo-Steinhäuser & Michael G. Findley & Tarek Ghani & Michael J. Callen, 2024. "Can Digital Aid Deliver during Humanitarian Crises?," CESifo Working Paper Series 11220, CESifo.

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    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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