Impact evaluation in mobile finance Implications for the Next Wave of Financial Inclusion Models

Jake Kendall Senior Program Officer, Research and Innovation Financial Services for the Poor

© 2010 Bill & Melinda Gates Foundation |

Measurement along causal chain Impact

Uptake & Usage

Implementation

Monitoring and Reporting

Reporting and Measurement

Impact evaluations

Cau

salit

y

Intensity

© 2012 Bill & Melinda Gates Foundation

New technologies – new models – new limits

Digital models are fundamentally different in a number of ways:

1.  Free (to someone) transactions allows smaller size, higher frequency, over greater distance

2.  Inherently data rich– allows geo-spatial mapping, transactional mining, social network analysis

3.  Real-time communications interface – allows self-service account information, reminders

4.  Real-time control interface – even self-activation

What should we build with this? What is the vision for what we want to achieve for clients?

© 2012 Bill & Melinda Gates Foundation

Airtime transfers during an earthquake

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© 2012 Bill & Melinda Gates Foundation

Few assessments of mobile finance impacts

§  G2P in Niger – Aker et al

§  Airtime transfers in Rwanda –

Blumenstock

§  RCT in Mozambique

§  Natural experiment in Kenya –

Jack and Suri

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Access to M-PESA generates significant welfare effects through enabling informal financial relationships

Source: 1) Suri and Jack (2011) Risk sharing and transaction costs, Working Paper 2) Using regression techniques, the researchers perform several tests to rule out

alternative explanations (like higher income) which are correlated with M-PESA usage

M-PESA facilitates increased risk-sharing among networks of friends and family. Following a major shock, M-PESA users are more likely than non-users to: ▪ Receive a remittance; ▪ Receive a larger amount of

transfers;

▪ Receive funds from a larger network of senders; and

▪ Receive funds from senders who are located further away

Evidence from a 2,100 household panel survey in Kenya:1

▪ M-PESA users are able to fully absorb large negative income shocks (such as severe illness, job loss, livestock death, harvest or business failure) without any reduction in household consumption. In contrast, household consumption falls on average 6-10 percent in response to a major shock when households don’t have an M-PESA user2

WHY?

© 2012 Bill & Melinda Gates Foundation

In the pipeline

§ Chamgampka – mobile health savings

§ SME supply chain credit in Kenya

§ Angaza mobile activated solar energy

§ Dahabshiil sharia-compliant micro-saving,

credit and payment system in Somalia

§ Two in Afghanistan – savings and salary

payments

§ Telenor?? 7

© 2012 Bill & Melinda Gates Foundation

Impact evaluations of mobile are inherently difficult for a few reasons § Inherent challenge of evaluating a network

technology: • Scale modifies impact – “network affect” • Sub-scale often implies sub-par (e.g. agent network)

§ Large scale commercial operators un-cooperative

§ Mobile vs. Chanel vs. Product § Many uses and use cases means hard to know

where to look

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