The Real Effects of Mobile Money: Evidence from a Large-Scale Fintech Expansion
IMF Working Papers, July 24, 2020
Source details
- Canonical URL
- The Real Effects of Mobile Money: Evidence from a Large-Scale Fintech Expansion
Other formats
Bibliographic details
- Authors: Manasa Patnam, Weijia Yao
- Published: July 24, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513550244.001
Summary and scope
- Research question: How mobile money use can impact economic outcomes in India.
- Data and setting:
- Granular transaction data from Paytm, described as "one of the largest mobile money service provider in India with over 400 million users."
- Exploits the period around the demonetization policy, which prompted a surge in mobile money adoption.
- Focus on how mobile money affects traditional risk-sharing arrangements.
Methodology and empirical strategy
- Identification:
- Leverages the surge in adoption around demonetization as a source of variation in mobile money use.
- Uses rainfall shocks to measure resilience to shocks and their impact on economic outcomes.
- Outcome measures:
- Nightlights-based economic activity.
- Household consumption.
- Firm sales and firms’ subjective expectations on future sales.
- Complementary evidence:
- A firm survey conducted around a phased targeting intervention that incentivized firms to adopt the mobile payment technology.
Main findings
- Resilience to shocks:
- Mobile money use increases resilience by dampening the impact of rainfall shocks on nightlights-based economic activity.
- Mobile money use dampens the impact of rainfall shocks on household consumption.
- Firm-level outcomes:
- Firms adopting mobile payments improved their sales after six-months of use, compared to other firms.
- Mobile payment adoption is associated with lower subjective uncertainty and greater sales optimism among firms.
Policy-relevant implications
- Financial inclusion and resilience:
- Mobile money can strengthen traditional risk-sharing arrangements and buffer households and local economic activity against weather-related shocks.
- Firm productivity and expectations:
- Incentivizing adoption of mobile payments can translate into improved firm sales within a six-month horizon and reduced subjective sales uncertainty.
Publication metadata (from the source)
- Authors: Manasa Patnam, Weijia Yao
- Date: July 24, 2020
- Series: Working Paper No. 2020/138
- Pages: 36
- DOI: https://doi.org/10.5089/9781513550244.001
- ISBN: 9781513550244
- ISSN: 1018-5941
The Real Effects of Mobile Money: Evidence from a Large-Scale Fintech Expansion, IMF Working Paper No. 2020/138.
Content in this bundle
- Working Paper