Fact of the Week: Adoption of Mobile Money in Kenya Lifted 194,000 Households Out of Extreme Poverty

The adoption of mobile money in Kenya lifted 194,000 households out of extreme poverty and allowed 185,000 women to move into business and retail.

Source: Tavneet Suri and William Jack, “The long-run poverty and gender impacts of mobile money,” Science, December 2016.

Commentary: Over the last decade, mobile money services have brought banking to populations that have lacked formal financial services by allowing users to manage money on their mobile phones. First launched in Kenya in 2007, 96 percent of Kenyan households now use mobile money and can withdraw funds in physical currency from 110,000 agents across the country.

Households that saw increased access to nearby mobile money agents between 2008 and 2010 saw significant consumption increases from the start of that period through 2014 compared to those that didn’t. This effect was more than twice as large for female-headed households, which consumed 18.5 percent more per capita with increased access to agents and saw a 22 percent reduction in the rate of extreme poverty. These results indicate that the adoption of mobile money caused 194,000 households, representing 2 percent of Kenya’s population, to escape extreme poverty, largely due to their reduced reliance on subsistence agriculture.