Evaluation of the impact of mobile banking and financial literacy on microenterprise development in Mozambique

• Mobile banking provides a means for saving and managing money, contributing to broader economic growth and financial inclusion.
• Projects developed from ongoing collaboration between IGC Mozambique and the Central Bank facilitated discussion amongst the main financial institutions operating in the country.
• Researchers found that the mobile money agent network is of crucial importance for the adoption of mobile money services in rural Mozambique.
• This supports the implementation of the Financial Inclusion Strategy, which is the cornerstone of the Bank’s Strategic Plan for 2016-2022.

Mobile phones have transformed financial inclusion and banking in Africa. The recent introduction of mobile banking services in rural areas of Mozambique allowed this research team to undertake a randomised impact evaluation of the introduction of this technology. The study results from the ongoing collaboration between the IGC and the Central Bank of Mozambique, creating a unique opportunity for a constructive discussion between the main financial institutions operating in the country.

This particular project investigated the role of mobile money in increasing the savings capacity of micro-entrepreneurs, and the importance of financial literacy in ensuring the optimal management of these savings towards enterprise development. The research team adopted a randomized controlled trial to measure causal changes in savings rates and investment levels and firm productivity among beneficiaries of interventions that provides either access to mobile banking technology or business management training, or both.

This impact evaluation study has been of particular interest to the Central Bank of Mozambique since they act as the mobile banking services regulator. The project provided the Central Bank with convincing evidence on the potential benefits of mobile banking technology, as well as on adoption and usage patterns of mobile banking services using alternative dissemination strategies. These results highlight the importance of drafting supportive regulation that enables the provision of quality mobile banking services within Mozambique. The findings of the project inform the implementation of the Financial Inclusion Strategy, which is the cornerstone of the Bank’s Strategic Plan up to 2022.

The results were presented at a workshop in July 2015, co-organised with the Central Bank. Participants from both the Central Bank and the private sector showed deep interest in the results. The IGC received several requests from the main commercial banks attending the workshop and the Central Bank to organise another workshop to discuss the final results. The end-line data collection was completed in January 2016, and preliminary results have been presented on March 24th 2016 during a workshop titled: “Private sector development in Mozambique: Focus on Managers and Workers”. The IGC’s projects and guidance fed directly and indirectly into the Bank’s Strategy for financial inclusion, as the Letter of Appreciation from the Governor of the Bank confirms. Finally, the projects stimulated the interest of the Central Bank in pursuing further research projects with the IGC.