Emma Riley (U. Washington). “Resisting sharing pressure in the household using mobile money: Experimental evidence on microenterprise investment in Uganda”

Abstract: Sharing norms have been shown to be a key constraint on female enterprise growth in developing countries. However, these sharing norms generally relate to money held as cash, and so the shift to digital payments offers the opportunity to circumvent them. 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 disbursement of a loan as cash to 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 suggests that widespread mobile money services can be utilised to improve the performance of female-owned enterprises.

Emma Riley’s personal website can be found here.

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