Digital financial technology holds the potential to catalyze women’s economic empowerment. Specifically, smartphone distribution can prompt women’s financial inclusion, which can spark change in gender norms and ultimately lead to women’s economic empowerment. But first, women must gain—and retain—access to this technology. In contexts where norms regarding property ownership vary by gender, this is no easy task. In Malawi, for example, women are less likely to control household assets than men. As a result, women are excluded from many benefits afforded by the asset and suffer diminished bargaining power within the household.
What works to keep digital technology in women’s hands? Moreover, how do the gains from such access compare to those generated by simply providing women with unconditional cash transfers?
One WEE-DiFine-supported study is well-placed to address these questions. Researchers are conducting a randomized controlled trial (RCT) in Malawi to test the impact of smartphone distribution to women, coupled with targeted training, on women’s digital financial services use. In a prior blog post, researchers shared their preliminary results from midline data collection, which was collected nine months after the start of the intervention. It highlighted the importance of mobile technology and appropriate training for increasing women’s uptake and use of digital financial services vis-à-vis lump-sum transfers. Further analysis reinforces this trend and illustrates the benefits of increasing smartphone ownership combined with training.
On measures of household consumption at midline, however, smartphones and unconditional cash transfers exhibited similar positive effects compared to control, but via different pathways. Smartphone recipients invested more in the digital technology and realized financial inclusion, while cash grant recipients used the funds as business capital, rather than to buy mobile handsets. Whether both produce similar gains over the long term will be the subject of future analysis after another round of data collection at the two-year mark of the study.
Midline Data Collection
Researchers recruited and surveyed a sample of 1,500 married women in Blantyre, Malawi, who did not personally own a mobile phone at the time of recruitment. Subsequently, participants were randomly assigned to one of four treatment groups: control; cash placebo; individual smartphone treatment; and couples smartphone treatment (see graphic for treatment details). Smartphone distribution to women and trainings were conducted in June 2021. The cash placebo, designed to benchmark the effects of a phone to the cash equivalent value of the phone, was also distributed at this time.
Nine months later, the research team conducted midline data collection, including a behavioral measure of mobile money use. Ultimately 1407 out of 1500 baseline participants were surveyed at midline, for a completion rate of about 94%. For the behavioral measure, researchers offered participants a micro-grant to be paid on the spot—either 1500 Malawi Kwacha (~US $1.87) in cash or 3000 Malawi Kwacha (~US $3.75) as a mobile money transfer. The research team then recorded which mode participants chose and, if they chose mobile money, whose account the money was transferred to. Researchers also posed a hypothetical money game to couples, in which respondents would be provided with a lump sum that they could transfer fully to their spouse (USD $3.00) or keep for themselves, minus a penalty (USD $2.00).
Findings and implications
Analysis of midline data is intriguing. As expected, smartphone distribution, in conjunction with training, increased women’s phone ownership and mobile money use. However, participants in the cash group were much less likely to invest in mobile technology. Whereas some 53% of cash participants reported using the grant to invest in business capital, only 7% reported using it to buy a mobile phone. Other more common uses of the cash grant were food (50%), home improvements (31%), and school for self or children (18%). This suggests the different treatment conditions led participants to pursue divergent economic pathways—a mobile technology pathway versus a business capital pathway. Whereas the former increased participants’ realized financial inclusion[1], both pathways generated positive impacts on economic well-being, as measured by household consumption. However, within the mobile technology pathway, these effects were stronger among women assigned to the couples training rather than the individual training. These trends require deeper exploration at endline.
Women kept the smartphones they received, but phone ownership did not necessarily increase with income. At midline, women assigned to the smartphone treatment groups were significantly more likely to own a phone, especially the type distributed during the intervention, relative to women assigned to the control group.[2] Moreover, women in the smartphone treatment groups were about 40 percentage points more likely to have their phone in hand at the time of the midline survey relative to women in the control group. These results indicate that women tended to keep their smartphones after nine months, as opposed to selling them, giving them away, or having them co-opted by another. Interestingly, despite receipt of a large cash transfer, women in the cash group were not likely to purchase a phone with these funds: these women were only 10 percentage points more likely than women in the control group to own a phone at the time of data collection. Why women in the cash group did not invest in mobile technology, despite having the resources to do so, will be further investigated during endline data collection.
Smartphone ownership increased women’s mobile money use, but cash transfers did not. The importance of mobile technology access as a gateway to digital financial services is illuminated by differences in mobile money uptake between the cash and smartphone treatment conditions. Women in the smartphone treatment groups scored significantly higher on a mobile money use index[3] than their counterparts who did not receive phones. Additionally, as measured by a behavioral measure of mobile money use, women in the smartphone treatment groups were 14 percentage points more likely than women in the cash and control groups to request the grant via mobile money. However, opting for mobile money does not guarantee that a woman will be the direct recipient of the funds.
Smartphone ownership also increased women’s realized financial inclusion, but cash transfers did not. Of the women who opted for mobile money (irrespective of treatment assignment), less than a third directed the grant to their own accounts. This suggests that the remaining women relied on someone else’s financial inclusion to access the funds. When researchers constrained their analysis to only those women who opted for mobile money and had the funds sent to their own digital wallets, a common measure of realized financial inclusion, they observed striking impacts. Women in the smartphone treatment groups were three times more likely to opt for these conditions than women in the cash and control groups. These results point to the importance of both access to mobile technology and appropriate training for individual uptake and use of digital financial services relative to lump-sum transfers.
Both smartphones and cash transfers increased household consumption relative to control. Despite these observed differences in realized financial inclusion, both the cash transfers and the smartphones increased the log of monthly household consumption (as measured across a set of 14 types of expenditures, including food, household maintenance, transportation, fuel, etc.). This suggests the potential impacts of cash recipients using part of their grants to improve their micro- and small businesses.
Smartphones and cash exhibited changes in different types of household consumption. While households in the cash group invested more across a broad variety of categories, households in the smartphone treatment groups spent more on a narrower range of categories, especially mobile-related expenses. This trend underscores the value smartphone recipients seem to place in the technology. Smartphone recipients also spent more on categories unrelated to phone use, namely community events, healthcare, and transportation. Researchers observed similar effects in an RCT in Tanzania, suggesting that mobile phone ownership generates comparable shifts in household spending across different contexts.
Cooperative use of smartphones by spouses may be key to unlocking benefits. The effects of smartphones on household consumption are stronger in the couples group than in the individual treatment group, pointing to the potential benefits of couples training around the smartphone. Moreover, women in the couples group were more likely to report that their husbands helped them use the phone. These women also reported higher levels of trust in their husbands relative to the individual treatment group. Together, these results indicate some impact of the couples’ intervention—despite it being a one-off training.
Next steps
The researchers will present their findings at BRAC Institute of Governance and Development’s international convening in June 2023, Making Digital Finance Work for Women, as well as at the annual meeting of the American Political Science Association in September 2023. The research team plans to conduct endline data collection in mid-2023, two years after the distribution of the smartphones and cash grants. This round of data collection will capture whether the aforementioned trends deepen or evolve over time. Additionally, endline data collection will measure impacts on women’s economic empowerment and individual, household, and community norms around respect for women’s property rights over smartphones. By examining both material and normative effects of smartphone technology and training, benchmarked against a cash equivalent, this study is well poised to speak to how smartphone distribution programs can move the needle on women’s economic empowerment.
Reference
[1] Realized financial inclusion commonly refers to whether or not a woman has access to her own transaction account that she uses to send and receive payments and store money.
[2] During midline data collection, the research team verified that 68% of smartphone recipients had the Itel A16+ on their person, whereas only 2% and 3% of individuals in the control and cash groups, respectively, owned smartphones.
[3] Survey questions cover whether the participant has a MM account; personal use of mobile money to save; mobile money preferred financial instrument; strength of preference for mobile money; frequency of mobile money use; count of mobile money services used; mobile loans taken out over past year; times sent mobile money in the past month; and times received mobile money in the past month.
Results generated by Dr. Philip Roessler and Dr. Tanu Kumar and summarized by Kym Cole
For questions about these results, please contact Dr. Roessler at proessler@wm.edu
