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While the impact of cash transfers on women’s economic empowerment (WEE) is relatively well-established, transfers distributed via mobile money could theoretically generate a greater impact on WEE compared to cash.[1] Several mechanisms exist through which mobile money could benefit economic outcomes for women⁠—especially women in Sub-Saharan Africa. These mechanisms include improving their outside options, relaxing mobility constraints, promoting their agency, and providing privacy and security.

However, noticeable gaps exist in studies testing the impact of mobile money services on WEE, as well as the mechanisms through which mobile money services impact WEE.[2]^,[3] In this study, we compare the differential impact of targeting mobile money relative to cash for women and explore the role of privacy as a causal mechanism through which DFS impacts WEE.

Gender and mobile money in Sub-Saharan Africa

The use of mobile money as a form of digital finance has increased widely in Sub-Saharan Africa (SSA) over the past decade.[4] In 2021, 33% of adults in SSA had a mobile money account (Figure 1), compared to a global average of 10%. The gender gap in accessing mobile money services was also reduced by 3 percentage points globally. In Sub-Saharan Africa, the gender gap ranged from insignificant in Uganda to 27 percentage points in Côte d’Ivoire.[5]

The rapid expansion of mobile money services in SSA has been shown to offer women more benefits than cash. For example, a study in Niger demonstrated that access to and use of mobile money contributed to an increase in women’s bargaining power relative to cash.[6] Other research studies have demonstrated that compared to cash, mobile access and the use of mobile money can improve household outcomes, benefit female entrepreneurs, increase resilience to shocks, and contribute to poverty alleviation.[7]^{,[8],[9],[10]}

Money transfers and privacy

While there is no clear evidence on who within a household should be given monetary transfers to achieve maximum impacts for women’s empowerment, women are frequently the target recipients of cash transfer programs. Currently, most cash transfer programs in SSA are rolled out at the community level with the help of village elders who mobilize beneficiaries and register them for the program. The enrollment and disbursement of cash happens publicly and is widely discussed within the community. Thus, the nature of program delivery makes information about cash transfers openly available to other households and community members.

Publicly observable income can limit positive impacts on WEE outcomes relative to when women can keep this information private. When information about a woman’s income is widely accessible, she can be pressured to share money with her family or others. In cases where money is transferred directly but publicly to women, the potential positive effects of the monetary transfer on WEE are limited. Research has shown that women, in an experimental setting, make investment choices that lead to lower income if it allows them to keep the value of their investments private.[11]

Further, social pressures for women to share their observable income with others, such as extended family members and neighbors, have been shown to affect women’s enterprise investments. In circumstances where women were not subject to these pressures–either because they could hide their money, they were offered a private account, or they owned the only household business–women were able to use grants and loans to expand their businesses.[12]^,[13] Moreover, women could increase the size and profitability of their businesses when grants were given in kind rather than in cash.[14] Despite these findings, the role of privacy of information in promoting WEE has not yet been causally tested.

WEE, mobile money transfers, and privacy

To formally evaluate the role of privacy as a mechanism in both cash and digital transfers and to understand implications for women’s empowerment in Uganda, we are conducting a clustered randomized controlled trial (cRCT). Our intervention introduces privacy of information, especially within the household, for women receiving money transfers.

We evaluate privacy as an outcome to test the extent to which women keep information about their income private or share it with others. Further, we employ a diverse set of indicators to measure the differential effect of privacy of information on WEE outcomes, including household decision-making, perceived control over resources, preferences on individual decision-making, and enactment of their economic life goals.

The study includes four treatment groups and a control group. Women in two treatment groups received cash transfers, while women in the other two treatment groups received mobile money transfers. For women in one of the cash transfer groups and one of the mobile money groups, information about the transfer was made known to the targeted woman and her spouse, as is the current practice under many cash transfer programs. For women in the other two treatment groups, the target woman was given the transfer in private. Women in the mobile money treatment group received the transfer directly into their personal mobile money accounts.

At baseline, we surveyed 2,000 women in rural Uganda. We found that women value privacy of information about money transfers. Women feared that if their husbands knew about their income, they would take their money away or prevent them from using it as they would like.

In addition, we confirmed that women tend to hide their money. At baseline 55% of women reported privately storing a portion of their money, which enables them to have greater control over its use, invest in their children, and start their own businesses. When asked about their preferred method of storing money, half of the women preferred to store money in their mobile money accounts. Some women indicated that storing money in digital accounts offered privacy benefits compared to cash and allowed them to transact more easily. Other women offered the following explanations for why they prefer mobile money: “No one can access my account unless he or she knows the pin number,” and “My savings are personal and mobile money enables me to save without anyone knowing.”

The demand for privacy of information was also present for women who stored their personal money in cash. One woman explained, “In instances [where] the partner knows the pin, cash within the household can be better because it involves one person to keep the money privately.”

Findings from this study will enable discussions on the extent to which the mode of delivery and information about money transfers enable women’s empowerment and speak to the mechanisms through which mobile money transfers affect WEE.

References

[1] Garz, S., Heath, R., Kipchumba E., & Sulaiman, M. (2020). Evidence of digital financial services impacting women’s economic empowerment: What explains the impacts and what is left to learn?

[2] Ibid.

[3] Gammage, S., Kes, A., Winograd, L., Sultana, N., Hiller, S., & Bourgault, S. (2017). Gender and digital financial inclusion: What do we know and what do we need to know? International Center for Research on Women (ICRW).

[4] Demirgüç-Kunt, A., Klapper, L., Singer, D. & Ansar, S. (2022). The global findex database 2021: Financial inclusion, digital payments, and resilience in the Age of COVID-19. Washington, DC: World Bank.

[5] Ibid.

[6] Aker, J. C., Boumnijel, R., McClelland, A., & Tierney, N. (2016). Payment mechanisms and antipoverty programs: Evidence from a mobile money cash transfer experiment in Niger. Economic Development and Cultural Change, 65(1), 1–37.

[7] Suri, T., & Jack, W. (2016). The long-run poverty and gender impacts of mobile money. Science, 354(6317), 1288-1292.

[8] Riley, E. (2020). Resisting social pressure in the household using mobile money: Experimental evidence on microenterprise investment in Uganda.

[9] Jack, W., & Suri, T. (2014). Risk sharing and transactions costs: Evidence from Kenya‘s mobile money revolution. American Economic Review, 104(1), 183-223.

[10] Suri, T., & Jack, W. (2016).

[11] Jakiela, P., & Ozier, O. (2016). Does Africa need a rotten kin theorem? Experimental evidence from village economies. The Review of Economic Studies, 83(1), 231–268.

[12] Riley, E (2020).

The long-run poverty and gender impacts of mobile money. Science, 354(6317), 1288-1292.

[13] Bernhardt, A., Field, E., Pande, R., & Rigol, N. (2019). Household matters: Revisiting the returns to capital among female microentrepreneurs. American Economic Review: Insights, 1(2), 141-60.

[14] Fafchamps, M., McKenzie, D., Quinn, S., & Woodruff, C. (2014). Microenterprise growth and the flypaper effect: Evidence from a randomized experiment in Ghana. Journal of Development Economics, 106, 211–226.

Authors: Giulia Greco, London School of Hygiene and Tropical Medicine, Selim Gulesci, Trinity College Dublin, Munshi Sulaiman, BRAC Institute of Governance and Development and Pallavi Prabhakar, BRAC Institute of Governance and Development