Digital Financial Services and Women’s Empowerment: Experimental Evidence from Tanzania

Digital financial services have the potential to empower women by enhancing their control over their finances, thereby enabling them to better assert their preferences within the household. However, despite the popularity of digital financial services like mobile money, gender gaps persist in their adoption: women are less likely to use mobile money, use it less often, and make fewer types of transactions, of smaller value. Can increasing women’s use of mobile money services improve their empowerment? We answer this question using a randomized control trial (RCT) in Tanzania.

An Experiment in Tanzania

The study, conducted with 152 female microfinance groups in Tanzania, sought to understand the effects of a seemingly simple change – switching the repayment method for microfinance loans from traditional cash transactions to mobile money.

In treatment groups, all members of the group were encouraged to make their loan repayments using mobile money, rather than the usual method of cash. Loan repayments are made weekly and are $20 on average per week. Switching the repayments to mobile money therefore constituted a large increase in women’s use of mobile money, which at baseline only 50% of women used once a week, with average weekly transactions valued at $14. The encouragement treatment was successful – 61% of the treatment group made at least one loan repayment with mobile money, and, on average, women made 7.5 out of 23 total loan repayments with mobile money. The control group continued to make loan repayments in cash.

We examine impacts of switching loan repayments to mobile money after 9 months using an in-person survey conducted with 750 randomly chosen women from treatment and control groups.

We find that the encouragement to make loan repayments using mobile money resulted in women using mobile money services considerably more: women in treated groups are more likely to accept payments from customers with mobile money, use mobile money more frequently, perform transactions of 50% higher value each month, are more likely to have taken a loan through mobile money, are 30% more likely to save with mobile money, and have twice the value of savings in their mobile money accounts. ¹

Increased Financial Control and Empowerment

Did the increased use of mobile money translate into effects on women’s empowerment? We find that it did: the shift translated into heightened financial control for women, leading to increased levels of empowerment within their households. Treated women scored 0.23 standard deviations higher on an index of financial control (significant at the 1% level), and 0.11 standard deviations higher on an index of decision making within the household (significant at the 10% level). Notably, the effects were most pronounced among women who were initially least empowered, underlining the potential for digital financial services to empower the most vulnerable women.

Savings and Loan Repayment

We see that treated women exhibited a positive change in savings behavior, increasing their savings significantly overall, driven by an increase in savings on their mobile money accounts of 15 USD PPP (significant at the 5% level). This suggests that if anything the treatment crowded in savings in different forms, possibly due to the increase in financial control that women experienced. While no significant changes were observed in business or household outcomes, a positive impact on loan repayment behavior was evident, with treated women being less likely to be behind on a loan repayment. Treated women qualified for larger subsequent loans, possibly due to their improved repayment behaviour.

Social Cohesion and Group Dynamics

An unexpected yet positive consequence of the shift to mobile money was the increased interaction among members of the microfinance groups. With time freed up when payments were made using mobile money, treated women found more time for social interaction during group meetings. Treated women were more likely to discuss their businesses with other members of their group and to consider women within their group close friends.


Our study shows that digital tools can be a powerful method to increase women’s control over their finances and hence increase their ability to enact their preferences within the household, raising their empowerment. Utilising such tools for loan repayment had positive impacts on women alongside small improvements in loan repayment behaviour. Given the prevalence of services such as mobile money, integrating them into other types of financial services, such as microfinance loans or savings groups, would have positive impacts on women.

¹All of these findings are significant at the 10% level or less.