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Here’s Why You Should Rely More on Mobile Money

Here’s Why You Should Rely More on Mobile Money

You won’t believe but mobile money services can lift people out of poverty in developing economies like ours. No it’s not a joke as such services have already helped Kenyans save more money and withstand financial crisis, among other benefits.

According to a study published in the journal Science, mobile-money services had noteworthy long-term effects on poverty reduction in Kenya, especially among female-headed households.

In fact, mobile money services , that allow users to store and exchange monetary values via mobile phone, have inspired a surprising occupation shift among Kenyan women.

These services can benefit Indians too in the wake of demonetization, the abolition of old notes of Rs. 500 and Rs. 1,000 announced by Prime Minister Narendra Modi about a month ago.

"Previously, we've shown mobile money helps you with financial resilience. But no one has understood, if you improve resilience, what happens over the longer term. This is the first study that looks at long-term poverty reduction and at gender," said study co-author Tavneet Suri, Associate Professor at Massachusetts Institute of Technology (MIT) Sloan School of Management.

Suri has studied the financial and social impacts of Kenyan mobile-money services since 2008. (Also read: Five Best Personal Finance Tools)

Since 2008, access to mobile-money services increased daily per capita consumption levels of 194,000 of Kenyan households, lifting them out of extreme poverty, as per the study.

Such services have helped an estimated 180,000 women change their occupation from farming to business. Female-headed households saw far greater increases in consumption than male-headed households.

Over 270 mobile-money services were operating in 93 countries by 2015, with an estimated 411 million accounts, the researchers pointed out.

There is no doubt that the Kenyan study is important. It shows that mobile-money services are not just conveniences but also have a positive impact on people's livelihoods.

(Image: Indiatimes)

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