BOX 1.2 TEXT REFERENCE FOR THIS BOX Are mobile money accounts narrowing the gaps in account ownership?

In Sub-Saharan Africa the mobile phone is increasingly being used to extend financial services past the limits of bank branches. Mobile money accounts, by providing more convenient and affordable financial services, offer promise for reaching unbanked adults traditionally excluded from the formal financial system—such as women, poor people, young people, and those living in rural areas.<sup>a</sup> Have they helped narrow the gaps in account ownership? The evidence from Sub-Saharan Africa so far is mixed.<sup>b</sup> Consider four countries where about 20 percent of adults have a mobile money account only—Côte d’Ivoire, Kenya, Tanzania, and Uganda. These countries allow a useful comparison of gaps in the ownership of financial institution accounts and in the use of mobile money accounts only.<sup>c</sup> (Because the focus is on adults who have a mobile money account but are otherwise unbanked, adults who have both types of accounts are counted among those who have a financial institution account.) In Uganda there are large and statistically significant gaps in the ownership of financial institution accounts and of mobile money accounts only—with ownership of each type less likely for women than for men, less likely for adults in the poorest 40 percent of households than for those in the richest 60 percent, and less likely for young adults (ages 15–24) than for older ones (age 25 and above).<sup>d</sup> In Tanzania there is a significant gap between the two household income groups for both financial institution and mobile money accounts, but a significant gender gap only for mobile money accounts. Yet for mobile money accounts the gap between the household income groups (13 percentage points) is nearly twice the size of the gap between men and women (7 percentage points), suggesting that poverty is a much bigger barrier than gender.<sup>e</sup> Mobile money plays a very different role in Côte d’Ivoire and Kenya. These two countries have quite dissimilar levels of overall account penetration (34 percent and 75 percent, respectively), but both have large and statistically significant gaps in the ownership of financial institution accounts between women and men, between the two household income groups, and between age groups. But there are no statistically significant gaps between these groups in the ownership of a mobile money account only. Indeed, in Kenya adults in the poorest 40 percent of households are significantly _more_ likely than adults in the richest 60 percent to have a mobile money account only (with 27 percent of poorer adults but just 14 percent of richer adults having a mobile money account only). So in these two countries mobile money accounts are helping to create greater parity in account ownership between men and women, between rich and poor, and between older and younger adults.

- a. The urban-rural gap in account ownership is not examined here because of the challenges of precisely estimating account ownership among the urban population in these countries. For an explanation, see the section on the urbanrural gap in this chapter.

- b. This is consistent with results shown by Claudia McKay and Michelle Kaffenberger in “Rural vs Urban Mobile Money Use: Insights from Demand-Side Data,” Consultative Group to Assist the Poor (CGAP) blog, January 23, 2013, http://www.cgap.org/blog/rural-vs-urban-mobile-money-use-insights-demand-side-data.

- c. Such a comparison is possible in only a limited number of countries because the Global Findex survey typically covers only 1,000 adults per country and the share of adults with a mobile money account only is relatively small. The small number of observations makes it challenging to precisely estimate gaps and draw statistically significant conclusions.

- d. Statistical significance is based on t-tests.

- e. Overall account penetration is 40 percent in Tanzania and 44 percent in Uganda.

> THE GLOBAL FINDEX DATABASE **24**