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Learning to walk before you run: financial behavior and mobile banking in Madagascar

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In Madagascar, Orange introduced its mobile banking services in September 2010. Mobile-banking is a system that allows users to conduct a number of financial transactions through a mobile phone. The existing body of literature suggests that using m-banking services may have a positive impact on individual savings, affect money transfer behavior and/or encourage financial inclusion. In 2012, we conducted a survey of 598 randomly selected Orange clients in Antananarivo. We use the matching methodology to assess the impacts of m-banking on clients' financial behavior. The results show that using m-banking services increases the number of national remittances sent and received. Yet we find that using m-banking services has no significant impact on sums saved by users or sums of remittances sent and received. This lack of impact on savings may have to do with the characteristics of the individuals we studied as well as a lack of financial incentives.

Image: ©IRD - Hardi - Thibaut Vergoz