The impact of mobile money on Rwandan household consumption

Cedras, Joshua

The impact of mobile money on Rwandan household consumption

Thesis / Dissertation

2025

Publisher

University of Cape Town

Department

School of Economics

Faculty

Faculty of Commerce

Abstract

Research on consumption patterns in developing countries shows that precautionary savings behaviour is common. This is driven by high-risk exposure to natural and economic shocks, and a lack of formal insurance mechanisms among rural farming households. The spread of mobile phones has introduced mobile money, which offers new financial opportunities to marginalized groups. This study examines mobile money's impact on consumption in Rwanda, using data from the Rwanda FinScope 2020 Survey. It applies probabilistic models and an instrumental variable approach to explore the relationship between mobile money use and consumption. The study finds that mobile money is financially inclusive and increases the likelihood of higher consumption among households. Remittances, representing financial flows between households, are key to this increased consumption smoothing. The findings suggest further research is needed to investigate whether household welfare improvements align with positive consumption patterns.

Keywords

Rwanda

Mobile Money

Reference:

Collections

Masters

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