Browsing by Author "Macha, Deogratias Philip"

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    Mobile financial services in Tanzania: implications on financial inclusion, household welfare and monetary policy
    (University of Dar es Salaam, 2015) Macha, Deogratias Philip
    This study examines factors that determine use of mobile money transfer relative to other modes of transfer in the country and the impact of mobile financial services on welfare of recipient households; as well, it analyzes the impact of mobile financial services on monetary policy. The used models include probit and multivariate probit models, the propensity score matching method (PSM) and Ordinary Least Square (OLS) method and Johansen procedure, respectively for each of the three objectives. The propensity score matching method was particularly used due to its advantage with respect to data limitations and its strength in addressing the identification problem. The results showed a reduced probability of population owning mobile phones to use contact person mode of money transfer and increased probability of using bank and mobile phone modes of money transfer. Furthermore, the results established a reduced probability of population income (below TZS 50,000), living far from mobile money agents and banks using mobile phone mode. The multivariate results also show complementarities of money transfer modes in 2009 and substitutability of the same modes save for bus and mobile phone modes in 2013. The study further established significant mean difference of welfare between recipient and non-recipients of mobile money; the result that cannot fully be attributed to mobile money but partly considered to increase the diversity of income of recipient households. In addition, the study established negligible welfare impact of mobile money on households below basic need poverty line (Group I: TZS 0-474,226) and significant welfare impact on households with income above basic needs poverty line (Group II: TZS 474,227-7,692,088). The impact of mobile money on money demand and thus the velocity of money function after the introduction of mobile money (2008:4-2013:12) was established to be insignificant and money multiplier was found to have been stable. The policy implication is the need to address risks and capacity of both Customers and providers of mobile money services, including issues related to identification and security for in-depth financial inclusion through mobile phones.