Heterogeneous effects of mobile money on multidimensional poverty in Sub-Saharan Africa: Role of remittances
Keywords:
Mobile money, multidimensional poverty, remittances, heterogeneity, Sub-Saharan AfricaAbstract
This article examines the effect of mobile money on multidimensional poverty in 35 Sub-Saharan African (SSA) countries over the period 2006–2020. Contrary to previous work, this article shows that SSA countries may follow different poverty groups and that the effect of mobile money may vary across these groups. Using the finite mixture model (FMM), the results show that SSA countries can be classified into two groups. In the first group, mobile money reduces multidimensional poverty, whereas in the second group, it has no significant effect. They also indicate that higher remittances amplify the effect of mobile money on reducing multidimensional poverty, allowing countries in group 2 to move to group 1. These results call on policymakers to encourage remittances and stimulate mobile money in order to reduce multidimensional poverty in SSA. These policies must be accompanied by educational policies to facilitate the adoption of mobile money among the population.
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