Can Mobile Money Systems Have a Measurable Impact on Local Development?

33 Pages Posted: 20 May 2012 Last revised: 12 Jun 2015

See all articles by Magdalena Ramada-Sarasola

Magdalena Ramada-Sarasola

Towers Watson; Innovation & Research Multiplier; ORT University - Uruguay

Date Written: May 17, 2012


Mobile Money Systems can be seen as a technological innovation of high impact on developing countries and poorer population segments. They lower transaction costs and facilitate or enable financial transactions that either did not occur before or that were transacted at a higher risk and price. This has a direct impact on increasing the financial connectedness among distant households and individuals, enabling and facilitating trade, increasing households' ability to share and bear risk, increasing households' ability to allocate their resources more efficiently and modifying households' consumption patters. It further has an indirect impact on the challenging efficiency of the local traditional financial market, boosting local infrastructure and hence increasing labor demand and increasing the need for local innovation. In other words, MMS can be supposed to have a positive impact in terms of households' and the economy's allocation of resources and management of risks. Still, to which extent impact on development and well being can be localized to specific communities is not clear a priori. This paper develops a framework to assess MMS' impact on local development and suggests MMS design strategies that can influence consumption and saving behavior to redirect it so as to boost local development.

Keywords: mobile money, local development, financial inclusion, M-PESA, community currency

JEL Classification: E26, E42, E51, G21, O33, O16, O18

Suggested Citation

Ramada-Sarasola, Magdalena, Can Mobile Money Systems Have a Measurable Impact on Local Development? (May 17, 2012). Available at SSRN: or

Magdalena Ramada-Sarasola (Contact Author)

Towers Watson ( email )

255 Alhambra Circle
Suite 950
Miami, FL 33134
United States
3053428447 (Phone)

Innovation & Research Multiplier ( email )

Luis A. de Herrera 1248 - Of. 369
World Trade Center - III
Montevideo, 11300

ORT University - Uruguay ( email )

Bulevar Espana 2633
Montevideo, 11300

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics