Eigitalization

Question 1

What is the core to financial wellbeing

Answer 1

• resilience - the response to shocks
• ## developing countries lack private insurance and public safety nets

Question 2

what do developing countries have instead of insurance

Answer 2

social ties - creating an insurance network

Question 3

why can social ties be an issue

Answer 3

• can lead to moral hazard / assymetric information and commitment issues

Question 4

Why would an insurance system be expensive

Answer 4

their are large transaction costs
- to diversify you need clients with different risk profiles
- But transcations have to cross geographical space which has costs.
- This limits networks to a small geographic space with often correlated shocks.

Question 5

What are the benefits of a digital payments system in countries where bank
access is extremely poor?

Answer 5

mobile money breaks down the notion that transaction costs are a function of
distance/geography.

Question 6

what is M-PESA in Kenya

Answer 6

• you can use it on any phone.
• put money in and out of it.
• agents can take physical money and give you virtual money and vice versa.
• no-need for phone credit.
• not integrated with the banking system.

Question 7

how did the poor adopt MPESA

Answer 7

• started in 2007
• it was slowly adopted among the poor
• in comparison to other goods it was a quick adoption
• in agriculture the adoption of tech is really slow but this was adopted quickly

Question 8

How do M- PESA agents compare to the banking system

Answer 8

they are 25 times the banking sector in the country

Question 9

who researched the impact of MPESA on households

Answer 9

Jack and suri

Question 10

what did jack and suri belive that MPESA did

Answer 10

M-PESA lowered the transaction costs of P2P (person to person) payments.
- mobile money breaks down the notion that transaction costs are a function of
distance/geography.

Question 11

what questions did Jack and Suri ask about MPESA (5)

Answer 11

what impact it had on households:
- through consumption
- savings
- resilience ti shocks
- earnings/ profits
- personal networks

Question 12

Jack and suri research design

Answer 12

sample: Large household panel survey across most of Kenya (92%)
conducted when: 2008, 2009, 2010, 2011 and 2014.
Yijt = γShockijt + δUserijt + βShockijt × Userijt + θXijt + αi + njt + πt + ϵijt
Shock is a measure of the income shock.
- User is a dummy variable for whether a household uses M-PESA.
- Xijt are control variables.

Question 13

what were the results of jack and suri research

Answer 13

• A reduction in poverty of 2 percentage points, approx. 196,000 households
  move out of extreme poverty.
• Approx. 186,000 women switched their main occupation from farming to
  being in a business/retail
• there were similar results in tanzania, uganda, mozambique and Bangladesh

Question 14

what did lee et al research

Answer 14

the effects of mobile money on consumption education health borrowings and savings

Question 15

what was lee et al 2021 sample and procedure

Answer 15

• focus on rural families which have migrant worker n Dhaka
• 30-45 min training on how to use mobile money
• assistance with paper work and any issues with mobile money

Question 16

what was lee et al results

Answer 16

• increased consumption and savings in rural households

Question 17

what did Riley 2022 research about mobile money

Answer 17

Can pressure to share money within the household explain why most female business in developing countries remain small and unprofitable

Question 18

what was the sample and procedure for Riley 2021

Answer 18

sample: 3000 female microfinance clients in urban Uganda
- control: cash loan
Mobile account: business labelled mm account + cash loan
mobile disbursement: business labelled MM account + loan on MM account

Question 19

what are the summary statics for Rileys experiment

Answer 19

• 65% married
• 60% spouse had a buissness
• average loan size $400 and average profit $100
• buissness are highly inventory focused

Question 20

according to riley 2022 how did mobile money help

Answer 20

• increases woman empowerment through two channels:
• increasing woman bargaining power within the household
• better enabling woman to enact their preferences
• Aker et al., 2016 finds that mobile money transfers raise women’s decision
  making power, spending on children, mobility and save time.
• Bastian et al., 2018 show that mobile savings accounts increased women’s
  empowerment in Tanzania.

Question 21

what heterogenous treatment effects of social pressures to share money

Answer 21

• married
• when has money on hand the spouse / family takes it
• another household business

Question 22

what did Riley et al find

Answer 22

mobile money allows to resist family pressure

Question 23

What is one challenge faced by traditional microfinance according to Karlan, Murdoch, and Mullainathan (2010)?

Answer 23

Low take up and high costs of delivery.

Question 24

What is an alternative to traditional microfinance that is suggested?

Answer 24

Fully digital banking on mobile phones.

Question 25

how does the digital banking work

Answer 25

- utilises a phone - uses mobile money - provides credit and saving -

Question 26

How popular is M-Shwari in Kenya?

Answer 26

Over 15 million accounts (75% of adults); 1 in 5 Kenyan adults (4.5 million) have an active loan on M-Shwari.

Question 27

What are the terms of an M-Shwari loan?

Answer 27

A 30-day loan with a fee of 7.5% per month; the first loan ranges between $1 and $100.

Question 28

What factors influence an M-Shwari credit score?

Answer 28

M-PESA transactions, airtime expenses, airtime loans, and airtime transfers.

Question 29

What happens if a loan is repaid on M-Shwari?

Answer 29

The loan limit increases if the loan is repaid and with savings.

Question 30

What is the consequence of non-payment after 120 days on M-Shwari?

Answer 30

The account is reported to the credit bureau.

Question 31

What was the key focus of the first paper by Bharadwaj, Jack, and Suri (2021)?

Answer 31

The effects of access to digital credit on outcomes.

Question 32

What was the take-up rate around the credit score cutoff in the study?

Answer 32

34% of those eligible took it up, much higher than other forms of formal financial access (1-5%).

Question 33

Did digital credit on M-Shwari substitute for other forms of credit?

Answer 33

No, it led to true expansion, not substitution for other forms of formal/informal credit.

Question 34

What improvements were noted from access to digital credit?

Answer 34

Improved resilience and a higher propensity to spend on education.

Question 35

What outcomes were not affected by access to digital credit in the study?

Answer 35

Overall consumption, assets, and employment.

Question 36

higgins 2021- buissness fin tech reserarch question

Answer 36

Do coordination failures constrain financial technology adoption?

Question 37

what did Higgins do 2021

Answer 37

- Exploit natural experiment that shocked financial technology Mexico distributed 1 million debit cards to cash transfer beneficiaries. (Prospera) - Combine administrative data on debit card rollout with rich collection of microdata on consumers and retail firms.

Question 38

What was the purpose of Mexico’s Prospera program from 2009-2012?

Answer 38

To distribute about 1 million debit cards to urban localities (population > 15K).

Question 39

Who were the recipients of the Prospera program before the intervention?

Answer 39

Urban recipients of the government cash transfer program receiving transfers in a Bansefi bank account, paid every two months. Flashcard 3

Question 40

What was the intervention in the Prospera program?

Answer 40

Issuing Visa debit cards attached to the recipients' accounts.

Question 41

What functionalities did the Visa debit cards provide to recipients?

Answer 41

They could withdraw funds from any bank’s ATM and use the debit cards at stores accepting Visa.

Question 42

What is required for the low-adoption equilibrium in the Prospera program?

Answer 42

Network externalities and fixed costs of adoption.

Question 43

What was a barrier to the adoption of non-bank e-payment companies like Square before 2013?

Answer 43

They did not enter the market until 2013.

Question 44

What potential tax cost was frequently mentioned in focus groups?

Answer 44

Non-monetary costs, such as paperwork, although formal registration was not required.

Question 45

What were the effects of the intervention on corner stores according to Higgins (2021)?

Answer 45

Sales increased by 6% and profits increased without cost increases.

Question 46

How did the intervention affect supermarkets?

Answer 46

Sales decreased by 12%, inventory costs decreased, and there was a small reduction in profits.

Question 47

What were the estimated welfare gains from the intervention?

Answer 47

Over half of the total consumer gains were spillovers, implying large indirect network externalities.

Question 48

How did consumer gains from spillovers compare to the costs of the debit card rollout?

Answer 48

Consumer gains from spillovers exceeded the debit card rollout costs by 37 times. 4o