Recent years have seen rapid digitization in developing countries, from mobile money platforms to bio-metric smart cards. The use of mobile money to streamline payments is only becoming more commonplace. Despite this, relatively little is known about the effects of switching to mobile money. Focusing on BRAC Uganda microfinance groups, this study focuses not only on the barriers to uptake of mobile money repayment methods, but also the effects of digital repayment on the microfinance model and other aspects of borrowers’ lives.
The research team uses a randomized control trial to evaluate the effects of digital repayment for microfinance, looking both at barriers to take-up and the effects of digital repayment on the integrity of the microfinance joint liability model. Individuals are randomized into three groups: 1) an individual choice group where individual borrowers are each allowed to opt in or out of digital repayment, 2) a digital repayment group where all borrowers in that group are asked to repay digitally, and 3) a comparison group with the traditional microfinance model.
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