Does Mobile Financial Inclusion Affect Poverty-Reduction in Morocco: A Propensity Score Matching Analysis

Financial inclusion refers to the provision of accessible and affordable financial services, which play a fundamental role in sustainable development by allowing investment, supporting consumption smoothing, and boosting resilience to economic shocks. Despite significant strides in financial sector development, a persistent gap remains; over 30% of the adult population in Morocco lacks access to formal banking or non-bank financial services. Paradoxically, the nation has witnessed a rapid digital leap, with approximately 65% of its citizens registered as users of mobile payment (MP) applications. This divergence presents a critical puzzle: can digital financial services bridge the inclusion gap and serve as a potent tool for poverty alleviation? This study investigates the causal impact of both typical financial inclusion (FI) and digital mobile payments on reducing monetary poverty in the Moroccan context. Using a rigorous quasi-experimental methodology, we use Propensity Score Matching (PSM) techniques on data from the World Bank’s Global Findex survey to address the issue of self-selection bias. In addition, this method allows us to construct a robust counterfactual by matching individuals who use financial services with statistically similar counterparts who do not, thereby isolating the true effect of FI and MP adoption on poverty outcomes. Our investigations provide compelling evidence that access to and use of financial services exerts a significant negative effect on monetary poverty. Furthermore, the analysis demonstrates a strong, statistically significant negative correlation between mobile payment adoption and poverty levels. The empirical results indicate that mobile payment usage translates into an average reduction of approximately 2% in poverty rates among users, suggesting that digital channels are not merely an alternative but an enhancement to traditional inclusion methods. The poverty reduction benefits are significantly amplified when financial services are delivered through mobile platforms, enhancing the unique role of digital technology in extending reach, alleviating transaction costs, and improving efficiency. These results demonstrate the transformative potential of digital finance in achieving socio-economic goals. Consequently, this study advises Moroccan banking and telecommunications authorities to move beyond traditional approaches and actively foster a conducive ecosystem for digital financial services. Policy recommendations include promoting interoperability between platforms, investing in digital literacy campaigns, and implementing regulatory frameworks that encourage innovation while ensuring consumer protection. By strategically encouraging the widespread adoption and use of mobile payment systems, policymakers can significantly accelerate financial inclusion and effectively combat monetary poverty across the nation.‎