Fintech and Savings in African Countries: The Case of Mobile Money

Abstract This paper examines how mobile money changes both financial participation and the mechanisms through which households save. Using harmonized FinScope surveys from Malawi, Tanzania, and Uganda for 2013, 2017, and 2021, we instrument mobile money use with distance to the nearest agent and estimate linear-probability two-stage least squares models with individual, remoteness, and country-year controls. Mobile-money use increases the probability of saving, borrowing, and sending and receiving remittances. The paper’s main contribution is the saving-mechanism decomposition: mobile money raises saving through digital platforms and other financial institutions while reducing reliance on banks and rotating savings and credit associations. These results indicate that digital finance reshapes household saving portfolios rather than merely increasing aggregate saving. The findings are qualitatively robust across alternative specifications and provide evidence from both mature mobile money markets and Malawi, a later-adopting and comparatively understudied setting. ( JEL D14, G51, O12, O16)