Date of Graduation

Spring 5-16-2014

Document Type


Degree Name

Master of Science in International and Development Economics (MSIDEC)



First Advisor

Professor Yaniv Stopnitzky


Mobile money payment systems have spread rapidly around the world in the last decade. Given developing countries are powered by informal economies that traditionally have had limited access to information technologies, mobile payment system infrastructure has the potential to transform the way microenterprises conduct business. Through a pilot study in Livingstone, Zambia, I examine the effect of mobile money usage on microenterprise profits. I employ an instrumental variable strategy using the type of mobile operator as the instrument to address the selection bias in adoption, as mobile money services are available to everyone. In this urban context, I find initial evidence of positive net marginal benefits for microenterprises using mobile money, and I calculate bounds that range between 36% and 74% increase in profits. This study helps fill the gaps in the nascent microenterprise and mobile money literature and offers guidance to public and private policy makers regarding this market segment.