In an earlier post, I discuss how financial exclusion forces the unbanked and people living in poverty to spend more money accessing financial services. Financial exclusion imposes higher costs and also limits a person’s ability to save, invest and access credit formally. In 2014, Jack and Suri suggested that a lack of formal investments and savings can often make a person rely on informal financial risk-sharing mechanisms when faced with financial crises. New research from Ahmed and Cowan (2021) [gated] looks at the effects of mobile money transfer technologies (MMTs) on the use of health care services during health shocks. By definition, health shocks are periods of sickness that cause someone to miss school or work. Ahmed and Cowan’s focus on the use of health care services is a deviation from the popular emphasis on how MMTs can influence financial inclusion in general or the ability of MMTs to lead to gender parity as seen in other studies.
In this post, I highlight insights on Ahmed and Cowan’s results of the unintended effect of MMTs on health care usage, household consumption and its complementary role among other financial risk-sharing mechanisms. I also share my thoughts on how the introduction of other variables like household income might provide additional insights into household utilization of MMTs in future studies.