Migration, Money Transfers and Mobile Money: Evidence from Niger

Internal and regional migration serves as an income source for millions of households in West Africa. Despite substantial volumes of remittances, the cost of cross-border payments in the West African Economic and Monetary Union (WAEMU) is estimated to be one of the highest in the world.  The introduction of digital financial services – primarily mobile money – offers new opportunities for reducing the transaction costs associated with remittances.  Nevertheless, the adoption of such services in West Africa remains low, and a majority of households are still highly dependent upon informal money transfer systems. Using survey data in Niger from an eight-year period, we estimate the value of remittances from migrants from Niger, as well as the relative cost of money transfers. We find that mobile money adoption remains low in Niger, despite the fact that it is less costly as compared with informal mechanisms and mobile phone ownership is high.  Yet there is relatively high willingness-to-pay amongst rural households, measured at or above the market price for mobile money transfers. Willingness-to-pay seems to be relatively higher in areas with greater access to mobile money agents, despite similar rates of migration.  This suggests that one of the primary barriers to mobile money adoption could be access to the necessary infrastructure.