Zap It to Me: Impacts of a Mobile Phone-Based Cash Transfer Program in Niger

Paper Abstract: Conditional and unconditional cash transfers have been effective in improving development outcomes in a variety of contexts, yet the costs of these programs to program recipients and implementing agencies are rarely discussed.  The introduction of mobile money transfer systems in many developing countries offers new opportunities for a more cost-effective means of implementing cash transfer programs.  This paper reports on the first randomized evaluation of a cash transfer program delivered via the mobile phone.  In response to a devastating drought in Niger, households in targeted villages received monthly cash transfers as part of a social protection program.  One-third of targeted villages received a monthly cash transfer via a mobile money transfer system (called zap), whereas one-third received manual cash transfers and the remaining one-third received manual cash transfers plus a mobile phone.  We show that the zap delivery mechanism strongly reduced the variable distribution costs for the implementing agency, as well as program recipients’ costs of obtaining the cash transfer.  The zap approach also resulted in additional benefits: households in zap villages used their cash transfer to purchase a more diverse set of goods, had higher diet diversity, depleted fewer assets and grew more types of crops, especially marginal cash crops grown by women. We explore the mechanisms and cost-effectiveness of these effects.

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