Digital connectedness in developing countries and its impact on financial choices

By Sudha Vijay, Anne Marie van Swinderen & Aukje te Kaat
Posted on July 11, 2018

We live in a digital age where information and communication technologies - think laptops, mobile phones and the Internet - flourish. The mobile phone in particular has nestled into all we do: communicating, connecting socially, banking, generating income, receiving an education, and getting access to help, health care and even activism[1]. Young people are often first to adopt such technologies[2], using them as a means to connect with others, and to manage different facets of their lives.

“Digital finance is booming in developing countries via mobiles and the Internet.”

Technology is disruptive and is changing the way individuals relate to and interact with society. Digital finance services specifically have changed interactions between consumers and banks. People’s perception and management of money (including saving, making payments and taking loans) has become less complex and more secure.

In developing countries, there are now an estimated 690 million registered mobile money accounts across 90 countries, including 338 million registered accounts in Sub-Saharan Africa[3]. Digital finance is booming in this area, providing financial services via mobiles and the Internet. Digital technology has forever changed our common accessibility to financial services. It also improved financial inclusion of the poor[4].

Examining mobile connectedness

Aflatoun International, an NGO offering social and financial education to children and young people worldwide, and L-IFT, a social enterprise dedicated to Low-Income Financial Transformation, are joining forces to find out how digital connectedness impacts financial choices and decisions of young people in developing countries.

We used the financial diary approach to understand the mobile connectedness of young people in Uganda. This research methodology consists of frequently interviewing the same respondents over several months, at least once every two weeks. Respondents are asked basic standardized questions about their income, expenditures, savings, loans and the like. This will give us a glimpse into the fluctuations of finances, helping us capture complexities[5].

The first part of our research will focus on data collected by L-IFTs financial diaries project - across 12 districts of Uganda. We will investigate how young Ugandans use digital finance in their day-to-day lives. This includes: forms of non-cash transactions, safe-keeping of money and mobile money - a service offered by two telecom companies: MTN Uganda and Airtel.

“What will we do next?”

We will look in more depth at one particular mobile money service; MoKash, which offers saving options and small short-term loans via a phone number. Users only need their SIM to be registered on their proven identity and address. Such services are hugely more accessible and easier to use: people can save, spend and take loans, simplifying trade and reduce travel cost.

MoKash is of particular interest to us because it was launched in tandem with L-IFTs financial diary baseline survey (August 2016). The diaries will provide invaluable information on the uptake of this new digital product in its first 8 months of existence. By studying the trends underlying mobile money services, including MoKash, we will find out when and why people sometimes use digital channels – but mostly continue to use cash.

We will also conduct focus group discussions with young Ugandan people. To understand our quantitative findings better, we want to find out the reasons behind our findings in the diaries: why people sometimes use mobile money while others still mostly use cash, what the main use of their mobile phone is, whether women have less access to phones and whether this leads to women and men having different relationships with their phone.

Do mobile phones give young people more access to financial services, to business and work opportunities? That’s our central research question. Secondly: does it strengthen their social life and impact their subjective well-being?[6][7] Financial institutions will want to know about this, as it will help them to serve the new era, of digitally connected youth, in a way that is in line with their preferences. We are excited about what we will discover.

Sudha Vijay is an independent consultant, Anne Marie van Swinderen is the Managing Director at L-IFT, and Aukje te Kaat is a Senior Research Manager and Gender Adviser at Aflatoun International.

[1] Pearson, A. L., Mack, E., & Namanya, J. (2017). Mobile phones and mental well-being: initial evidence suggesting the importance of staying connected to family in rural, remote communities in Uganda. PloS one, 12(1), e0169819.
[2] Haledwood & Kenny. (2008). Young People and ICTs in Developing Countries. Retrieved May 25, 2018 from:
[3] 2017 State Of The Industry Report On Mobile Money Executive Summary. Retrieved 25 May, 2018 from
[4] Kikulwe, E. M., Fischer, E., & Qaim, M. (2014). Mobile money, smallholder farmers, and household welfare in Kenya. PloS one, 9(10), e109804.
[5] L-IFT. (n.d.). Financial Diaries. Retrieved May 30, 2018 from:
[6] GSMA. (2018). The Impact of Mobile on People’s Happiness and Well-Being Technical Report. Retrieved May 26, 2018 from:
[7] Gao, Y., Li, H., & Zhu, T. (2014). Predicting Subjective Well-Being by Smartphone Usage Behaviors. In HEALTHINF(pp. 317-322).