“A Paypal for the Un-Banked”: Analyzing Mobile-Based Micro-Cash Transfers in a Large Developing Economy

Abstract

High levels of financial exclusion in developing countries have left millions of citizens with inadequate access to financial services. While various solutions and strategies have been developed to cope with this challenge, in the current research, we explore a popular model of cash exchange through transferring mobile phone prepaid balance as an emerging and credible alternative to physical cash transfer in a large and fast growing Asian economy. Specifically, we analyze individual-level phone records to uncover potential associations between the users’ communication patterns and their balance transfer behaviors. Based on our preliminary analyses, we uncover insights about (i) the factors, especially those that are communication-related (e.g. communication intensity, number of unique recipients etc.), which are associated with users’ participation in such balance transfers and (ii) potential ways of identifying users who are likely to participate in balance transfers, so that financial institutions can then target them with additional financial services. Moreover, we emphasize the importance of communication-based factors in predicting economic mobility in developing countries.