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Does Financial Literacy Influence Use of Mobile Financial Services? Evidence from Malawi Household Survey Data

Mirriam Muhome Matita
Takondwa Chauma


Mobile financial services are gaining prominence and could be a possible solution to fast-track financial inclusion in developing countries including  Malawi. However, adoption and usage of such services remains low among Malawi population. This study investigates the influence of financial  literacy on financial behaviour of individuals in Malawi, specifically use of mobile phone based financial transactions. Descriptive and econometric  analyses were conducted using crosssectional data comprising 4, 999 individuals obtained from the Reserve Bank of Malawi. Findings reveal the  likelihood of using mobile financial services increases with increasing levels of financial literacy, type of employment and peri-urban residence.  Furthermore, men are more likely to transact on mobile phones than females and that although income levels matter in the use of mobile financial  transactions, the magnitude of effect is negligible. Results suggest opportunities for expanding access to financial services and products such as  differentiation in financial literacy education by characteristics of population including gender of users. Informal settings do not preclude expansion  of digital payments hence financial product innovation and addressing rural residents’ constraints to access of mobile financial services is crucial. 

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print ISSN: 2312-9204