Mobile money and households' ability to respond to health shocks in Africa: Evidence from Madagascar.

Promoting the use of mobile money seems to be an important way of improving financial inclusion and households ability to cope with health shocks. This study aims to analyze the impact of mobile money usage on households ability to respond to health shocks in Madagascar. We also investigated the differential impact for disadvantaged groups such as female, less educated and rural people. FinScope database on financial inclusion is used. Employing an instrumental probit model, the results reveal that the use of mobile money increases households' ability to respond to health shocks by about 44.8%. The mains coping mechanisms include used of savings and assistance from friends/family. Results also reveal that the use of mobile money favors households in urban area compared to those in rural area. Women benefited more compared to men. Overall, these findings could inform policy makers on how to improve financial inclusion for disadvantaged groups and reduce vulnerability to health shocks in Africa.