The effect of mobile money usage on household consumption in Uganda

Abstract

Mobile money has become an important financial service in Uganda, yet its relationship with household consumption remains insufficiently understood, particularly across rural and urban households. This study examined the effect of mobile money usage on household consumption in Uganda, with specific focus on mobile money adoption and rural–urban differences. The study used a quantitative cross-sectional design based on secondary data from the 2023/24 Uganda National Household Survey conducted by the Uganda Bureau of Statistics. The analysis included 1,576 households. Household consumption was measured as the natural logarithm of annual per-capita household consumption, while mobile money adoption was the main explanatory variable. Age, sex, education level, household size, employment status, household wealth, geographical region, and rural–urban residence were included as control variables. Descriptive statistics, bivariate analysis and multivariable linear regression were conducted using STATA. The findings showed that mobile money adoption was positively and statistically significantly associated with household consumption. Households with an active mobile money account had approximately 12.8% higher annual per-capita household consumption than households without an active account, holding other factors constant. However, the interaction between mobile money adoption and urban residence was not statistically significant, indicating no evidence of a rural urban differential in this relationship. The study concludes that mobile money adoption is positively associated with household consumption in Uganda, although the cross-sectional design does not establish causality. The study recommends strengthening access to affordable digital financial services and financial literacy to enhance effective mobile money use among households