Welfare Impact of Mobile Financial Services Business Among Youth in Urban and Peri-urban Tanzania

Abstract

In African countries like Tanzania, mobile financial services (MFS) is one of the empowerment strategies to enhance economic well-being through the provision of necessary tools and resources to enhance entrepreneurship and business development. However, existing studies have paid less attention to MFS agents’ welfare impact, mostly on youth in this sector. Using a survey of 310 youths from four selected Local Government Authorities in Tanzania, this study explores the factors that drive the decision of youths to participate in livelihood-based activities such as MFS and the effect of their participation on their welfare. The findings from the propensity score matching (PSM) modeling technique revealed that socio-economic-based factors (education, marital status, and experience) and institutional-based factors (business ownership status, deployment of risk management initiatives, and perception regarding the cost of running a business) influence youth participation in MFS-based activities and the magnitude of impact in their welfare. The study’s results highlight the influence of both socio-economic and institutional variables on the participation of youths in MFS-based activities. The findings suggest that it would be necessary to promote development programs that are geared towards enhancing the capacities of youth with regard to MFS businesses to enhance their welfare. These include business-related training, awareness, and provision of financial resources via enhancing access to training on savings and credit.