Diffusion of mobile banking among rural women: Incentivizing local leaders vs. a marketing campaign

Abstract

How can we promote the adoption of mobile banking among the socially and economically disadvantaged? We compare the effectiveness of two strategies, seeded diffusion via incentivized local leaders and a traditional marketing campaign, to promote the adoption of mobile banking among poor women in rural Peru. For the first one, we exploit the existence of local leaders who were trained by a local firm to promote the diffusion of a mobile banking application. For the second, we take advantage of an on-going traditional marketing campaign at the regional level. Our findings show that the personalized seeded diffusion via local leaders is an effective promotion strategy. It significantly outperforms the traditional campaign, during which adoption rates are statistically indistinguishable from zero. We additionally show that the seeded incentivized diffusion relies on features of the underlying community networks known to promote diffusion of information and trust. Our results emphasize the necessity of personalized approaches to promote technological products such a mobile banking among vulnerable populations.