Digital Remittances and Access to Alternative Financial Services among the Unbanked Population in South Asia: a Quasi-Experimental Approach

This study examines the relationship between digital remittance receipt and access to mobile-money-enabled alternative financial services among unbanked individuals in South Asia using the 2021 World Bank Global Findex dataset. The analysis focuses on unbanked domestic remittance recipients and compares individuals who received remittances through mobile money account with those who received remittances through non-digital channels. We use propensity score matching as the main empirical strategy and complement the analysis with Lewbel’s heteroskedasticity-based IV estimation as a robustness check. The outcomes include utility bill payments, mobile money savings, government payment receipts, payments made, and wage receipts. The results show a positive and significant association between digital remittance receipt and access to mobile-money-enabled alternative financial services, except for mobile money savings. Heterogeneity analysis further shows that the associations are larger among women, rural households, individuals with secondary education, and middle- and higher-income groups. These findings suggest that digital remittances may serve as an entry point into broader mobile-money-enabled financial service use among underserved populations in South Asia.