Does Digital Financial Inclusion Improve Food Security and Household Resilience? Evidence from Northern Ghana

Mobile money (MoMo) has emerged as an important digital technology for promoting financial inclusion among resource-poor households in developing countries. However, an important research question that is yet to receive considerable attention in the literature is whether MoMo adoption could enhance food security and household resilience in developing countries. This study employs food insecurity experience scale (FIES), household dietary diversity score (HDDS), and resilience capacity index (RCI) as the outcome measures. Data collected from 472 farm households in three semi-arid regions are analyzed by employing inverse probability weighting regression adjustment (IPWRA) and treatment effects using the least absolute shrinkage and selection operator (TELASSO) method to address endogeneity issues. Our results show positive effect of MoMo adoption on HDDS, reduction of moderate food insecurity, and FIES score. While RCI did not improve, we found that MoMo adoption increases key pillars of the index such as access to basic services, assets, and social safety nets. Overall, the results demonstrate that MoMo adoption increases food security and key components of resilience. We recommend that future policies on digital economic transformation should take into account the adoption of MoMo services in order to enhance the welfare of farm households in developing countries.