Mobile Money and the Dynamics of Income Inequality

Evidence from Arua City, Uganda

Abstract

Purpose: This article examines the relationship between mobile money adoption and income inequality in Arua City, Uganda. Although mobile money is often promoted as a tool for financial inclusion, its distributional outcomes remain underexplored.

Methods: The study uses a mixed qualitative approach, combining household surveys, econometric analysis, and interviews to examine how mobile money affects income disparities. This methodology provides a comprehensive quantitative insight into usage patterns, household income distribution, and individual experiences.

Results: Results indicate that mobile money facilitates financial participation, enhances household resilience, and expands economic opportunities, particularly for marginalized groups. However, unequal uptake driven by differences in education, digital literacy, and access to complementary financial services creates a paradox: while mobile money reduces some barriers to inclusion, it simultaneously risks amplifying socioeconomic divides.

Implications: The study advances the literature on digital finance by highlighting the context-specific mechanisms through which mobile money influences income inequality. Policy implications point to the need for targeted interventions that strengthen digital capabilities, expand access across income groups, and ensure that financial innovation contributes to equitable development.