Cities that use mobile money apps lose significantly less green space and trees during major droughts.
April 26, 2026
Original Paper
Digital Financial Infrastructure and Climate Resilience: Evidence from Mobile Money Adoption
SSRN · 6632738
The Takeaway
Digital payment tools are usually evaluated for their convenience or financial efficiency. In developing regions, these apps act as a buffer that prevents people from cutting down trees or over farming land for emergency cash during a climate crisis. When a drought hits, families with access to mobile money can receive instant transfers from relatives elsewhere to buy food. This financial lifeline removes the immediate need to exploit local natural resources for survival. A digital app on a phone can physically preserve the local environment by changing how a community reacts to a disaster.
From the abstract
Does digital finance help communities withstand drought? We study 132 cities across 34 fragile and conflict-affected states over 2000-2021 using satellite vegetation data. Drought reduces vegetation by 3.8 percent per standard deviation, but cities with mobile money experience significantly less damage-an effect that is stable across specifications. In the encompassing specification, mobile money is the only statistically significant moderator of drought damage. Event studies show that mobile mo