Solar home systems are accelerating the spread of mobile money in rural Malawi, according to new academic research. But the households benefiting most are not the poorest.
A peer reviewed study found that rural households owning solar systems are about 40 percentage points more likely to use mobile money than otherwise similar households without solar power.
Mobile money has become the principal financial tool for many rural Malawians, enabling transfers, savings and access to informal credit in areas with few bank branches.
But when read alongside related research from the same region, the findings suggest an uncomfortable pattern: solar-driven financial inclusion is disproportionately reaching households that are relatively better off.
The study was published in February in the journal, Energy Economics. It analyses a two-wave quasi-experimental dataset covering 1 138 households in 28 villages in Lilongwe District surveyed in 2022 and 2023.
Researchers from the University of Michigan, Duke University, Harvard University and Lilongwe University of Agriculture and Natural Resources used statistical techniques including propensity-score matching and mediation analysis to examine how solar ownership affects financial behaviour.
Malawi’s electricity access remains among the lowest in the world. According to data from the World Bank, roughly 14% to 16% of the population had electricity in 2022–2023, with rural access at just 6.1%.
In villages covered by the study, households without electricity reported spending about 255 minutes a month traveling to charge cellphones, typically at trading centres or neighbours’ homes.
Solar systems largely eliminate that burden. Researchers found the main driver of increased mobile money use was simply the ability to charge phones at home.
Households with home charging had more than four times the odds of using mobile money compared with those that had to travel.
Solar ownership also correlated with increased participation in informal savings groups such as village savings and loan associations and savings and credit cooperatives, which often use mobile money for transactions. Participation in the groups roughly doubled among solar adopters, the study found.
By contrast, researchers detected no statistically significant relationship between solar ownership and holding a formal bank account, underscoring the continued dominance of informal finance in rural communities.
The researchers attempted to rule out reverse causality — the possibility that financially included households are simply more likely to buy solar systems.
Using cross-lagged panel models and an instrumental-variable approach, the study concludes that solar adoption appears to drive mobile money use, rather than the reverse.
A companion study led by researcher Thomas Mahieu, published in 2025 in the journal Energy Research & Social Science, adds another dimension.
Drawing on a larger dataset from the same district, the study found wealthier households were more than twice as likely as poorer households to adopt solar home systems.
The typical device in the sample generated around six watts of electricity, only slightly above the five-watt threshold the World Bank uses to define basic electricity access. The output is usually sufficient only to charge a phone and power a single light.
The research also found a high disadoption rate. Nearly three in 10 households abandoned solar devices within a year, with standalone panels showing abandonment rates of roughly 40%.
Households cited device failures, high costs and poor quality as common reasons. The authors warn that treating solar ownership as equivalent to reliable energy access can be misleading.
The findings raise questions about the effectiveness of some electrification programmes.
Malawi’s Ngwee Ngwee Ngwee Fund, formally known as the Malawi Off-Grid Market Development Fund, supports rural solar expansion through results-based financing backed by the World Bank.
Participating firms include Yellow Solar, Zuwa Energy, Green Impact Technologies, VITALITE Group and StarTimes Media. Programme documents cite targets of about 200 000 new household connections by mid-2024.
But independent household survey data collected by researchers in Lilongwe District over a similar period show only about a 4.5-percentage-point increase in solar ownership.
Based on publicly available information, the gap between programme-reported results and measured household adoption has not yet been fully reconciled.
A separate claim has also sparked debate. In early 2025, former energy minister Ibrahim Matola reportedly told parliament that rural electricity access had reached 25%. Available data from the World Bank place rural access at 6.1% in 2023 and the methodology behind the minister’s figure has not been made public.
The issue extends beyond Malawi. The International Energy Agency has identified mini-grids and standalone solar as among the most feasible technologies for expanding electricity access across Africa.
Yet global monitoring suggests only a fraction of off-grid solar users have systems meeting international quality standards.
At the same time, mobile money is expanding rapidly. Industry data from the Global System for Mobile Communications Association shows strong growth in mobile money accounts across sub-Saharan Africa, including Malawi, where usage has risen from well below a fifth of adults in the mid-2010s to roughly half of adults by the early 2020s.
The Malawi studies highlight a practical connection: electricity for charging phones can unlock access to digital finance.
Taken together, the research paints a complex picture. Solar home systems appear to boost mobile money use and participation in community savings groups, primarily by making it easier to keep phones charged.
But the households most likely to adopt, and keep, solar systems are those somewhat better off, while poorer households face barriers to entry or abandon systems after purchase.
As one study concludes, the off-grid solar market in this context might reinforce socioeconomic inequalities rather than eliminate them.
For policymakers and development lenders, the central question is whether market-driven solar expansion can reach the poorest households without significant subsidies.
Evidence emerging from rural Malawi suggests that, under current conditions, it does not — at least not yet.
New research links rural solar adoption to mobile money use, while raising concerns about inequality
