Mobile Money for Financial Inclusion

Abstract

Evaluates the benefits and potential impact of mobile money, especially for promoting financial inclusion in the developing world, by providing an overview of the key factors driving the growth of services, while considering some of the barriers and obstacles hindering their deployment and identifying emerging issues. Mobile money has transformed the Kenyan economy, where mobile-facilitated payments now equate to a fifth of the country’s gross domestic product (GDP), and its impact is widening elsewhere as it is adopted across commerce, health insurance, agricultural banking, and other sectors. But while the poor can use mobile money to improve their livelihoods, innovative offerings require sufficient demand from consumers and firms—a variable missing in many contexts—and because this industry exists at the intersection of banking and telecommunications, some countries have different regulatory practices. Interoperability issues, as well as clashes in culture between banks and mobile operators, challenge cross-sectoral partnerships.