Common Futures

Empowerment
Despite the increasing popularity of mobile money, regulations in the
telecommunications and banking industries have hindered the adoption and
growth of this sector.
Communication Technologies (ICTs) and mobile devices, great opportunities
and challenges lie ahead for these two regions towards facilitating financial
inclusion.
Mobile technology for financial inclusion
While ‘traditional’ financial systems are yet to cater to large sections of rural
populations, especially in many parts of Africa and India, the ever-growing
mobile phone penetration could potentially be leveraged to enhance financial
inclusion. Countries like Tanzania have seen an exponential growth in the
mobile money sector in the last five years. 2 In many African countries, as well
as in India, there are now more mobile phones than bank accounts available to
citizens. As of September 2014, there were 130 live mobile financial inclusion
services offered to the still unbanked populations across 33 countries in Sub-
Saharan Africa. 3 In terms of employing mobile technologies to improve
financial inclusion, mobile money services, such as M-PESA in Kenya are
renowned for connecting the erstwhile unconnected to financial systems. In
India, financial inclusion by leveraging mobile technology is now beginning
to take off in earnest, through programs like The Prime Minister’s Jan Dhan
Yojana. Savings, credit and insurance are among the facilities enabled by
mobile money. There is also a growing evidence base of how mobile money
can enhance financial inclusion.
Despite the increasing popularity of mobile money, regulations in the
telecommunications and banking industries have hindered the adoption and
growth of this sector. In India, for instance, the telecommunication service
providers must work with banks to provide such services, and cannot act as
financial agents through their own sales outlets. Banks, on their part, are yet to
fill the gap in serving rural communities to enable the required collaboration
for mobile money services. 4 Similar challenges exist in Nigeria, Africa’s most
populous country and biggest economy. The introduction of Payments Bank
license guidelines in India is expected to give digital financial inclusion a major
boost, as they are regarded to be innovation-friendly regulations. Meanwhile,
in Nigeria, the market power of mobile network operators has led the Central
Bank of Nigeria to approve them to function as “super agents” for banks and
2 Simone Di Castri, and Lara Gidvani. Enabling Mobile Money Policies in Tanzania. Case Study,
London: GSM Association, 2014.
3 GSM Association. The Mobile Economy Sub-Saharan Africa 2014. Annual Report, London: GSMA
Intelligence, 2014.
4 Mobile Money Association of India (MMAI) and GSM Assocation (GSMA). Mobile Money: the
Opportunity for India. Position Paper, London: GSM Association, 2013.
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