We’ve been running an occasional podcast series with some of the voices we’re listening to this year as part of the CGAP/DFID Branchless Banking in 2020 scenarios work. The process is based on one driving question: How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020? You can participate directly through this blog or posting discussions through our Mobile Banking and Microfinance LinkedIn Group. –Jim
Before she became a Vice President in the World Bank, I had the opportunity to speak with Shamshad Akhtar for a few minutes on the side of a scenarios workshop that was held in Cape Town last spring. She had recently completed her service as Governor of the State Bank of Pakistan(2006-2009), a Federal Ministerial level ranking. During this period she was also a Governor of the IMF. In 2006 and 2007 she was nominated Asia’s Best Central Bank Governor by Emerging Markets and the Banker’s Trust.
I asked her to say a bit about her views on the role that regulators and policymakers can play in fostering branchless banking as one of many tools to increase financial inclusion.
India’s new government has promised big moves on poverty reduction. At the center is a plan to provide a new biometric ID card to every one of India’s one-billion plus citizens. To lead it, the government has tapped Nandan Nilekani, cofounder of Infosys, one of India’s biggest computer-services companies.
Part of the concept’s appeal is slashing widespread “leakage” (fraud, corruption, theft) in the government’s already prodigious subsidies intended for the poor. One in ten Rupees spent by the government are aimed at poor households – for example, India’s National Rural Employment Guarantee Scheme paid workfare wages to more than 35 million un-employed people last year.
Today’s the second and final day of this year’s Mobile Money Summit, and the key words here are data and partnerships:
Data - around the market opportunity for mobile money – by the year 2012 CGAP and GSMA estimate there will be 1.7 billion people with a mobile phone but not a bank account and as many as 364 million unbanked people could be reached by agent-networked banking through mobile phones;
Mobile phones may have a huge role to play in expanding access to finance. But does the company that operates the mobile network need to actually provide financial services? Or should others offer financial services, with the mobile operator merely providing the underlying wireless connectivity? The fact that mobile phones can be used as transactional devices doesn’t necessarily mean that the mobile operator needs to “own” the financial service.
We’re just two weeks from the Mobile Money Summit…where all will be revealed – the results of the CGAP-GSMA Mobile Money Market Sizing Study. The findings describe in detail how unbanked people use mobile money services, and also provide a framework based on industry best practices to help mobile operators drive initial adoption and progress towards more sophisticated offerings, such as savings and credit. Read the rest of this page »
It seems like every week there’s a new market study that comes out about mobile banking – but few of those (if any) focus exclusively on the opportunity to be found in serving poor, unbanked people in developing countries.
So, with our friends at the GSMA, we thought we’d share a preview of the upcoming results of the CGAP-GSMA Mobile Money Market Sizing Study, which includes:
a projection of the unbanked poor who could be reached globally by 2012;
an in-depth look at unbanked mobile money users in the Philippines today;
and a survey of more than 40 operators, vendors and other industry actors.
The aim is to help mobile operators drive initial adoption and progress towards more sophisticated offerings, such as savings and credit. Some highlights after the jump….
People working on social protection policy and financial inclusion don’t always find a lot of common ground. In fact, some would say they put out competing views of poverty alleviation: direct payments from the government to raise incomes, or increasing poor people’s access to financial services to help weather shocks and increase incomes. Of course, this is an over-simplification, and somewhat artificial. Both want the same end (poverty alleviation) and neither casts itself as the magic bullet. There’s a good 20+ years of thinking on how social protection and financial inclusion are mutually reinforcing, including somewhat famously the idea of Individual Development Accounts (IDAs) as created by Michael Sherraden.
There’s a new surge of interest, this time looking at how the impact of conditional cash transfers (CCTs) can be magnified by providing recipients with basic financial services.
I recently participated in a panel on the topic organized by The New America Foundation’s Jamie Zimmerman, who along with Yves Moury, have authored a paper on the topic. Here’s the video.
My take? If linking the poor to financial services helps them, why stop at CCTs? Let’s look at a wider world of government-to-person (G2P) payments, including other types of social welfare payments as well as wages and pensions. By CGAP’s estimate, more than 155 million of the world’s poor receive a regular payment from their government. But far less than 1/4 land in an account.
Those of us working on the financial inclusion need to line up the evidence to convince social policymakers that bolting on basic bank accounts for recipients will have benefits. And crucially, we need to boost the business case for banks to provide basic banking to poor G2P recipients on a profitable basis. One key will be deploying on more cost-effective delivery channels — such as point of sale terminals at existing merchants in the community rather than expensive bank branches.
Starting today and running through the 2009 Mobile Money Summit, we begin a podcast series with some of the voices we’re listening to this year as part of the CGAP/DFID Branchless Banking in 2020 scenarios work. The process is based on one driving question: How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020? You can participate directly through this blog, by joining our prediction market, or posting discussions through our Mobile Banking and Microfinance LinkedIn Group. –Jim
Claire Alexandre has advised Vodafone Group and its subsidiaries on regulatory issues related to mobile payment and money transfer services over the last six years. She has led Vodafone’s contributions to new EU legislation (including on electronic money, anti-money laundering, payment services) and been instrumental in shaping and representing the views of the mobile industry on these subjects. As part of the team leading Vodafone’s effort to launch mobile payment and money transfer services such as M-PESA, Claire is managing Vodafone’s input to financial services regulation to promote the adoption of enabling regulatory frameworks. Prior to joining Vodafone’s Public Policy team in 1999, she managed regulatory affairs for France Telecom in Scandinavia. I spoke with her at a recent scenarios workshop held in Capetown, South Africa.
One day each way – costing nearly US$10 total is what some Maldivians who have a bank account have to pay in order to exchange cash. The archipelago of the Maldives is about 1,600 kilometers to the south of Mumbai. I was there recently – not for a vacation but to begin work on a nationally-representative survey of the 300,000 people who live there. Working with our partners, we want to know how people use banking services: What are the usage patterns, transaction costs, levels of mobile network penetration?
This is Nomakula Dyokomba. She’s the first person in her neighborhood to use her mobile phone to buy supplies for her spaza shop (corner store). The service is provided by WIZZIT Bank. Nomakula says it’s better than cash for two reasons. First, because she no longer carries lots of cash, she is less worried about getting robbed. Secondly, Nomakula can settle her accounts using her mobile banking service, instead of closing the store for several hours and taking a bus to the next town over.
For 20 years or so Nomakula has run her small shop and tavern out of the back of her home in the South African township of Motherwell. Spaza shops are ubiquitous in South Africa, and 80 percent of spaza shop owners are women. Think of it as a low-tech version of a 7-11. Situated near the tourism and manufacturing center of Port Elizabeth, Motherwell is home to 500,000 people, most of them using cash to pay for goods and services or receive payments.
WIZZIT, one of 12 partners working with CGAP’s Technology Program, this week has begun a pilot project here to see how Nomakula and others like her could send and receive money over mobile phones instead of using cash to buy food and drinks from wholesalers. As the press release tells us, the project’s three key components use point-of-sale devices in combination with WIZZIT’s mobile phone banking platform:
A mobile banking payment service for the major wholesalers serving more than 500 microentrepreneurs (spaza shops) in the township of Motherwell, where three in five people are unbanked.
A pilot program for easy account opening and preferred pricing at Dunns outlets—a leading South African clothing retailer. If successful, this pilot program will expand to 289 stores throughout the country. To encourage sign-ups and use, customers will be given incentives to make purchases with their Maestro debit card rather than cash.
Easy account opening using a direct sales model and the South African Post Office for distribution.
Globally, there are only a few examples of successful banking services that reach poor people in remote areas. With this project, CGAP is looking to WIZZIT to demonstrate how the reach of such services can be expanded with mobile technology and local agents who handle cash.
Before she became a Vice President in the World Bank, I had the opportunity to speak with Shamshad Akhtar for a few minutes on the side of a scenarios workshop that was held in Cape Town last spring. She had recently completed her service as Governor of the State Bank of Pakistan (2006-2009), a Federal Ministerial level ranking. During this period she was also a Governor of the IMF. In 2006 and 2007 she was nominated Asia’s Best Central Bank Governor by Emerging Markets and the Banker’s Trust.
