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Mobile money continues to play a vital role in financial inclusion
8 August 2022Globally, around 1.7 billion people still lack access to to safe, reliable and convenient financial services. However, 31 emerging markets have seen an impressive increase in financial inclusion rates, which -according to a recent report from GSMA– can be attributed to simultaneous growth in active mobile money use.
In fact, in almost half these markets, growth in active mobile money use exceeded eight percentage points, and a third of the 31 countries analyzed at the survey of GSMA were in either Asia or Latin America, demonstrating that the impact of mobile money on financial inclusion has extended beyond Sub-Saharan Africa.
The report notes the significance of the regulatory framework as it found that “countries where mobile money’s contribution to the overall growth of financial accounts is not as significant tend to have a lower than average regulatory index score”. As a result, this “highlights the importance of establishing a more level regulatory playing field which allows for innovative market-led solutions to increase financial inclusion”. It’s crucial for providers and regulators to work together if they want to achieve the mutual aim of expanding mobile money services.
Mobile money as a gateway to transformative services
For populations traditionally excluded from the formal financial system a mobile money account provides a gateway to services of fundamental importance. Through the spread of such accounts, the rural poor, displaced persons and women can have access to services including healthcare, education, financial services, employment and social protections. Services that can transform their lives, services that are bringing more people online than ever before
The report notes that rural market penetration and the digitization of agricultural value chains is a priority for a growing number of mobile money subscribers as over 50{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}of survey respondents reported having a product specifically targeted to rural customers or plan to launch one in 2019.
On the other hand, humanitarian organizations are turning to digital financial services to replace in-kind aid with direct cash transfers for the forcibly displaced persons. In 2018 over 135 million people required humanitarian assistance and protection. Lastly, the survey from GSMA shows that that providers are leveraging their core assets to address the persistent gender gap in mobile ownership and use.
In 2018, following many years of incredible growth, the mobile money industry is still getting the fundamentals right, reaching customers who have traditionally been underserved by the financial system. Large MNO groups, fintech companies and tech giants have developed (together with their partners) a range of customer-centric use cases, creating a diversified landscape.
