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> Posted by Center Staff
Blog posts. Twitter feeds. Facebook updates. Email listservs. Google Alerts. Lunchtime conversations… We all have our ways, however handy and effective, of trying to stay abreast of what’s happening around the world. For those interested in financial inclusion, this is quite the challenge. The release of new products, partnerships, publications, and policies is a constant. But at CFI’s Financial Inclusion 2020 (FI2020) project, combing the world for the latest inclusion insights, trends, and developments is part of what we do. So, we decided to go one step further.
Starting today, each week the FI2020 team will bring you the big news in financial inclusion in an online magazine, the Financial Inclusion 2020 News Feed. We’ll pull from all over to spotlight great new stories, initiatives, videos, podcasts, and more. To give you a sense, the collection of pieces that make up this week’s edition touch on:
- JPMorgan Chase & Co.’s new report on U.S. households’ financial resilience, Weathering Volatility
- AllAfrica’s recent article on the new partnership between Tigo and Juntos in Tanzania
- The Guardian’s interactive post that visualizes borrowing trends globally
- A World Bank video on assessing if microloans really make a difference
To check out the first edition, click here, and make sure to subscribe so you can be notified when the latest issue comes out.
Have you come across a story or initiative you think we should cover? Email your ideas to us at .
> Posted by Jeffrey Riecke, Communications Associate, CFI
Coinciding with this week’s Mobile World Congress in Barcelona, GSMA’s Mobile Money for the Unbanked (MMU) program released its fourth annual ‘State of the Industry Report on Mobile Financial Services.’ I talked with Jennifer Frydrych, Insights Coordinator for the MMU program and one of the authors on the report, about the project’s findings. The conversation touched on new markets, shifts in the mobile payments mix, successes with products beyond payments, the main hurdles facing mobile money ecosystems, and more.
1. The mobile money industry has grown rapidly in recent years. Can you bring us up to date with some of the growth figures and dynamics?
In the past five years, mobile money services have spread across much of Africa, Asia, Latin America, and the Middle East. At the end of 2014, there were 255 live mobile money services across 89 markets, 36 more than in 2013. Mobile money is now available in 61 percent of developing markets globally. In terms of adoption and usage growth, 75 million additional mobile money accounts were opened globally in 2014, bringing the total number of registered accounts to 299 million. Importantly, account activity increased faster than account registration in 2014, and the total number of active mobile money accounts is now 103 million (up from 73 million in 2013). An increasing number of services are reaching scale: 21 services now have more than one million active accounts.
2. As of the last State of the Industry report, half of all live mobile money deployments were in sub-Saharan Africa. How has this distribution changed? What were some new or emerging markets of the past year?
There were 22 new services launches in 2014, of which half occurred in sub-Saharan Africa. The mobile money industry in sub-Saharan Africa continues to grow, and the region still accounts for just over half of all live services globally, and 60 percent of all active accounts. Much of this success can be attributed to East Africa; however we are now seeing exciting growth in mobile money uptake and active usage in West Africa.
> Posted by Center Staff
On Wednesday, a new joint-initiative was launched that puts free financial education lessons into the phones of Tigo’s seven million mobile subscribers in Colombia. The service, Su Dinero (Your Money), features online financial education content from Microfinance Opportunities (MFO) tailored to the local Colombian context. Supported by project partners DAI and Souktel, the financial education platform is housed on Facebook’s Internet.org phone application. Though web-based, the app can be accessed by Tigo’s mobile subscribers without cost or data charges due to the businesses’ unique arrangement, aligned with Internet.org’s social mission: extending affordable internet access to the five billion people around the world who don’t have it.
Less than a third of the global population use internet-based financial or commercial services. By and large this isn’t a reflection of a lack of connectivity, as mobile phone reception now covers about 85 percent of the inhabited world, although smart phones penetration is far lower. Internet.org, founded by Facebook in 2013, is out to make internet access 100-times more affordable and increase uptake worldwide by targeting the following barriers: cost of devices; cost of service plans; lack of content in local languages; limited availability of power sources; difficulty in networks supporting large amounts of data; lack of awareness of the value of the internet; and remaining gaps in mobile network connectivity.
> Posted by Monica Brand Engel and Jackson Scher, Managing Director and Program Coordinator, Frontier Investments Group, Accion
#166896430 / gettyimages.com
Innovative payment solutions are proliferating globally. Enabled by the exponential expansion of mobile phones, social media, “big data”, and internet access, financial players throughout the world are inventing new ways to complete transactions. Disruptive innovations such as prepaid options, NFC-enabled payments, and cryptocurrencies are gaining significant adoption and are changing the payments space. These trends are especially pronounced in emerging markets where many new entrants have chosen to “leapfrog” traditional, resource-intensive systems and dive directly into the seamless and nimble world of digital financial services. Although these exciting innovations in digital payments have the potential to increase convenience for customers and dramatically reduce costs, some challenges remain. Read the rest of this entry »
> Posted by Juan Blanco, Associate, Financial Inclusion 2020, CFI
#452959988 / gettyimages.com
In 2012, developed countries spent 8.6 percent of GDP on insurance, while developing countries spent only 2.7 percent. Traditional insurance providers face difficulties when serving low-income and unbanked customers with traditional insurance products in areas like transaction size, client education, and outreach, among others. However, mobile technologies have disrupted the way insurance is delivered and in the last two years a new array of mobile microinsurance services have popped up. Earlier this year CGAP identified 74 operators with live mobile microinsurance services, making up an increasingly diverse space that is active in more countries, offering a wider range of products, and using different business models.
Two of these services stand out, given their success, both with leading mobile network operators (MNOs). Tigo Kiiray in Senegal enrolled 13 percent of Tigo’s 3 million subscriber base during its first year and a half of its launch. Talkshawk Mohafiz by Telenor Pakistan managed to issue 400,000 insurance policies within its first two months of operations. What have these models done to gain access to this historically difficult market segment?
> Posted by Brigit Helms, Director, Support Program for Enterprise and Economic Development (SPEED)
It’s hard to imagine a more explosive, transformative, and empowering trend than the growth of the mobile phone sector in Africa. In 1998 there were fewer than 4 million phones on the continent; today there are around 800 million—a whopping 80 percent penetration. Compare this to the meager 24 percent of African adults with bank accounts. Experts expect there will be around 1.1 billion mobile phone subscribers by 2017.
Women likely will be at the forefront of this future growth in mobile access in Africa (and elsewhere), globally accounting for two-thirds of new subscribers. According to the Cherie Blair Foundation, the gender gap in Africa alone is a $2 billion business opportunity.
At the same time, the potential for mobile money is indeed dazzling. The Kenya example continues to dazzle us, with 21 million active users, more than 60,000 agents (many of whom are women), and mobile money deposits of KSh 226 billion, surpassing the deposit base of the country’s largest commercial bank, Kenya Commercial Bank.
With all this promise, the potential is unrealized outside of a few countries. Why? The answer is complex, but fundamentally it’s because mobile money operators systematically underinvest in two things: understanding the market and building the agent network.
As it turns out, both of these things are critical for connecting women with mobile financial services. Once we crack the problem of women’s access to financial services, their households and communities will follow shortly thereafter.
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