Mobile financial services have become an important driver of financial inclusion in a growing number of countries. They are bringing finance to the ‘unbanked’, who have hitherto not had access to formal financial services – whether because they had no bank branches in their areas or services were just too expensive. Starting with mobile money wallets, used for transfers among subscribers, such services then developed to payment services, enabling bill payments by consumers to electricity, water and other utilities, schools and merchants. Innovation is enabling people not merely to store and transfer money, but even to borrow it – despite having no credit history.
Mobile financial services typically either ignite and grow rapidly, or don’t grow much at all. In addition to the degree of financial exclusion, the rapid uptake of such services depends on the deployment of an agent network to allow customers to cash-in and cash-out. Just as important, however, are the regulatory barriers to entry and growth, nd once in full throttle, just as important to continued innovation and growth is competition. This working paper explores the issues or growth, uptake and financial inclusion.