Reflections on Mobile Money

Jake Kendall, a program officer in the Financial Services for the Poor initiative at the Bill and Melinda Gates Foundation keeps his attention on innovations in financial inclusion.  

A year or two ago, had you polled the financial inclusion field and asked whether they thought that a person to person money transfer service (like M-PESA) would have a significant welfare benefit for poor households, on par with credit, savings or insurance, the majority would have said “no"....

If you asked the same question today, many whom I have spoken to would now say that improving the poor’s access to money transfer is impactful, and might even be as impactful as many of the existing savings, credit, and insurance options available from the microfinance sector.  (read the whole post).

He's thinking about how innovation happens, too:

Networks are powerful tools. In the past, the emergence of canals, railroads, electricity, telecommunications and the Internet provided new ways of moving people, goods, energy or information, with transformational effects on business models and the economy. One of the more powerful aspects of networks is that they often form platforms that catalyze interactions between parties that might never have come together otherwise, sometimes creating new markets in the process (read the whole post).

Kendall and his coauther conclude that 1) it is only a matter of time before many if not most poor households are using the platform to access financial services, and 2) that significant challenges remain to increasing the number and variety of services available over the mobile money platform, and in particular to connecting to the poor.

After all, as he puts it elsewhere, "Poor people’s need for domestic payments is often large, whether it is spurred by migrant labor remittances, informal support networks of friends and family, government welfare payments, or utility payments" (read the whole post). 

Recently, Kendall has been writing about new ways  to track financial access, using information about geographic distribution of bank branches, ATMs, CICO agents, and other financial access points relative to the spatial distribution of population.  The maps that they can make with this new method are really something (read the whole post).

Keep your eye on Kendall and associates to learn about new trends in the world of financial inclusion and check out this talk he gave on  payment behavior and innovative opportunities in Sub-Saharan Africa (watch the talk).