Mobiles for Development: M-Banking

Abstract

The adoption of mobile phones by the poor has been an unexpected phenomenon that is having a remarkable impact on social and economic development. The significance of mobile adoption is now beginning to be understood by scholars and policy makers; the emergence of m-banking/m-payments systems has implications for the more general set of discussions around the role of mobile telephony in the developing world. This paper offers a survey of recent literature on access gaps that focuses on pro-poor market solutions provided by mobile applications. The emerging literature on mobile uses in developing countries has focused on the benefits of voice and text messaging. However, there is little academic research on mobile applications such as m-banking. While a large number of low income people have access to mobile phones; these groups are excluded from the financial market. M-banking offers the opportunity to diminish this financial exclusion by offering access to credit and to savings which are key tools capable of transforming the livelihoods of the poor and the efficiency of the market. Accessibility is the major barrier for the expansion of mobile adoption by the poor. There is an important role for regulators to play in enabling an appropriate environment for the increase in the mobile penetration as well as business models for m-banking.