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08.21.2013

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Mobile banking: between continued growth and operational barriers

Despite continued growth of the mobile money industry in the world, we will see that, however, there remain significant obstacles to its sustained growth and to the value it brings to the poor and unbanked.

For banks and microfinance institutions, rely on the mobile telephony is an opportunity to reduce the costs of operations or to implement a scalable low cost structure.

This is the kind of new banking system that sought to develop Banko, one of the main microfinance actors in the Philippines in 2012 by inserting itself in the market for retail microfinance using the mobile phone as the primary channel.
This initiative has emerged a new bank of microfinance which allowed customers to pay, save, use credit services and insurance products directly by their mobile phone.

However, this new business model is exceptional in the world of microfinance as most microfinance institutions (MFIs) must take into account their own legal, regulatory and operational framework to find the best way to take advantage of mobile banking. Indeed, the m-banking affects the heart business of MFIs and their way of serving customers, as well as new business models emerge gradually.

  • Back to the latest figures from mobile banking:
  • According to a study conducted in 2012, there are currently 150 live mobile money deployments in 72 countries, including 41 deployments launched just last year.
    These 82 million registered customers worldwide, including 30 million active accounts, mobilize 520,000 loan officers specialize in m-banking to complete transactions.

    These figures show a continued growth of the industry of mobile money; however we must not forget that it is subject to obstacles that should not be overlooked.
    Indeed, the good network management of loan officers is difficult in some areas, customers do not always have strong enough credit records to use mobile banking and some may face unexpected costs in managing their liquidity.
    On the other hand, many micro-entrepreneurs who use this service are currently inactive due to an occasional or stopped activity.
    At the moment, only six suppliers of mobile money in the world have managed to accumulate more than 1 million active customers.

    Sources : Cgap

    Tags : mobile banking, microfinance, microfinance institutions, microworld, m-banking, mobile phone, mobile telephony

    This article is part of the special report: