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Sub-Saharan Africa

Mobile Banking: IFC study examines key factors for success

Mobile BankingA new study by IFC and The MasterCard Foundation examines what factors determine the successful formation of partnerships between market actors in the mobile financial services industry, a crucial aspect in the effective roll-out of low-cost mobile financial services to increase access to finance in underserved markets.

Following the success of mobile banking with M-Pesa in Kenya, mobile financial services is increasingly seen as a very promising solution for rapidly increasing access to finance for low-come individuals and small businesses in Sub-Saharan Africa and elsewhere. The combination of high mobile phone penetration and low rates of access to finance appears to be an obvious opportunity to explore for providers of low-cost mass-market financial services.

M-Pesa’s success has proved difficult to replicate though. One crucial factor in the effective roll-out of mobile financial services is the successful formation of partnerships between financial institutions, mobile network operators, payment providers and agent managers in a structurally complex service delivery channel. Ultimately the success of these commercial partnerships is key to unlocking the great potential of mobile financial services.

Drawing on case studies from Cambodia, Ghana, Kenya and Pakistan, Partnerships in Mobile Financial Services: Factors for Success finds that the quality and impact of such industry partnerships generally depend on the successful definition of partner roles in alignment with competitive advantage and motivation, a long-term view of the division of revenue and cost between partners, and an accommodating regulatory environment.

“Everyone would like to see M-Pesa’s success replicated everywhere, but it has proved to be not so easy,” said Greta Bull, co-author and IFC Program Manager, Micro-Retail Sub-Saharan Africa. “Our study gives insight into some of the most important factors at play, and is relevant to any market actor entering the rapidly evolving mobile financial services field,” she added.

Ann Miles, Director of Financial Inclusion at The MasterCard Foundation, said, “This paper is very clear and realistic about what new technologies and new types of providers have achieved thus far in bringing financial services to the poor.” “It also poses a challenge to all of us who work in the sector, to ensure that our work is in service of what people really need,” she added.

The study is published by the Partnership for Financial Inclusion, a $37.4 million initiative by IFC and The MasterCard Foundation, also joined by the Development Bank of Austria, that aims to bring formal financial services to 5.3 million previously unbanked people in Sub-Saharan Africa by 2017. The study also benefited from input by CGAP, the Consultative Group to Assist the Poor.

For a free download of the full report, click here, or contact Anna Koblanck,

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