Beyond Payments: Next Generation Mobile Banking for the Masses
This paper explores the potential of mobile technology in providing low-income consumers with access to a wide range of financial products that go beyond simple mobile payments.
The paper looks at distribution strategies and second generation mobile microfinance products through pilots in West Africa and South-East Asia. It examines two distinct and innovative models, namely, the distribution of microfinance through mobile money through existing microfinance banks, and the distribution of microfinance through a virtual microfinance bank, operating as a pure mobile player.
The report discusses lessons across different aspect of mobile microfinance such as marketing, sales and distribution as well as credit risk management. It states that mobile microfinance:
- Can have a significant impact on increasing financial services access for unbanked subscribers by eliminating the disadvantages of physical bank branches;
- Is a cost-effective way for banks and MFIs to reach the masses by capitalizing on the widespread penetration of telecom distribution networks;
- Will see a new breed of intermediaries emerging that will allow partners on both sides to interact smoothly by playing the interconnection role, making money on transactions rather than the spread.
