Assessing the Economic Inclusion Potential of Mobile Financial Services

This paper studies how mobile financial services (MFS) can increase financial inclusion among the unbanked and the underbanked. It presents an analytical framework that considers the ability of MFS to draw consumers into the banking system, retain them in safe and sustainable account relationships, deepen banking relationships, and fulfill financial goals. The paper covers the following sections in detail:

• Description of the unbanked and underbanked and the various challenges involved in economic inclusion of these sections;
• Definition of MFS and why these services can meet the challenge involved in economic inclusion of the unbanked and the underbanked;
• Evaluation of the effectiveness of active MFS in economic inclusion through a framework based on access, sustainability, and growth of these services;
• Provision of a number of ideas to help bring economic inclusion objectives to the forefront as MFS tools continue to be developed and implemented.

The paper states that a key finding of this research is that in the short run, MFS is best positioned to have an economic inclusion impact through its ability to meet day-to-day financial services. This is primarily because they impart the ability to conduct banking transactions or make financial decisions anyplace and anytime.