Abstract
the unbanked and underbanked. Much of this interest is thanks to the dramatic rise in the number of mobile phone subscribers in emerging economies, which now exceed the number of bank accounts in most countries. Increased numbers of subscribers, combined with the early success of mobile money in countries like Kenya, are driving interest in mobile money and mobile financial services (MFS) to expand the outreach of financial services. Though the excitement and interest in this sector continues, the past year has seen a shift to a broader use of technology to reach the unbanked. This new area of interest, now referred more broadly as digital financial services (DFS), takes a more comprehensive view of supporting financial inclusion by involving a much broader range of institutions. Among the institutions that have provided and helped shape the new emphasis on DFS to support financial inclusion are the Bill & Melinda Gates Foundation and a wide range of publicand private-sector members in the Better Than Cash Alliance, which focuses on using electronic funds transfers as well as mobile money to speed the shift to DFS. In this paper, I focus on this broader approach to improving financial inclusion via DFS and share lessons learned from a practitioner in the field point of view.
Highlights
When offering DFS, it is important to plan the offering carefully by developing a road map
Do people in the target market own mobile phones, and if so, what types? What do people use their phones for? Texting, calls, MMS, data? What does DFS offer to customers? What would customers really need and use DFS for? Could customers afford the solution being proposed? How does it compare to other options they currently use to make payments, send and receive money, or even buy and sell goods and services? are these services easy to use and user-friendly, given the level of technology literacy among those in the target market?
In our early experiences in the Philippines, we found that most clients were quite comfortable using a mobile phone and texting messaging was quite common
Summary
Offering Digital Financial Services to Promote Financial Inclusion: Lessons We’ve Learned. Though the excitement and interest in this sector continues, the past year has seen a shift to a broader use of technology to reach the unbanked This new area of interest, referred more broadly as digital financial services (DFS), takes a more comprehensive view of supporting financial inclusion by involving a much broader range of institutions. He was the former head of the USAID-supported Microenterprise Access to Banking Services project, which was the first to use mobile money (in 2004) to provide greater access to banking services in the Philippines He has provided training and guidance to mobile money providers, banks, and regulators from Latin America, the Caribbean, the Middle East, Africa, Asia, and the Pacific Islands.
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