DESPITE regulatory challenges and the financial crisis, policymakers are embracing mobile banking as a means of providing financial access to the unbanked poor. More than a billion people worldwide lack bank accounts, but do have mobile phones, providing a dramatic opportunity to achieve greater financial inclusion, according to Mike Foster, UK minister for international development at officials meeting in London recently.
Mobile banking services, he said, offer millions of poor people a route out of poverty by helping them to improve their incomes and pay for healthcare and education. It is vital that policymakers ensure that the needs of the poor are central as they develop regulation for this innovative and emerging sector, he added
To promote effective regulation of mobile banking, CGAP, DFID, and the Alliance for Financial Inclusion (AFI) have organized the second Global Leadership Seminar for high-level policymakers and regulators who set policy for branchless banking, including mobile banking.
According to Elizabeth Littlefield, ceo of CGAP, “Mobile banking holds great potential, and CGAP is encouraged to see that governments everywhere are being deliberate and thoughtful as they merge the domains of finance, payments, and telecom to create a framework that balances customer needs with concerns around security and prudential regulation.”
Seminar participants represent countries where branchless banking is growing quickly, or is poised to do so soon. These countries are Argentina, Bangladesh, Brazil, Colombia, Egypt, India, Kenya, Maldives, Mexico, Pakistan, Peru, the Philippines, Russia, Rwanda, Sri Lanka, South Africa, Tanzania, and Zambia. Mobile banking is a triangle, with customers and providers joined by local merchants that act as the crucial interface between poor people’s electronic value on their phone and the cash economy in which they live.