Page 10 - State-of-the-Industry-2013

State OF the induStry 2013

IntRoDUctIon

about MMU State of the industry report

access to fnancial services can help low-income households manage day-to-day risks and provide a safety net to insulate them from
fnancial shocks (e.g. a death in the family, illness, job loss, or natural disasters). however, an estimated 2.5 billion people in lower and
middle-income countries are unbanked. the traditional bricks-and-mortar model adopted by most banking and payments provid-
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ers struggles to serve the poor, and these people are forced to rely instead on informal fnancial services that are usually unsafe,
inconvenient, and expensive.

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however, among the unbanked population, more than 1 billion people have access to a mobile phone . the mobile channel can be utilised
to provide access to fnancial services such as payments, transfers, insurance, savings, and credit, in ways that are more cost-efcient,
safe and convenient than existing alternatives. in many developing countries, mobile network operators (mnOs) have unique assets and
incentives to deliver these services in a sustainable and scalable way: trusted brands, widespread distribution, and secure channel access.

the availability of data on mobile fnancial services is also critical to allow providers of mobile fnancial services make informed decisions
and investments in this area.

Table 1
Definitions of mobile financial services

Mobile Money Mobile inSuranCe Mobile Credit and SavingS

Mobile money uses the mobile phone to transfer Mobile insurance uses the mobile phone Mobile credit and savings use the mobile phone
money and make payments to the underserved. to provide microinsurance services to the to provide credit and/or savings services to the
underserved. underserved.
MMU tracks mobile money services that meet the
following criteria: MMU tracks mobile insurance services that meet MMU tracks mobile credit and savings services
the following criteria: that meet the following criteria:
• the service must ofer at least one of the
following services: P2P transfer, bill payment, • the service must allow subscribers to manage • The service allows subscribers to save money
bulk payment, merchant payment, and risks by providing a guarantee of compensation in an account that provides principal security,
international remittance. for specifed loss, damage, illness, or death. and in some cases an interest rate, and/or
allows subscribers to borrow a certain amount
• the service must rely heavily on a network of • the service must allow underserved people of money that they agree to repay within a
transactional points outside bank branches to access insurance services easily using a specifed period of time.
that make the service accessible to unbanked mobile device. Services that ofer the mobile
and underbanked people. Customers must be phone as just another channel for the clients of • The service must allow underserved people to
able to use the service without having been an insurance company to access a traditional save money and/or to apply for credit and repay
previously banked. Services that ofer the insurance product are not included. it more easily using a mobile device. Services that
mobile phone as just another channel to access • the service must be available even to ofer the mobile phone as just another channel to
a traditional banking product are not included. access a traditional savings account and/or credit
customers with basic mobile devices.
• the service must ofer an interface for initiating product are not included.
transactions for agents and/or customers that • The service must be available even to customers
is available on basic mobile devices. with basic mobile devices.

1. jake Kendall, nataliya mylenko and alejandro Ponce, “measuring Financial access around the World” (june 2010), Policy research Working Paper 5253, the World Bank. available at
http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-5253
2. CGaP, GSma, and mcKinsey & Company “mobile money market Sizing Study” (2010).
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