inclusion plays an essential role in driving
progress and sustainable development, yet 45%
of the world’s population does not have a bank account. Digital financial
services could not only financially ‘include’ many underserved households, but
they could also help fight corruption and fraud.
sub-Saharan Africa, the fact that more people have a mobile phone than a bank
account could provide the answer to financial exclusion. With estimates that
the number of mobile phones in Africa will rise to 930 million by 20191, the technology revolution
promises to accelerate growth significantly for the continent.
the distance between towns is vast, and the rise of mobile technology could
allow the expansion of financial services in a cheap and accessible way. With
coordinated action by financial firms, telecommunication companies and
governments in low-income countries, around 1.6 billion could gain access to
financial services by 2025, according to a McKinsey
Mobile money as a driver
than 40% of the adult population in countries such as Kenya, Tanzania,
Zimbabwe, Ghana, Uganda, Gabon and Namibia use mobile money as part of everyday
life. A study found that, by enabling people to store and transact money in a
digital form, hundreds of millions of underserved people are safer, more
productive with their time and money, and able to take advantage of more
it comes to energy access, the pay-as-you-go (PAYG) system is considered a key
driver of growth for scalable off-grid energy providers, and could lead to a
virtuous cycle of financial inclusion via accessible household services.
such as D2D
Pro and d.light
are examples of how PAYG solar systems are integrated with mobile money, so that
base-of-the-pyramid consumers can gain access to clean, affordable energy.
The M-Pesa effect on
Kenya, the state of financial inclusion is markedly superior to the continental
average, an achievement attributed to the promotion of mobile banking3. Today, the African
country has become the global leader in the provision of financial services via
biggest shift occurred in 2007, when Safaricom launched the money transfer
service M-Pesa. Initially, it
allowed users to send and receive money via SMS message, but other services
were added later, such as access to savings and credit. While it is present in
10 countries, the service is extremely popular in Kenya, where it is used by at
least one person in 96% of households4.
areas where M-Pesa expanded more, the number of lowest-income households
dropped, driven primarily by female-headed
households. It is also argued that M-Pesa significantly reduces the
potential of street robbery, burglary and petty corruption within cash-based
Mobile technology to
underserved markets, mobile technology is being used to empower those living in
remote areas, but it also allows greater transparency in countries where levels
of corruption are high. For example, applications such as the World
Bank Integrity App give users the opportunity to report on concerns of
fraud and corruption anonymously.
governments used a digital system to pay pensions, salaries and welfare
benefits, it would reduce opportunities for corruption. In addition, 400
million people could be included in the financial system if governments and
businesses made their payments digitally rather than in cash. On the other
hand, the transparency of mobile banking could also help government agencies
tackle money laundering.
inclusion is a catalyst for sustainable progress. Although it is not a stand-alone
goal, it serves as a driver towards achieving a number of Sustainable
Development Goals (SDGs), with which TRANSFORM is aligned.