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Today the Microcredit Summit Campaign released a report on the challenges faced by practitioners seeking to launch new mobile banking platforms. The report focuses on how mobile banking, or m-banking, can reach clients further down the poverty scale or who live in remote and hard-to-reach area; m-banking can also make it easier for the very poor to participate in the digital economy. Mobile banking enables Microcredit Summit Campaign members to close in on Goal Two, helping 100 million families lift themselves out of extreme poverty, by providing the means for the poorest and most vulnerable to become financially empowered.
The Microcredit Summit Campaign conducted research in partnership with Microfinance Opportunities to develop this report on mobile banking, or m-banking, and how it be more effective in reaching clients. Microfinance Opportunities is a global non-profit working towards understanding the financial realities of low-income households. Microfinance Opportunities works with financial service providers, policymakers, telcos’ SIM card providers, mobile money operators, and other organizations that connect product and service offerings to the realities of those living in poverty.
Mobile banking is one of the most promising tools in reaching digital financial inclusion at a large scale. Mobile phone usage has grown exponentially since people around the world have found that it is an affordable and effective tool for communication, security, and entertainment. Now, previously unreachable clients can make digital payments via their mobile phones. Making payments digitally is less costly, more effective, and more convenient than other forms of payment. However, there are still many issues that MFIs face trying to implement the use of mobile banking. This report aims to provide solutions to these issues.
- Mobile banking is an effective tool in allowing an MFI to achieve its social goals in reaching those living in extreme poverty.
- Mobile banking also allows savings that help reduce cost barriers that poorer clients face.
- Mobile banking can help overcome both distance barriers and social restrictions to accessing services.
- To implement mobile banking, one must focus on the infrastructure available (e.g., access to phones and a reliable network), the clients’ capabilities, and cost to the institution and client.
- There must be a sense of trust between a client and the MFI.
Learn more about mobile banking how it can benefit your financial institution
- Read the report: Challenges in Mobile Banking: Early findings from the field
- Learn more about the 100 Million Project