The Next Challenge: Channeling Savings Through Mobile Money Schemes

Abstract:     
Poor people need safer, more affordable and convenient ways of managing what little money they have. While many financial institutions have discovered that poor people make good borrowers, fewer have figured out how to provide savings to poor clients. Savings is simply a harder product to deliver: unlike credit, poor people are not willing to pay a lot of money or travel long distances to put small amounts into an account. And banks have struggled to find cost effective models to expand their physical reach into poor and rural areas and to handle large volumes of low-value cash transactions. Mobile money networks have potential to deliver the required level of proximity and low transaction costs, but they are not equipped to offer the broad range of financial services that poor people want and need. In this paper, we examine how banks and informal savings groups can leverage mobile money schemes to deliver structured financial services to large numbers of unbanked households.

Number of Pages in PDF File: 9

Keywords: Savings, mobile money, mobile banking, mobile payments, branchless banking, financial inclusion, microfinance, access to finance

Accepted Paper Series