Regulating Digital Financial Services Agents in Developing Countries to Promote Financial Inclusion
(2015) Singapore Journal of Legal Studies, 26-45
19 Pages Posted: 26 May 2017
Date Written: January 1, 2015
Limited access to bank branches excludes over one billion people from accessing financial services in developing countries. Digital financial services offered by banks and mobile money providers through agents can solve this problem without the need for complex and costly physical banking infrastructures. Delivering digital financial services through agents requires a legal framework to regulate liability. This article analyses whether vicarious liability of the principal is a more efficient regulatory approach than personal liability of the agent. Agent liability in Kenya, Fiji, and Malawi is analysed to demonstrate that vicarious liability of the principal, coupled to an explicit agreement as to agent rewards and penalties, is the more efficient regulatory approach.
Keywords: Banking, financial services, developing countries, digital financial services, liability, vicarious liability, personal liability, agent liability, Kenya, Fiji, Malawi
Suggested Citation: Suggested Citation