Syndicate content

mobile money

In Uganda, greater financial inclusion is the key to unlocking rapid growth

Rachel K. Sebudde's picture
Photo: Sarah Farhat/World Bank.

Ugandan’s access to financial services has improved dramatically in recent years. More than half of Uganda’s adult population now has access to an account at a formal financial institution. This is almost twice as many as in 2009. The entry and fast penetration of mobile money is the main reason for the increase, having allowed 8 million Ugandans to conduct financial transactions.

L’accès universel aux services financiers d’ici 2020 ? L’Afrique subsaharienne, un exemple à suivre

Irina Asktrakhan's picture
Also available in: English

La Banque mondiale se fixe un objectif ambitieux : garantir l’accès universel aux services financiers formels d’ici 2020. Même si 700 millions de personnes disposent d’un compte bancaire depuis 2011, environ deux milliards ne sont toujours pas bancarisées (a). À l’heure où la Banque mondiale cherche à développer l’inclusion financière dans le monde entier, elle devrait prendre exemple sur l’Afrique subsaharienne.

Universal financial access by 2020? Look to Africa for inspiration

Irina Asktrakhan's picture
Also available in: Français

The World Bank (WB) has set an ambitious goal of securing universal access to formal financial services by 2020. Although 700 million people have signed up for a bank account since 2011, about two billion worldwide remain unbanked. As the WB seeks to expand worldwide financial inclusion, it should look to Sub-Saharan Africa (SSA) for inspiration.

Can mobile phones be used to "bank" the poor?

Gabriel Demombynes's picture

The phenomenal success of Kenya’s M-PESA system, which allows people to store and transfer funds via electronic accounts that they access via mobile phones, has raised hopes that mobile money may provide a way for the poor to access basic banking services. In an earlier post, I presented findings from my recent working paper with Aaron Thegeya, showing that a remarkable 73% of Kenyan adults use mobile money, and nearly a quarter use it every day

We also show that savings with a simple M-PESA account is common, with 2/3 of M-PESA users reporting that they save in some form with M-PESA. We see some mild evidence that M-PESA may increase savings: controlling for various characteristics, those who are registered for M-PESA are 32 percent more likely to report some savings activity.

Why do people save with M-PESA when it doesn’t pay interest?  A possible explanation comes from an experimental study on health savings (not involving M-PESA).  

Is mobile technology over-hyped?

Gabriel Demombynes's picture

At an event at the New America Foundation in DC  and in a recent article in Slate, Sascha Meinrath and Jamie Zimmerman argue that mobile technology in general and mobile money in particular have been overhyped as game-changing tools for the poor.

They claim that mobile technology “creates a greater economic divide” and that Kenya’s M-PESA mobile money system is “leaving a substantial portion of the nation’s poor in even more dire straits.”

Tavneet Suri and Billy Jack and separately Kevin Donovan have already beaten me to the counterpunch with cogent rebuttals. Here’s my own two cents: