Bringing mobile money to the world

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Editor's Note: Michael Joseph is the World Bank Group's first fellow and was previously the CEO of Safaricom.

Mobile money has gone viral. In Kenya there are now more than 15 million mobile money users, which is equivalent to three in four adults. The company I was heading until last November, Safaricom has developed the world’s largest mobile money platform M-Pesa, which is being used by more than 14 million Kenyans. Over the last three years the growth of mobile money has been exponential. In December we reached a new threshold when the equivalent of US$ 1 billion was transferred. This is more than Western Union has transferred in all of 2010 globally! This has changed the lives of Kenyans—it created new jobs, new businesses and new opportunities for millions of people.

Surely this can and must be replicated in other similar countries, many of which have better starting conditions than we had in Kenya. We have a great opportunity as the world is becoming more focused on financial inclusion with even the G20 group of countries embracing this concept as one of its objectives for this year. The World Bank has a unique and powerful position in the financial community to achieve this goal. The Bank has the stature and the relationship at senior government levels to influence the actions of financial regulatory bodies so that suitable regulations may be drafted or amended to allow for the introduction of mobile money.

As the World Bank’s first Fellow, my mission and personal goal is to prove that Safaricom’s M-Pesa is not a one-off and that it can and must be replicated elsewhere so that the benefits it has brought to the Kenyan population can be enjoyed and experienced by other nations as well.

In order to be successful, the World Bank Group and other development partners need to be better organized. There is great fragmentation with a long list of players (World Bank, IFC, CGAP, Gates, DFID, USAID to name a few), all of which have the same or similar objectives, but with different messages and agendas when talking to Governments, Bank Regulators, Operators and Banks. Unless we change this approach, the realization of mobile money will take much longer and therefore the benefits will not be felt by the people we are targeting.

Innovation and success only happens if there is a strong management structure with clear and timely decision making. While in Washington two weeks ago we made good progress. We decided on a common strategy to focus on a selected group of core countries and established a “mobile money core team” headed by Wolfgang Fengler, the Lead Economist in Nairobi who has been working with me closely already for several months.

As a first step we will review the mobile money potential of a suggested list of 16 countries (Indonesia, Bangladesh, Cambodia, Malaysia, Pakistan, Philippines, Brazil, Mexico, Peru, Morocco, Ethiopia, Ghana, Nigeria, Rwanda, South Sudan and Senegal as entry point to WAEMU). The analysis will look at key factors for the implementation of mobile money such as bank and mobile penetration, population disbursement and density, geographic size and physical difficulty, population size, Government subsidies and/or social payments, relationship with the respective Governments by the interested parties, etc. In mid-May we’ll then make a decision on the top five or six countries to be selected for immediate action and these countries would be our initial targets starting July. In the meantime, it would be great to hear from readers in the comments section about which of the 16 countries have the best potential for a large-scale system of mobile money.

The World Bank’s mission is to fight poverty. Mobile money can be a game changer for the poor. I am excited to be part of this agenda and look forward to working with the World Bank to help bring the benefits of mobile money to many parts of the world.


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