Driving Financial Inclusion Initiatives Using Mobile Technologies

This paper explores the possibility of using technology specific policy and regulation to drive financial inclusion initiatives. It discusses how access to money and access to banking affect socio-economic parameters and provides an analysis of the levels of financial exclusion in developing and underdeveloped economies. The paper looks into the various causes of financial exclusion including individual factors, environmental, market, and societal factors, behavioral factors, and supply side factors. It also evaluates the role policy and governance can play in furthering financial inclusion and how the costs of providing financial services can be reduced by leveraging mobile banking and technology. According to the paper, some of the benefits of using mobile payments include:

• It can help in reducing the cost of deploying customer touch points into lower income or more remotely located population segments;
• It can enable customers to transact remotely without having to physically access a service point;
• It brings about a drastic reduction in transaction costs that credits can now be made available to the poor and rural dwellers who can easily afford the reduced costs;
• It can eliminate the dominant cash culture with its risks and costs and accelerates the transition to a cashless society.