Financial Inclusion- News and Views - November 2013
The RBI has announced a pilot that will go live by end-March 2014 to study the technological and operational feasibility of allowing cash pay-out from non-bank issued PPIs. This ushers in a new phase in the financial inclusion mission in India, where non-banks are being given a larger role. There are many aspects to look into while opening up this space to non-banks and this month’s lead stories focus on the growing trend towards mobile money worldwide: a) a reference guide by GSMA for telcos on defining efficient Key Performance Indicators to ensure sustainable commercial growth with the objective of inclusion, b) the preliminary results of GSMA’s 2013 Mobile Money Adoption Survey show that adoption of mobile money services by customers is rising and an increasing number of services are attaining scale, and c) Michelle Kaffenberger’s blog post on mobile money for small businesses that analyses data from four countries to show that commercial opportunities for mobile money exist in all these four markets, each country has a different market profile and sustained efforts can help small businesses make the transition away from cash-based transactions.
This insightful reference guide by GSMA focuses on a very important tool that MNOs use to link their strategic objectives with daily activities and operations – Key Performance Indicators (KPIs). It provides guidelines to appropriately define KPIs, helps in identifying pitfalls while creating them and through examples helps in illustrating fundamental elements for effective KPIs. Since misguided or vague KPIs can lead to inactive agents, inactive customers and a team lacking in accountability and motivation, it is important to keep these aspects in mind to achieve the objective of inclusion.
According to the findings of this survey, mobile and mobile network operators are playing a very vital role in promoting the adoption of convenient and affordable financial services among the financially excluded across the globe. There are 208 live services in 89 countries and at least 9 have crossed the mark of a million active users. Another interesting finding is that mobile money is now steadily being recognised as the mainstream business proposition for MNOs.
This post by Michelle Kaffenberger looks at studies conducted in Tanzania, Uganda, Democratic Republic of Congo and Pakistan on the usage of mobile money for small businesses. Kaffenberger observes that mobile money not only enables streamlining of business payments to suppliers, employees and customer transactions but saves time and also proves to be a safer and more secure option for transactions compared to cash. Each country has a different market profile: in the advanced markets of Tanzania and Uganda small businesses report high usage of mobile money services, in Pakistan small businesses may hold the key to change in a market currently dominated by OTC transactions, while in the nascent market of DRC small businesses show reticence to use these services still.
Section I: Policy – the latest from India’s policymakers
The Indicus Centre for Financial Inclusion was launched in 2011 to distil and disseminate information on accelerating the poor’s access to high-quality financial services. The Centre is supported by the Bill & Melinda Gates Foundation. http://www.indicus.net/icfi