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The Mobile Financial Services Development Report 2011 assesses the development of the mobile financial services (MFS) ecosystem in twenty countries. Its purpose is to provide a tool for decision makers to identify relative areas of strength and weakness and to prioritize opportunities for collaborative action to build scale in mobile financial services. The Report defines mobile financial services development in terms of the key drivers across the institutional, market and end-user environments that lead to adoption and scale. Measures of mobile financial services development are captured across seven pillars:

1. Regulatory proportionality

2. Consumer protection

3. Market competitiveness

4. Market catalysts

5. End-user empowerment and access

6. Distribution and agent network

7. Adoption and availability

The Report thus takes a comprehensive view in assessing the factors that contribute to the long-term development of mobile financial services. It includes mobile payments and transfers within its scope but also the development of other vital financial services such as savings, credit, and insurance.

Mobile telephony has diffused more rapidly than any Indian technology in recent memory, yet systematic studies of its impact are rare, focusing on technological rather than social change. We employ network surveys of separate groups of Kerala residents in 2002 and again in 2007 to examine recent shifts in mobile usage patterns and social relationships.

Results show (1) near saturation of mobiles among both the professionals and nonprofessionals sampled, (2) a decrease in the number of social linkages across tie types and physical locations, and (3) a shift towards friends and family but away from work relationships in the core networks of Malayalis.

We interpret these findings as support for the bounded solidarity thesis of remote communication that emphasizes social insulation and network closure as mobiles shield individuals from their wider surroundings.

The Information Economy Report 2011 demonstrates that effective use of information and communication technologies (ICTs) in both the private and the public sector can significantly contribute to and accelerate progress in private sector development (PSD).

Governments and their development partners should take a holistic and comprehensive approach to leveraging ICTs in PSD, although a review of PSD strategies indicates that this is often not the practice. Similarly, donor strategies often refer to the use of ICTs in PSD in a peripheral manner only, if at all. On its own, new technology will have limited effects on PSD. However, when carefully integrated into policies and processes, ICTs can reduce business costs, promote transparent, rules-based systems, and improve communication between the public and private sector.

Governments need to work with the private sector to create an investment climate and a business environment that encourage the use of ICTs within private firms as well as in government. The potential of ICTs can then be realized, through adequate infrastructure and skills, and a commitment by governments to making markets work effectively. In some areas, there is already considerable experience and evidence to guide policy initiatives. In other areas, where opportunities for ICTs to contribute to PSD have emerged only in the past few years (as in the case of mobile money services), more analysis and testing of different business models is needed to assess potential and identify best practices.

Excitement around branchless banking is rapidly turning into action by the private sector. Of the 79 live mobile money deployments tracked by the GSM Association (GSMA), two-thirds have launched in 2009 and 2010. Nokia and Paypal are investing in mobile payment platforms available to any client regardless of his or her mobile network or bank, a development that could shake up markets. And early branchless banking leaders are launching out in new directions. Brazilian banks are increasingly eager to use agents equipped with point-of-sale (POS) devices to originate loans. In Kenya, Safaricom has teamed up with Equity Bank, the country’s largest bank, to offer M-Kesho, a service that uses M-PESA’s mobile payments platform to offer a full range of Equity’s bank products.

Will these sizeable investments pay off? Many in the private sector believe reaching large numbers of mass market clients is a precondition to large-scale profits, but at the same time, they are uncertain about how quickly branchless banking will gain traction with the unbanked, low-income clients who make up the mass market. In other words, the prospects of branchless banking are still unclear.

This paper uses data from nationally representative household survey conducted in 17 African countries to analyse mobile adoption and usage. This paper shows that countries differ in their levels of ICT adoption and usage and also in  factors that influence adoption and  usage. Income and education vastly enhances mobile adoption but gender, age and membership in social networks have little impact. Income is the main explanatory variable for usage. In terms of mobile expenditure the study also finds linkages to fixed-line, work and public phone usages. These linkages need however be explored in more detail in future. Mobile expenditure is inelastic with respect to income, ie the share of mobile expenditure of individual income increases less than 1% for each 1% increase in income. This indicates that people with higher income spend  a smaller proportion of their income on mobile expenditure compared to those with less income. 

The study provides tools to identify policy intervention to improve ICT take up and usage and define universal service obligations based on income and monthly usage costs. It help to put a number to what can be expected from lower access and usage costs in terms of market volume and number of new subscribers. Linking this to other economic data such as national household income and expenditure surveys and GDP calculation would allow to forecast the economic and social impact of policy interventions. Concrete recommendations are being made for policy interventions and regulatory measures to decrease access and usage costs.

This Focus Note evaluates the evidence from 18 branchless banking providers with a collective total of more than 50 million customers (see Table 1) to answer three questions: 

• Does branchless banking reach large numbers of low-income and unbanked clients?
• Are prices for branchless banking lower than prices for traditional banking for the kinds of transactions low-income and unbanked people want to do?
• What other services do these customers want from branchless banking? 

The answers to these questions have implications for the business case, customers, and those who hope that branchless banking can boost financial inclusion. 

The data offer some answers. On the question of scale, branchless banking  can reach large numbers of the unbanked relatively quickly. CGAP looked at the outreach of eight providers globally for which good data were available by drawing on 13 studies that surveyed 16,708 branchless banking clients. The eight providers average 3.73 million active registered users, of which 37 percent or 1.39 million were previously unbanked.Five of the providers reach more previously unbanked clients than the largest microfinance institution (MFI) in the provider’s country—on average, 79 percent more. 

These five branchless banking providers grew quickly, surpassing the largest MFI in number of customers within three years. This is not to suggest branchless banking is replacing or eclipsing MFIs. The services branchless banking typically provides (payments) are complimentary to MFI microloans: both meet a widespread need for which clients are willing to pay.

This paper aims to explore the use and impact of mobile telephony on the performance of companies in developing countries through a nationwide survey comprised of thousands of enterprises representing a true sample of the business sector in Palestine. This paper complements studies that make the linkage between mobile communications and economic activities at micro or enterprise level. It analyses the adoption patterns and rational behind these patterns as revealed by the business owners and managers of Palestinian enterprises.Porter’s value chain is used as a framework to assess the impact of mobile telephony in work processes.

The survey covered thousands of enterprises of all sizes and economic activities,selected to embody a representative sample of the Palestinian business sector. It further explores the views of the owners and managers of these enterprises regarding the use of ICTs.The study reveals that mobile phones have meaningfully enhanced internal processes and the overall value chain. Most notably, mobile phones were effective in bridging the information and connectivity gap businesses in developing countries ordinarily suffer.

The study has also found that small and micro enterprises gain from the use of mobiles the same as what large enterprises do, especially in mainstream operations like marketing and sales, information flow, and provision of customer services. This is happening at the time when there is a huge difference in resources between the two categories of enterprises. The study came to conclude that mobile benefits are not favoring one business sector from the other, in the sense that all business sectors are capable of tailoring mobile phone services to suit their needs

This report takes a journalistic rather than an academic approach. It aims to pique interest, provoke debate, and explore the ideas that emerged from a groundbreaking relationship. It also hopes both to accentuate the Technology Partnership’s many positive results while providing a sense of self-reflection that might benefit other potential partnerships.
Over half a decade of experimentation, the Technology Partnership encountered many challenges and saw a variety of outcomes – some successful, others less so. Some of those outcomes might have been improved by different design, but many were also an unavoidable consequence of a complex world of many players and the fast rate of
technological change.

What emerges clearly, however, is a moment of extraordinary and continued opportunity in which both the humanism of the UN and the action-oriented culture of the private sector will be essential. The potential of this cross-sector collaboration is demonstrated by the work of the UN Foundation and Vodafone Foundation. Public-private alliances of this kind require sacrifice and hard work but promise a significant boost to global efforts to improve human wellbeing.

If communications and high-tech companies are to achieve their growth targets over the next few years, they must look to the emerging economies. These markets, with large populations, hold great promise. Although many consumers in these areas live in rural areas and rely on more limited means, their disposable income has risen in recent years. Many such consumers have become more confident about the future, and are now willing to buy aspirational products such as mobile phones and services, even on credit.

To achieve high performance in this environment, companies must understand the key mobile trends as they evolve in developing economies. They must develop a deeper understanding of the mobile value proposition to emerging market consumers as well as their distinctive service needs. New distribution networks must be created. Content, products and services need to be tailored to local populations. These challenges will require new models of collaboration to succeed in a more complex ecosystem.

The world is witnessing a new dawn with regard to the potential of information and communication technologies (ICTs) to contribute in the fight against poverty. For the first time, there are now realistic opportunities for inhabitants of remote locations in low-income countries to get connected via ICTs. Farmers, fishermen as well as entrepreneurs in urban areas are rapidly adopting mobile phones as a key tool to advance their commercial activities, and some poor people are finding new livelihoods on the back of this trend. Against this background, the Information Economy Report 2010 focuses on the nexus of ICTs, enterprises and poverty alleviation. Whereas the knowledge base needs to grow considerably, the evidence presented in this Report suggests that more attention should be given by policymakers and other stakeholders to this new set of opportunities.

The Report is organized into five chapters. Chapter I introduces a conceptual framework for the analysis that follows. Chapter II reviews recent connectivity and affordability trends to gauge the degree of access and uptake of different ICTs among the poor. Chapter III turns to the role of the poor in the production of ICT goods and services (the ICT sector). In chapter IV, the focus shifts to the use of ICT by enterprises, with emphasis on those that matter most for poor people, namely small and micro-enterprises in urban and rural areas. Finally, chapter V presents the main policy implications from the analysis.

Both mHealth and MFS (Mobile Financial Services) are nascent industries and fragmented along multiple dimensions. The aim of this paper is to help reduce some of these uncertainties and reinforce dialogue on how the mobile communications platform can be leveraged to strengthen mutually positive outcomes related to both financial inclusion and health. With user-centric solutions that leverage common technologies, new efficiencies and capabilities can be created that serve to accelerate global scale.

Unlocking this potential will require the following questions to be addressed: 1. What will be the best method to drive awareness and adoption of the self-reinforcing dynamics of “wealth and health”? Who will lead these efforts? 2. How will the integration and interoperability of disparate technologies across multiple industry and public sector domains occur? 3. Who will build and manage the common infrastructure and distribution networks? 4. How will the various points of policy coordination work across sector domains?

The rise of the mobile phone has challenged the predictions that many information and communication technology for development (ICT4D) specialists offered about information in the developing world. Instead of embracing community solutions that offered shared access to information, many poor people have been willing to pay large sums and others have documented, sometimes more than 50% of their disposable income) for personal access to communication tools.

Presented with a model that extends connectivity into many poor communities without government subsidy, often turning a profit (and thus being sustainable), the development community is rightly looking for ways to build tools that leverage these platforms to promote economic and community development.

Populations in the rural developing world have just as many, if not more, information needs as people living in more affluent areas. But their constraints — intermittent power, intermittent connectivity, limited education, literacy and capital — make first-world approaches to accessing information systems inapplicable. Mobile phones are on the cusp of spurring an information revolution in such regions. Long battery life, wireless connectivity, solid-state memory, low price and immediate utility make this device better suited to rural conditions than a PC. However, current software on mobile phones makes them hard to use and to program.

In this dissertation, I present the design, implementation and evaluation of CAM — a mobile application framework designed to address the information needs of the rural developing world. Beginning with a two-month participatory design study, including users with varying levels of education, I propose some general guidelines for user interface and system design in this context. Motivated by these guidelines, I present CAM. CAM applications are accessed by capturing barcodes on paper forms using the mobile phone camera, or entering numeric strings with the keypad. Supporting one-step navigation, direct linkage to paper practices and offline multi-media interaction, CAM is uniquely adapted to rural device, user and infrastructure constraints. To demonstrate the usability of this framework, I implement and evaluate several distinct CAM-based applications (one of which has already been commercially deployed). I also provide preliminary motivation for fourteen other applications that could be implemented with the same, or similar, approach.

Presented here is an overview of the operational needs of NGOs and CBOs and the role information systems can play to increase their accountability and efficiency. Information systems need to fit the diverse operational needs of NGOs and CBOs, which include coordinating activities, training and monitoring staff, documenting results, accounting, reporting, decision making and learning, acquiring external information and encouraging community participation.

Unfortunately, there are gaps in information systems that impede the ability of NGOs to embrace ICT. To name a few, the lack of open, accessible, cross-platform mobile development tools, limited opportunities and resources provided to local small software companies to engage with NGOs, and the lack of long distance networking technologies to reach remote locations.

Two examples of technologies that were applied successfully are shared: Self Help MIS, an application to monitor activities of small microfinance organizations and credit groups and DigitalICS, an application for data collection used by agricultural cooperatives.  The author stresses that ICTs should be viewed as a tool to allow local change agents to be more effective and accountable and shows how computing is able to support local organizations by inspiring innovation, implementation and dissemination of projects, and measuring impact.

The ‘dual system’ thesis has been used to describe the continuing commitment of urban migrants to the village in various African countries. According to literature, urban workers maintain strong ties with the rural area, even after spending a substantial amount of time in the city. One way in which these ties are maintained is through urban‐to‐rural remittances.

In March of 2007, an m‐banking application called M‐PESA was introduced into the Kenyan market. This application allows for person‐to‐person (P2P) transfers of e-money via mobile phone, and facilitates urban‐to‐rural remittances.  This study will use ethnographic data collected in a Kenyan slum to show that M‐PESA is becoming a tool for the maintenance of urban-rural relations. It will further assert that because it is helping migrants to maintain such relations, it is facilitating survival in the ‘dual system’.

This paper puts forward explanations and backgrounds to the remarkable difference in user uptake of the m-banking service M-PESA in Tanzania compared to the same service in Kenya. Data gathered from user and industry interviews, conducted during a field study in Tanzania between March-May 2009 is together with literature from Kenya used to compare the m-banking environment in the two countries.

M-PESA is provided by mobile network operators (MNOs), Safaricom in Kenya and Vodacom in Tanzania. Both are the leading MNO in their respective country although Vodacom has a substantially lower market share and turnover compared to Safaricom. This simple fact resonates in many areas affecting M-PESA, such as: size of marketing budget, M-PESA's priority within the organization and the company's ability to quickly sign up agents and attract initial customers. Differences in the general economic situation, the geography and political history are also put forward. Kenya has a stronger economy, a higher GDP and a more developed banking system. This has contributed to the financial literacy in the country which is an important factor when communicating a service like M-PESA.

Among the differences between the two implementations, we suggest that the three most influential factors to the user uptake have been the two companies ability to transform their airtime distribution into an agent network, the marketing strategy which needed to be adopted to the specific settings in each country, and the geographical and demographic conditions.