Best Practice in Mobile Microfinance Thank You!
Lindley, Tom, National Editor has reference to this Academic Journal, PHwiki organized this Journal Best Practice in Mobile MicrofinanceFatima YousifIMTFI Annual Conference as long as Researchers6-7 December, 2011IMTFI, University of Cali as long as nia, IrvineTable of ContentsBackgroundObjectives of the StudyScope & MethodologyDefinitionsKey ChallengesKey OpportunitiesSummary of Key FindingsGuidelines as long as MFIs1I. BackgroundMobile technology is one of the fastest growing industries of the last decade.In 20102.7 billion (72%) of adults living in developing countries were unbanked.1 billion unbanked own a mobile phoneBy 20121.7 billion unbanked adults will own a phone2Source: 2010 CGAP report Measuring Financial Access Around the World
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I. BackgroundFor MFIs, mobile technology has the potential to provide a a cost effective manner to increase their outreach.Yet, only a limited number of MFIs have managed to convert a significant number of their clients to using mobile services.3II. Objectives of the studyUsing qualitative in addition to quantitative survey techniques (focus groups, direct interviews, online survey, in addition to literature reviews) the study aims to:Identify best practices as long as enabling new microfinance adopters to advance innovation faster; Underst in addition to the best approach in addition to business model as long as bringing clients on board; Underst in addition to which products in addition to services have been successful using the mobile channel to meet the poor clients needs; Provide research-based guidelines to in as long as m mobile microfinance practice in addition to policy; in addition to Identify factors critical to successful mobile microfinance adoption in addition to to develop guidelines in addition to recommendations as long as MFIs.4III. Scope & MethodologyThe study targets MFIs that have rolled out mobile financial services as long as at least a year.An online survey was sent to over 100 MFIs world-wide.Direct interviews were conducted with MFIs in addition to financial institutions in Kenya, Cambodia, Pakistan, South Africa, Tanzania in addition to India.5
III. Scope & MethodologyMFIs interviewed6IV. Definitions Mobile financial services (MFS) encompass a range of financial services:Mobile banking servicesDomestic in addition to international remittancesMobile payments7V. Key ChallengesLow agent penetration. Few countries have a sufficiently developed agency network to effectively support mobile financial services. Diverging business strategies between MFIs in addition to MNOs. MNOs are focused on first stage products such as transfers or bill payments thus microfinance services are not a priority. 8
V. Key ChallengesMobile phones are frequently shared. This poses a challenge as long as properly identifying in addition to implementing the necessary checks in addition to controls, including KYC measures. Low literacy levels Current applications rely on text, which poses a challenge to microfinance clients. 9V. Key ChallengesLow transaction limits. The ceiling on both transactions in addition to virtual wallets are kept low by regulators in order to mitigate risks (fraud, ALM, CFT). This in turn limits the MFIs ability to fully answer to the dem in addition to s in addition to needs of their clients. Lack of funding in addition to /or capacities as long as market research. Few of the MFIs have the resources or the capacity to conduct a full cost-based analysis (CBA) or in-depth market study prior to implementation. 10VI. Key Opportunities11Source: McKinsey FAI study (2009)A fast growing mobile subscription rate coupled with a still high number of unbanked adults in developing countries.
VI. Key Opportunities12A fast growing mobile subscription rate coupled with a still high number of unbanked adults in developing countries. VI. Key OpportunitiesClient innovation. Clients are the greatest source of ideas as long as developing mobile products.Innovations in technology of mobile devices. Mobile device development in addition to innovation is among the fastest in the IT industry. 13VII. Summary of key findingsA market led by mobile network operators (MNOs). 68.75% of the respondents of our online survey were operating in markets where MNOs had led the development of mobile payments. 14
VII. Summary of key findingsA market dominated by money transfers. The provision of loans in addition to savings products remains shy compared to money transfers, with only a h in addition to ful of MFIs having rolled out loans in addition to credit services. 15VII. Summary of key findingsA market that is urban in addition to peri-urban. MFS clients are primarily located in proximity to agent distribution points, most of which are located in cities or around cities. IT/MIS integration is one of the greatest challenges faced by MFIs today. In order to successfully implement mobile financial services, MFIs need to have stable core banking system which then needs to link into the transactional payment plat as long as m. This is a challenge both in terms of funding in addition to capacities. 16VII. Summary of key findingsInsufficient investment in market research in addition to pilots. Few MFIs take the time to carry out cost-based analyses, market research or pilots prior to implementing MFS. Insufficient in-house training in addition to communication. The lack of sufficient training in addition to communication strategies has led to adverse effects on the uptake of mobile services. A wait- in addition to -see approach by MFIs. MFIs tend to observe market leaders in order to follow in their footsteps. 17
VIII. Guiding principles Have all 10 on the same screen in addition to give talking points. No two market environments are exactly the sameBusiness models are not always easily transferableWhat works in a particular country at a particular point in time is not necessarily replicable in another18Do not copy & pasteUnderst in addition to your market environmentCommunicate, communicate, communicateChoose your implementing partner wiselyVIII. Guideling principles Have all 10 on the same screen in addition to give talking points. No two market environments are exactly the sameBusiness models are not always easily transferableWhat works in a particular country at a particular point in time is not necessarily replicable in another19Invest time in developing your distribution networkTest your productMonitor your productCollaborate with regulatorsThank You!Fatima YousifIMTFI Annual Conference as long as Researchers6-7 December, 2011IMTFI, University of Cali as long as nia, Irvine
Lindley, Tom National Editor
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