Technology for Good

Beyond Mobile Money

Harnessing the power of mobile to deliver a range of solutions for financial inclusion.

Beyond Mobile Money

February 26, 2017

Advances in mobile technology are providing better access to markets, credit and ensuring small merchants are able to reap the benefits of going digital. Yet there are still gaps in service and barriers to participation that must be overcome for countries to fully realize the economic boost that mobile connectivity can provide. As the world marks the first decade of mobile money, we take a look at milestones in the field and the frontier ahead for serving those still left behind.

Beyond M-Pesa

Long before Apple Pay or other mobile money options, M-Pesa was making its mark in Kenya. There, “half of adult consumers have an account and a huge share of the country’s GDP passes through the system,” writes Tom Jackson in Quartz.


M-Pesa was launched in 2007 by Vodafone for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania. (Photo Credit: Tony Karumba/AFP/Getty Images)

Despite M-Pesa’s success, it’s still too early to claim victory, he says. M-Pesa has not taken off everywhere. In particular, reaching that “last mile” of users in poor rural areas is difficult. Indeed, experts warn that making mobile payments sustainable means getting past the chicken-and-egg trap of “matching consumer uptake and merchant acceptance,” Jackson writes. “Few manage to achieve this.”


BiM in Peru was built to overcome some of the challenges faced by M-Pesa and other mobile money systems that rely on an agent model. Launched in 2016, it takes advantage of existing digital and physical infrastructure, including Peru’s 30,000 ATMs, to extend its reach to underserved customers and achieve scale, writes the Better Than Cash Alliance’s Jeffrey Bower.

Expanding access to credit and capital

Any small business needs capital to thrive and grow. Yet for micro or small businesses, getting a loan can be difficult. But fintech options are starting to fill the gap. Tienda Pago in Mexico and Peru uses a mobile-based approach to extend short-term working capital to small stores to finance their inventory purchases through partner distributors. An Accion Insights report notes that “by partnering with major fast-moving consumer goods (FMCG) distributors, Tienda Pago finds a way to identify eligible customers and manage its credit risks.”

Fintech startups are also innovating with alternative credit scoring for consumers. in Kenya offers an app that tracks a user’s data and uses it to evaluate his or her credit-worthiness. But not just the typical data. Tala’s goal is to cast the net much wider. “Our algorithms seek out new and unconventional reasons to trust people, looking for behaviors and patterns that prove their willingness and capacity to repay a loan.” Like outgoing calls. Turns out the ratio of incoming to outgoing calls between 9 p.m. and midnight can predict loan payment. “If less than 30 percent of calls are outgoing between these hours, then the repayment rate increases by 18 percent,” they have found.

It’s a way for those with no formal banking or credit history to start building one.

Better market connections for smallholder farmers

For any farmer, buying and selling at the right time mean the difference between profit and loss. For farmers in East Africa, that is not always easy.

A new fintech product may help. Developed by the Mastercard Lab for Financial Inclusion in Nairobi, 2KUZE is a digital platform that connects smallholder farmers, agents, buyers and banks. It creates more price transparency and faster payments via their phones. It also helps farmers build their financial footprint which can open up access to borrowing later on.


Mastercard Lab is exploring the potential for 2KUZE to help farming communities connect to more efficient markets.

“There’s been a lack of efficiency in information and the payment process that hasn’t put the farmer in a position to get the best value for their produce,” said Daniel Monehin, Mastercard’s President for Sub-Saharan Africa. 2KUZE “will empower the farmers,” he says.

eKutir takes another approach for farmers in India. Through a network of micro-entrepreneurs, eKutir is turning everyday data into information that both helps farmers increase yields and prices and helps lenders judge a farmer’s credit-worthiness. Trained entrepreneurs, equipped with a suite of low-cost mobile applications, provide affordable soil analyses, education and key market connections.

Building the payment ecosystem

Other tools are aimed at helping small merchants join the digital economy. Mobile apps using QR codes are making it more affordable and easier for mom-and-pop operations to accept digital payments. QR codes allow customers to pay for goods and services using their mobile phones, without ever having to swipe a credit card.

India recently announced Bharat QR, the world’s first interoperable payment acceptance solution. Bharat QR standardizes the use of QR codes across the country, making digital payments more seamless for customers and aiding the government’s push towards a less-cash economy. Interoperability is seen as a crucial step for enabling more frequent usage and deepening financial inclusion.

So what’s next for mobile fintech? As apps continue to proliferate, look for the emergence of “one-stop-shop” solutions that offer users the ability to pay a friend, obtain a loan, buy supplies online and check crop prices conveniently all in one app.

Panelists at Mobile World Congress, including Center president Shamina Singh, convene this week to discuss these and other achievements as well as future opportunities for delivering digital and financial inclusion for women.

Featured Photo Credit: Getty Images