Mobile Financial Services: A compelling solution towards financial inclusion in India
51.4% of nearly 89.3 million Indian farm households do not have access to any credit either from institutional or non-institutional sources and only 13% of farm households avail bank loans. With the rapid growth in users and expansion in coverage of mobile phone networks in India, this platform has been recognised as an increasingly important medium to reach the unbanked. There are already over 650 million mobile subscribers; in 2009-10, rural wireless subscribers increased by 71% and rural tele-density grew by 69.2%. In this context, this context, Mobile Financial Services: A compelling solution towards financial inclusion in India seeks to highlight that mobile telephony can foster greater financial inclusion in the unbanked through the promotion of job creation strategies.
The Mobile Financial Services (M-Finance) ecosystem is a complex landscape with myriad stakeholders. The paper considers how value is created for each of the players and how different businesses and industries may benefit from this. It also identifies and analyses the drivers for M-Finance in India by studying global M-Finance success stories. Additionally, it evaluates the current regulations, policies and guidelines in this space.
The paper argues that for the M-Finance wave to succeed, the focus must shift from the industry players and regulators to the citizen, customer. The applications of M-Finance will require new and innovative ways of understanding the needs of a citizen, customer. M-Finance requires convergence of telecom operators, banks and enterprise promoting organisations that can bring about a change in the citizen, customers’ minds towards use of M-Finance.
Finally the paper recommends actions necessary for M-Finance to take off and analyzes the impact of M-Finance on Indian businesses.
