Tag Archives: SBI

Why M-PESA may be a one hit wonder: the regulatory angle

Picture credit: SodaHead

This post is written by Shital Shah, SBI Associate Consultant.

The advent of M-PESA, a successful mobile money deployment in Kenya, raises the question of why such efforts have difficulty replicating in countries that are seemingly ripe for the use of mobile phones to increase access to financial services. If a large chunk of the population has a mobile phone in their hands, but they don’t have access to bank accounts, then they should be able to link the two together and solve the problem. This sounds reasonable in theory, but financial services are not offered in silo – they are primarily informed by regulations and a legal framework, which varies from country to country.

One reason why M-PESA may be a one hit wonder is due to Kenya’s regulatory environment with regard to mobile money, which was non-existent when Safaricom, the largest telecom operator in the country, first started M-PESA. As a result, regulations in Kenya were created as a reaction to a telecommunications company offering banking services, rather than a proactive central bank guiding the development of a banking innovation. By the time regulations came out of Kenya, M-PESA had reached scale. The likelihood of a similar trajectory happening in other countries, where banking industries may be more active in influencing policy or where regulators are proactively putting in place measures to control financial services beyond bank branches, is slim. Continue reading →

Welcome to Banking Beyond Branches

The focus of this website, “Banking Beyond Branches,” is driven by the notion that financial services in the form of brick-and-mortar infrastructure is simply not enough. With geographical, regulatory, political, and socio-economic barriers, financial services currently do not reach everyone in emerging markets. At the same time, there is no single answer for the issue of access to finance. As SBI works with financial service providers who are striving to take banking beyond conventional branches, we hope to capture key insights and practices for a wider audience to spark discussion and feedback – and in doing so, mutually strengthen the understanding of what it takes to create financial inclusion for all.

Through this portal, we look forward to learning as well as sharing our work, insights, and analysis – both from the latest happenings in the markets we operate in and from the perspective of the international experts that make up SBI’s team. We welcome your feedback, questions, and discussion along the way.

SBI is in the business of innovation. Whether the objective is to ensure rural access to finance in a country with no existing banking system, to mobilize savings in institutions that historically focus only on lending, or to help leading financial service providers reach previously underserved populations, SBI develops solutions that apply flexible, creative, and responsive approaches to local market realities. You can read more about SBI from our website. You can also follow SBI on Twitter.