The document discusses mobile money and banking as a way to promote financial inclusion. It notes that mobile platforms are increasingly being used to provide financial services and access to banking in developing countries through agent-led models. While this trend provides opportunities to expand access, it also creates regulatory dilemmas around the roles of banks versus telecommunications companies. The document argues that increased use of mobile money can boost economic growth and circulation of money.

1. Neo Edge
Mobile Commerce Asia Summit
“ Mobile Money and Banking as a
way forward to Financial Inclusion”
24 – 25th March 2010 , Holiday Inn, Galleria
Manila , Philippines
Santanu Sengupta Change Innovators Society
Secretary , Kolkata, India

2. WHY Financial Inclusion ?
• World almost stopped growing as
developed nations start reinventing
themselves
• It is more of East ward HO in the
Millenium
• Asia Pacific & LATAM starts serious
questions, How long are we to subsidise
West’s deficit?
• And we see in the G20 COUNTRIES HIGH
GROWTH laced with poor HDI
• If only we could bring the majority poorer
to have more money at their disposal

3. What is Financial Inclusion ?
• “Financial inclusion may be defined as the
process of ensuring access to financial
services and timely and adequate credit
where needed by vulnerable groups such as
weaker sections and low income groups at an
affordable cost.” ………C.R .Rangarajan ,
Chairman , Committee on Financial Inclusion

4. The Trends : Agent Led Models
Mobile Platform Non – Mobile Platform
• M Pesa • Role of the Brazilian postal
network in promoting financial
• G cash access in deprived areas.
• Smart • Complementarities or
• Wing substitution effects between
different financial networks?
• Zap • Causal effect of Banco Postal on
• Wzzit local development outcomes?
• Fundamo
• BC/BF Model India
• Many More in the pipeline

5. Contrasting Demands vis-à-vis Supply
Side Challenges
Developed World Developing World
• Multiple Phones with • Fixed Line is passe
increasing sales of PDA • Mobile is the daily needs of
• More customised & demand the hour
driven • Mpesa , Smart,Gcash,Wing
Zap, Tag, Mobicash slowly
• Travel, hotel, cinema, sports gains ground
entertainment etc ticketing on
• Inclusive banking &
the rise commerce will be the main
• Financial ,Billing , Invoice mantra for financial inclusion.
tracking , portfolio • More money is there provided
management , share trading the price discovery
increasing day by day. is benchmarked

6. Bank & Versus Telco : Regulators
Dilemma
Developed World Developing World
• Banks run the pivotal role of an • Everywhere the TelcoS beat them
economy , but does not work for the
common people in hands down
• But standard operating procedure & • Providing a surge in most of the
practice more customised county’s GDP & ONLY shining
• TELCOs HAVING tough time as Banks sector amidst the gloom.
are older institution & have more
people to say kind words about . • Nobody worries too much about
• But TelcoS are delivering & more the missing minutes & fathers
innovating to catch mass imagination . agony at daughter’s chat bills
• TellcoS are user friendly , down to
earth, a picture of next door neighbor • Banks drive away customers
in need. where TelcoS embrace them with
• Banks image Down cast as the Wall “Chota ( Micro) Recharge”
Street has only compounded the
problem

7. Mobile Money Transfer : Fact File
• A billion Dollar industry awaiting for a nudge to
Multi – Billion one.
• Everybody transfers money every now & then ,
but at what Cost & Time
• An average sample of Rs 500 ( $ 53 ) transfer by
conventional means takes 3 minimum days at a
cost of Rs 50 as the fastest mode.
• SJW close user group does in flat 2 minutes by
exchange of cards at $ 0.20
• There is no clear or tangible estimate what is the
market size: WORLDWIDE

8. Mobile Money & The Global Crisis:
Paradigm Shift
What It can : What it will :
• With the advent of the 3G • It will open up more circulation of money &
weed out costly unproductive service
migration in the developing delivery cost in real time.
countries with or without • Small traders & Artisans will need not be at
regulatory support financial time bound mercy for small transaction &
real GDP WILL INCREASE
services will be booming. • It will invariably lead to more savings as a net
• To unfurl 3G & a combination of residues in top off or wallet as poor man’s
money is less elastic if idle.
of Wimax to remote areas a • It will lead to wholesome transparency as to
parallel thrust will have to be overall circulation of money ( Broad as
concentrated effort on Power, well as Narrow ) thereby more revenue to
the exchequer.
Roads & Concurrent Human • Will generate a commensurate increase in
Resource development . specialised service delivery domain in
financial services
• It has to go hand in hand as • Like the Public Call Offices ( PCO) which
otherwise the fate of the started the Telecom revolution will be
precurser to more hybrid Financial Services
banks will happen domain .

9. How it affects Public life?
Banks to GDP TelcoS to GDP
• In India there are only effective 200 • TelcoS have been generating more
million bank customers out which only
only 17% feeds banks transaction on a compounded revenue , &
daily basis. employment at a fraction of a cost
• Out of the total transaction it is difficult than a basic bank account opening
to estimate the real contribution to GDP to banking services .
as mostly are in use as a transactional • It is time elastic, infinitely more
value sensitive to customer loyalty
• Banks direct contribution to GDP as an ,quality of service & other forms of
instrument of development has been
playing a subservient role due to a documentation to tracking of
change in its overall positioning in the criminal & other obnoxious
growth engine activities .
• More & more banks primary function of • More & more we are having quality
a development agency has changed to almost thousands of intelligent
one of a secondary institution like a post
office of sorts or a street corner grocery Points of Presence who can & are in
shop with a higher incremental cost of many ways giving financial services
delivery with lesser people at a lesser cost

10. Mobile Money Transfer : Form &
Content
• Many pilots have sprung up.
• It will be different models as per the level of financial soundness,
regulatory norms plus ICT readiness in a given country. Copy-Pasting may
not be the ideal solution, may prove disastrous.
• Initially it will be quasi -manual to electronic as more POS will be required
to a transient use as in growth of SMS gradually to more literate sections
first to more embedded pre formatted options
• Transition to experience borne habit changes will be the order of the day
as initially E tickets were shunned by customers to regular train tickets
• Regulator’s concern cannot be done away with as missing money will be a
governments nightmare compare to missing mobile minutes.

11. The Various Forms of Inclusiveness
Country Provider Model*
Afghanistan Roshan (mobile operator) M-banking
Brazil Caixa Economica Federal (bank) Card-based
Banco Bradesco (bank) Card-based
Chile BancoEstado (bank) Card-based
Colombia Banco Caja Social (bank) Card-based
DR Congo Celpay (bank) M-banking
India SKS Microfinance (MFI) M-banking
State Bank of India (bank) M-banking
Kenya Safaricom (mobile operator) M-banking
Equity Bank (bank) M-banking
Malawi Opportunity International (bank) Card-based
First Merchant Bank (bank) Card-based
Mexico Banamex (bank) Card-based
* Source: Mpfi.

12. M- MONEY & Financial
Inclusion
Approx STATS : High Usage
• Contributes drives GDP
Growth
almost 8-13% of
GDP on an
average Mobile
• LOW ICT
Readiness one of Financial Money Ranks
sector Highest
the main reasons reforms Transfer and amongst
• Intensive usage needs it most
Value added the drivers
leads to
proliferation of
services
poorer sections
more in services Cash based
, savings, and to Stored
Value Base
prosperity

13. Uneven Portends
Financial Inclusion Mobile Growth
does not seem to beats all
move anywhere predictions

14. Mobile Money TO
Financial Inclusion
Banks/
Development
agencies
reluctant to
provide credit
Moves away
Legacy and from Treasury
Inertia THE WAY to Transaction
based
FORWARD
Manageability
Wants to cash
and price
in on huge
discovery
cash floating
becomes an
around
ISSUE

15. THE ACTION PLAN
Multi Pronged Attack
Fin Inclusion Business Community
Programme Responds Reacts
If you have the roads
Post Fin Crisis It is the Mpesa and other
Vehicles would be more
road to Salvation story
& move faster

16. Mobile Money Transfer gives the First
Taste to Financial Salvation
E commerce,
land records
, birth and
death Certs. Leveraging
Investment to
build long
term blocks to
development
Government paves the
way for Financial
Ah Financial Superhighway
Transactions
Mobile gives them the
first hand usage. Then
the SMS, soon other
services to pay for

17. After the Euphoria : The Road Ahead
Mobile Money Mobile Banking
. It is the governments first duty • Banks now looking at various
to gradually shift to cash less options to use agent network
society • Using the MNOs network makes
• Surveys show everywhere sense as they are much closer to
that the highest demand for their customers than banks
small mobile top off is at the • Using half of 500 million ( 250)
week ends. small money account of $.0.10
• It will be the same for Mobile cents of daily transaction top off
Money . give them Usd 50 million daily
• Every bank managers are free float at a fraction of a cost .
looking to woo small money • Use data collaboratively to see
clinets , alas in the legacy trends, who’s who , pattern usage
system • New financial services designed

18. GOVERNMENT SPEARHEADS ??
• Government has to move ahead if it has to
aspire to conform to Millennium Goals.
• What is the meaning of Growth? If we
continue to slip in HDI ? It is not Inclusive.
• If our Governments do not spearhead we have
more distress, terrorism, riots – instability.
• So e Government ,today, I Government
tomorrow and to…………….M GOVERNMENT

19. Benefits to All Segments
 Combine developmental
work through Mobile
•More Cash to •Direct Cash Money
the system access to
pushing up
Capital Base
•Savings
Formation
 Not One kind. UID programme
will be the biggest of Mobile
Government Banks Financial Inclusion drive.
 You have identity, governments
direct cash access programme
through a bank account
People Telcos
 Cannot be legacy Banking
•Towards greater
Inclusivity
•Cheaper  M PESA or Gcash on biometric
•Transaction
•Cost devices
 Postal as well E governance
Centres as POS

20. EVERY BODY SMILING
THANK YOU THANK YOU ALL