Getting the Infrastructure Right for Financial Inclusion

I was recently asked to write an essay for the Center for Financial Inclusion, as part of a series looking at the ingredients to get this right. They gave me the topic of getting the infrastructure right. Here's what I wrote:

Getting the Infrastructure Right for Financial Inclusion

The world is being dramatically transformed by technology such that the Digital Revolution includes everyone. It is a radical change from the Industrial Revolution, where only those rich enough to cover the costs of physical service could be included. In a digital world, digital service is cheap, fast and global. This is the transformation we see happening right before our eyes: have you noticed?

Until recently, only a third of people living on earth had a bank account. Two-thirds of humanity were excluded from financial services. The result of this inequality is that, for those who were unbanked, they had to pay more for any financial service as a percentage of their transactions. Then, in 2007, Vodafone’s subsidiary Safaricom launched M-Pesa in Kenya, and the world changed. Not only was M-Pesa a roaring success, but its concept was copied in most countries across Africa, Asia and South America. I say concept because M-Pesa itself has failed to repeat its success in other countries. This is a reflection of the reach, breadth and depth that a mobile operator needs to make such services work, and is why Orange dominates the mobile money market in Mali and EcoCash in Zimbabwe. More on this later. But the concept is the same across all nations: use the mobile phone to move money.

This is the wonderful change we see in the world.

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