Mobiles to bank the unbanked

Mobiles to bank the unbanked

Mobile financial services have the potential to reduce the number of unbanked people in developing countries by up to a fifth and increase GDP by five per cent within ten years, according to a study commissioned by telco Telenor.

According to the research, carried out by Boston Consulting Group, there are over 2.5 billion adults in the developing world who are unbanked - 72% of the population. Yet the same number have mobile phones, providing an opportunity to bring financial services to around two billion.

The study focuses on five countries; Pakistan, India, Bangladesh, Serbia and Malysia, concluding that mobile money services will drive financial inclusion, increase economic growth, create jobs and help the poorest in society.

It suggests that mobile financial services may reduce the number of unbanked in Pakistan by 20% by 2020. In India the number of people with formal savings accounts could increase by 142 million and in Bangladesh tax revenues could be boosted by US$500 million.

In Serbia the technology could lead to 23,000 new jobs being created while in Malaysia economic inequality could be reduced by five per cent and become roughly equivalent to that of Canada today.

Jon Fredrik Baksaas, CEO, Telenor, says: "We believe that mobile financial services will be one of the key drivers for financial inclusion going forward and thus has the potential to be the most powerful tool for economic and social development in emerging economies."

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