Both micro-finance providers, and mobile carriers, are driving a surge in financial inclusion for the un-banked populace in developing nations, through the provision of sophisticated mobile finance services, according to the latest market study by Juniper Research.
Juniper now estimates that micro-finance user numbers in developing regions -- including Africa & India -- will triple from 94 million in 2015 to 283 million by 2020.
They found that mobile savings accounts -- such as Safaricom’s M-Shwari and Tigo Tanzania -- had already gained mass adoption in their respective markets, with the mobile network operators benefiting both from reduced churn and from the opportunity to upsell additional content such as micro-insurance and loans.
Indeed, the research study findings point out that the introduction of such services can have a transformative effect on both individual livelihoods and on local communities.
It cited the example of ACRE Africa which offers agricultural micro insurance, protecting farmers’ livelihoods in regions prone to natural disaster.
Other mobile network service providers offer insurance as an incentive to purchase airtime top-up, such as Pakistan’s Easypaisa which offers free life insurance to anyone who opens a prepaid mobile account with an average monthly balance of $20.
"For the first time, the un-banked can afford protection against natural disasters, such as crop failure and illness, essentially offering a means by which to recoup their losses. Before the introduction of micro-insurance, a farmer suffering crop failure may well have lost his livelihood," said Lauren Foye, analyst at Juniper Research.
Other key findings from the study include:
- Consumer expenditure on mobile loan services will increase by 600 percent, reaching $2.4 billion in 2020.
- MNOs (Mobile Network Operators) are able to leverage individuals’ mobile payment patterns and mobile social network histories to facilitate credit scoring for loans.
- With the closure of M-PESA linked insurance service ‘Linda Jamii’ announced, it is clear that some segments continue to face significant challenges.