Branchless Banking in the LDCs: the challenges and possibilities for donor organizations, regulators and private sector corporations to scale up mobile money in a group of LDCs
  • January 10, 2012


WHAT: The aim of the event is to discuss the challenges and possibilities for donor organizations, regulators and private sector corporations to scale up mobile money in a group of LDCs. This workshop will focus on discussing mobile financial services such as savings, payments, remittances, and potentially other services, that can both reach the poor and be sustainable given the correct product design, partnerships and regulatory environment. The event will provide an opportunity to share global learning on branchless banking in challenging environments and the need for intense cooperation between private sector providers, their partners, regulators and donors.

WHO: The Panel will consist of the following distinguished speakers:

-> Mr. Bob McMullan, Special Envoy of the Prime Minister of Australia. In November 2007, he was appointed Parliamentary Secretary for International Development Assistance. In 2010 he retired from politics after a distinguished career during which he served in both the Senate and the House of Representatives. He has since focused his energies on his International Development work and the issue of disabled persons in developing countries which is close to his heart. Mr McMullan is also member of the high-level Advisory Group on Climate Change Financing, which was mobilized during the UN Climate Change Conference in Copenhagen in December 2009. He was recently appointed Adjunct Professor at the Crawford School of Economics at the Australian National University. 

-> Mr. David Morrison, Executive Secretary, UN Capital Development Fund (UNCDF). Mr. Morrison has been Executive Secretary of UNCDF since 2008. He previously served in number of capacities with UNDP in New York, with the World Economic Forum in Geneva, and with the Canadian Foreign Service in Havana and Ottawa. He has also been a Contributing Editor to Foreign Policy magazine. He began his career with UNDP in North Korea.

-> Mr. Iosefo Bourne, Deputy Governor Central Bank of Samoa. Mr Bourne joined the Central Bank as an economist one year after the Bank was established in 1984. He became Head of the Research Department in 1993. In 2007 Mr Bourne was appointed Deputy Governor, overseeing the formulation and implementation of monetary policy, currency issue, exchange rate policy, foreign exchange control, international reserves management, financial market development, registry and corporate services and economic statistics. In 2009, financial inclusion was added to his line of responsibilities.

-> Mr. Joep Roest, Financial Inclusion Specialist, UNCDF. Joep is based in Port Moresby, Papua New Guinea and is the person on the ground for all PFIP projects in PNG and the Solomon Islands. Joep joined PFIP from WING in Cambodia, a mobile money business that is part of the ANZ banking group.

WHEN: 11 May, 2011 | 08:00 – 09:30

WHERE: Maçka Hall - Private Sector Track, Istanbul Congress Centre  -  IV United Nations Conference on the Least Developed Countries (Instanbul)

WHY: Mobile money and other forms of branchless banking are still a new and challenging business model and the risks to providers are greatest in LDCs. These initiatives require close cooperation by private sector corporations who offer the service (usually mobile network operators and commercial banks), central bankers who must oversee these new services, and donor organizations that have been instrumental in catalyzing new initiatives and sharing in the financial costs. The resulting partnerships are pivotal to develop products for the poor that can be delivered via mobile technology. While early deployments focused largely on domestic money transfer, there is a growing realization that mobile money has great potential to provide low income and rural households a safe place to save money and accumulate the larger sums that households need to manage emergencies and pay for life events, as well as to take advantage of business opportunities. While much has been written about mobile money in Africa, this panel panels will have a particular focus on the LDCs in the Pacific and Asia, including small island states, and how to develop scalable or replicable or replicable mobile money solutions that are “win-win” public-private partnerships.

The challenges: These lessons are critical for LDCs around the world, including many in Africa where mobile money efforts have not met the expectations set by the success of M-Pesa in Kenya. Banking retail capacity remains the primary constraint to inclusive finance in the LDCs and mobile phone technology offers to best opportunity in a life time to overcome this constraint. The LDCs generally suffer from higher costs of service delivery due to poor physical and financial infrastructure, shallow banking systems, dispersed populations, and economic and political instability. Retail banking infrastructure tends to be minimal, leading to significant latent demand for ways to move and save money. In most LDCs, the number of mobile phone subscribers is rapidly outstripping the current access to finance and offers a potential to reach millions with a safer, more secure way to send and store money. Across 45 LDCs surveyed by UNCDF, the average mobile phone penetration was at 28% and expected to reach nearly 40% by 2011, while access to finance by the adult population was less than 20%.

The business case for mobile money is still not proven. Successes in Kenya and the Philippines are still the exception and the models pursued there rely on a large client base, high volumes of person-to-person transactions and heavy up-front investment in distribution and marketing. Mobile money deployments in smaller, poorer or more challenging environments need to make better use of partnerships and product mixes if they are to serve the poor. This challenge is not insignificant, but it merits donor involvement as mobile phones remain the most promising path to achieve greater financial inclusion.

The opportunity: Savings is still the untold story of mobile money deployments. Research in Kenya and the Philippines suggest that clients are increasingly trusting mobile money operators with their savings. While regulatory constraints are a genuine concern, the level of stored value permitted on many of these systems can help meet the savings needs of users, enabling them to accumulate and use necessary sums. An increasing number of deployments, including one of UNCDF’s partners, are based on Mobile Network Operator Bank (MNO-bank) partners that turn mobile wallets into mobile bank accounts.

LDC Mobile Money initiative: UNCDF is developing a global initiative to focus specifically on mobile money in LDCs. This initiative will work closely with existing efforts by the Bill & Melinda Gates Foundation, Alliance for Financial Inclusion, CGAP, and the GSM Association to prove that mobile money platforms can become safe, accessible and affordable places for poor people to save.




Australian Agency for International Development (AusAID)

The Australian Agency for International Development is the Australian Government agency responsible for managing Australia’s overseas aid program. The objective of the aid program is to assist developing countries to reduce poverty and achieve sustainable development, in line with Australia’s national interest. AusAID provides advice and support to the Minister and Parliamentary Secretary on development policy, and plans and coordinates poverty reduction activities in partnership with developing countries. In addition, AusAID through its Enterprise Challenge Fund supported one of the earliest mobile money projects in Asia with ANZ bank in Cambodia.

UN Capital Development Fund (UNCDF)

UNCDF is the UN’s capital investment agency for the world’s 48 least developed countries. It creates new opportunities for poor people and their communities by increasing access to microfinance and investment capital. UNCDF focuses on Africa and the poorest countries of Asia, with a special commitment to countries emerging from conflict or crisis. It provides seed capital – grants and loans – and technical support to help microfinance institutions reach more poor households and small businesses, and local governments finance the capital investments – water systems, feeder roads, schools, irrigation schemes – that will improve poor peoples’ lives. UNCDF programmes help to empower women, and are designed to catalyze larger capital flows from the private sector, national governments and development partners, for maximum impact toward the Millennium Development Goals.

Pacific Financial Inclusion Programme (PFIP)

The Pacific Financial Inclusion Programme was developed to bring new energy and ideas on financial inclusion and financial literacy to the Pacific. Its strategy is to seek out and introduce new ways of serving hard-to-reach populations, and to foster greater commitment and cooperation among regional stakeholders to building inclusive financial systems throughout the Pacific. UNCDF manages PFIP which is jointly funded by UNCDF, AusAID, the European Union and UNDP. It has helped catalyze mobile money deployments in four countries in the Pacific region (Fiji, Samoa, Tonga and Vanuatu) with three additional launches planned (PNG, Solomon Islands and potentially Timor-Leste).