The benefits to the living standards and employment prospects of citizens that have some way to access the financial system are clear: the World Bank estimates that a 15% increase in financial inclusion in a country increases annual employment growth by 1%. Given such benefits, many countries are embarking on initiatives that aim to reach the estimated 60%-70% of unbanked Latin Americans.
To ensure that mobile money becomes one of the key successful mechanisms to advance financial inclusion, it is essential that governments across the region recognize the central role that they play in creating both a framework for a mobile financial infrastructure and in driving volume to ensure a sustainable business model for market participants.
Fostering financial inclusion
Mobile money can only thrive in an environment created by a sound financial regulatory framework. In particular, government must ensure that regulations attract sufficient private sector interest - it is impossible for government to realize its financial inclusion objectives by itself - and that private sector participants have an opportunity to make long-term, sustainable profits. Governments must also ensure that unbanked citizens are able to make wise use of these new products, that customers are not exploited, that fairness is maintained and that criminal activity such as money laundering is prevented.
Mobile money offers huge opportunities for governments to reduce corruption and establish systems that deliver transparency, control and audit capabilities as well as vastly reducing costs. It also offers citizens a safer way to obtain social payments and the convenience of immediate access to funds. Moreover, it means citizens no longer have to travel large distances - and spend hours waiting in banks - to withdraw their cash. Another crucial benefit of mobile money is that it can provide enormous financial benefits to governments while advancing their economic development agenda.