CGAP (Consultative Group to Assist the Poor) and the GSM Association (GSMA) will publish the results of a study estimating the size of the mobile financial market at the Mobile Money Summit in late June 2009. It will be announced that the CGAP-GSMA Mobile Money Market Sizing Study found that the market for mobile financial services could increase to USD 5 billion by 2012.
Mobile financial services can be used for cash transfers by text message and payments such as utility bills. Customers are not required to have a bank account and often do not have access to conventional banking solutions. CGAP estimates that approximately one billion people in emerging markets have mobile phones but do not have a bank account. They expect that by 2012 1.7 billion people will have mobile phones and that one in five will use mobile money, thereby creating this USD 5 billion market. Currently the use of mobile money is limited to a few emerging markets however the use of mobile phones is spreading fast. For example in Africa the number of mobile phones has increased from 50 million in 2003 to 270 million in 2007, according to GSMA.
The concept of mobile transfers was first started by Safaricom, a Kenyan based telecommunications company. It was launched in 2007 and 2 million customers were registered within the first year of operation, according to a USAID publication entitled “M-Bureaus: M-Banking´s Next Killer Application?” This publication describes how one in six Kenyans use Safaricom’s M-PESA application; a service which allows money to be transferred using a mobile phone. By February 2009, the cumulative value of money transfers made through M-PESA was USD 1.5 billion. A Paper Wrap-Up of this report can be found in this MicroCapital story.
Mark Pickens, a microfinance analyst for CGAP remarked that “there’s a lot of excitement, but very little understanding [about] what’s going on as the number of implementations is still limited.” By the end of 2009 CGAP expects more than 120 mobile money service implementations, in developing markets. In addition a 2009 World Bank report, “Bringing Finance to Pakistan’s poor: A study on access to finance for the underserved and small enterprises” concluded that using technology such as mobile phones would expand access to microfinance for the underserved. A MicroCapital Paper Wrap-up of this report can be found here.
GSMA is an association that represents the interests of the worldwide mobile communications industry. It covers 219 countries and nearly 800 mobile operators. Established in 1982 it is based in London and focuses on driving the growth of the mobile communications industry. GSMA has created a development fund, Mobile Money for the Unbanked (MMU), to make mobile money services more available. This USD 5 million fund will support mobile operators, banks, microfinance institutions, governments, development organizations and the private sector in developing countries reach 20 million unbanked individuals by 2012.
The CGAP (Consultative Group to Assist the Poor) is an independent policy and research body, housed at the World Bank. It provides microfinance market intelligence, promotes industry standards, and offers advisory services to governments, microfinance providers, donors, and investors.
MicroCapital recently published details of the Mobile Money Summit 2009 to be held in Barcelona. Further details about the event can be found here and on our comprehensive event calendar.
By Sally Levy, Research Assistant
Additional Resources:
Yahoo Tech: Mobile money to poor seen $5 billion market in 2012
CGAP (Consultative Group to Assist the Poor): Home
GSM Association: Home
Microfinance Event: Mobile Money Summit 2009 in Spain Hosted by CGAP (Consultative Group to Assist the Poor), Department for International Development (DFID), International Finance Corporation (IFC), and GSM Association
MicroCapital: Microfinance Paper Wrap-up: Bringing Finance to Pakistan’s Poor: A Study on Access to Finance for the Underserved and Small Enterprises
MicroCapital: Microfinance Paper Wrap-up: M-Bureaus: M-Banking´s Next Killer Application?
Similar Posts:
- SPECIAL REPORT: October 28 is Deadline for MFIs to Apply to Partner with CGAP via “Microfinance Digitization” Community of Practice
- MICROFINANCE PAPER WRAP-UP: “Mobile Money, Interoperability and Financial Inclusion;” by Markus K Brunnermeier et al; published by National Bureau of Economic Research (NBER)
- MICROFINANCE PAPER WRAP-UP: “Climate Risk and Financial Inclusion: A Regulatory Perspective on Risks and Opportunities;” by Peter Knaack, Peter Zetterli
- MICROFINANCE PAPER WRAP-UP: “Digital Finance Campaign Replication Guide,” Published by USAID
- MICROFINANCE PAPER WRAP-UP: “Driving Digital Financial Services in Africa Through Merchant Acceptance of Digital Payments,” published by Alliance for Financial Inclusion (AFI)
