A State-led Model of Financial Inclusion Through Mobile Services

Judith Mariscal, Daniel Rojas-Lozano



Financial inclusion is recognized by governments and multilateral organizations as an enabler of economic development, while digital mobile devices are increasingly being considered as an efficient tool to incorporate unbanked population to the financial market. Despite this, close to 2 billion adults in the world remain unbanked as business models of digital financial services for the bottom of the pyramid have not proliferated.  This paper argues that the state may play a crucial role as a catalyst to advance financial inclusion for the poor, particularly, we analyze how a conditional cash transfer (CCT) program may be a very effective platform to achieve this. We offer evidence and analyze a pilot project through which beneficiaries from the CCT program in Mexico (Prospera) were migrated from a modality of cash transfers to digital transfers. The results show this platform may indeed be effective if governments integrate diverse public entities into the mobile money ecosystem as well as promote market competition in the delivery service.  



mobile money services; financial inclusion; development; Conditional Cash Transfer programs

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