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Bite-size Case Study

Mobile money: the challenge of payments for the unbanked

Published on October 31, 2018 Originally recorded 2017   7 min
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Financial exclusion is not only about the poorest members of society.
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In many countries, those who are financially excluded are also wage earners, people like teachers or doctors or accountants or even government employees. People who are earning a monthly or a weekly wage, yet who have to go and collect their salary in cash and therefore make all of their payments in cash. So in some countries, it's estimated that around a third of official school time is actually lost due to teachers having to take the day off, travel and queue up for hours just to go and collect their pay in cash. This is a huge leap when you are trying to create efficiencies in the economy. Think about all the time and effort that could be saved and the school time that actually could be used effectively if people were earning digitally and were able to receive their money into a digital account. Like today, most of us in the developed world have a bank account in which we receive our wages. Many of the unbanked are also those people who are running small businesses or even medium-sized businesses like a shop or a wholesale trader or distributor. Not having a bank account not only leaves them vulnerable to theft, but it means that their business is limited to the customers and the other businesses who can physically transact with them in cash. So if you're trading agricultural products for example, you can only buy your next supply of stock when the supplier comes to town and can be paid in cash. Paying your own employees or your operational costs like your electricity bill or your rent, and other running costs those are all done in cash. So, in our world, in reality, having a bank account isn't just about storing your money, it's about the ability to transact with other people and businesses or to facilitate payments, incoming payments and outgoing payments especially with other entities that are physically distant from you.
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Mobile money: the challenge of payments for the unbanked

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