Implementing nationwide regulatory laws significantly improve financial ecosystems and the spread of digital mobile services, says a new financial inclusivity report. Brookings Institution looked at 26 countries across Africa, Asia and Latin America and assessed those countries’ commitments in devising national financial strategies, penetration of mobile services, and the various use of both traditional and digital financial services.
“On the face of it, the idea African regulators can enable digital financial inclusion seems unlikely given recent experience.”
Kenya, South Africa, Uganda, Rwanda and Nigeria ranked among the top ten in the list of countries surveyed. Kenya scored high because of the Kenyan government’s support for branchless banking activities through modifications introduced into the Finance Act. This allowed third-party entities, based in places as varied as supermarkets, gas stations and post offices, to act as agents for the banks. Formal arrangements between banks and mobile phone networks in Nigeria have also drawn millions of people into the formal financial system.
The launch of consumer protection laws in countries like Tanzania and Kenya has also showcased government commitment to create sustainable financially inclusive environments for customers. This was considered vital in order to get more customers to trust the financial system in the long run. For instance, in Nigeria, there was a noted decreased in fraudulent bank transactions in 2015, which dropped to 2.3 billion naira ($7.1 million) from 6.2 billion naira ($19.3 million) in 2014.
Significant development in mobile money infrastructure in other African countries also acted as a major boost for financial inclusivity—surpassing the use of traditional bank accounts in many countries. Kenya scored the highest because of its mature mobile money market,with the success of M-Pesa service amplifying the number of people who had access to financial services.
This post was first published here.