Mobile money: why isn’t the M-Pesa effect hitting more countries?

THE GUARDIAN: Access to financial services via mobile phones has proven to be a huge boost to development. Why aren’t more countries following Kenya’s success?

A factory worker in Mumbai is about to settle down to a snack of samosas and chai when he gets a call from his wife in Uttar Pradesh who complains she is out of cash. No problem he says, and hangs up to send a transfer via text message. This is the latest ad for M-Pesa mobile money in India – part of a strategic campaign to target migrant workers.

M-Pesa launched in India two years ago, but so far it hasn’t had the huge impact it made in Kenya. In September 2014 M-Pesa had 370,000 users in India, where Vodafone, who provide the service, has 173 million customers. This is despite the country having huge potential in this area, with high mobile penetration and millions lacking bank services.

Mobile money was so successful in Kenya because of a combination of government support and consumer demand, which was driven by the need for secure cash transactions during political instability, says research from the University of Manchester. World Bank economist Wolfgang Fengler adds that having a mobile operator (Safaricom) with more than 50% market share also helped.

As access to financial services is recognised as key for ending poverty, how can mobile money be be encouraged in more developing countries? Do governments need to do more to support it? What’s the best way to educate users about the value of the service? Join an expert panel on Thursday 23 April, 1-3pm BST to discuss.