In a recent report published by McKinsey's the value of mobile phones in developing markets is quantified. It is shown that the economic impact of mobile phones is significantly higher than the direct value to the mobile operators. This is because of a number of factors, but predominantly because of the productivity gains generated by users of mobile phones. The report then concludes that governments and regulatory bodies could amplify these gains by simplifying rules and deploying strategies to smooth the roll-out of mobile phones.This report emphasise experiences that we have in developing economies where regulatory hurdles (and lack of capital) are the two most important factor that delay the roll-out of financial services on mobile phones in developing countries. Some of the regulatory questions that we often get confronted with are the following:
- How does financial products relate to Know Your Client requirements?
- Are special reporting and documentation required?
- What are the responsibilities of the Mobile Operator? and
- Can a Mobile Operator elect to block specific services on their (regulated) network?
Resolution of some of these questions have taken so long in the past that projects sometimes stop or turn into marginal projects. It is the interest of all (including governments) that regulatory dispensations are made lighter and the deployment of mobile based solutions are made easier.
In this regard the work that CGAP and the Worldbank is doing to make recommendations to streamline the regulatory dispensations should be commended. We at Fundamo are in full support of their efforts and contribute as best we can to help establish a facilitating environment for mobile banking and services.