July 4, 2007
Call for new regulatory framework to allow greater access to financial services via mobile phones in developing countries
A new regulatory framework is needed to encourage financial transactions by mobile phones and transform access to financial services in developing countries, claims a new policy report 'The Transformational Potential of M-Transactions', published today (4 July 2007) by Vodafone in partnership with Nokia and Nokia Siemens Network.
"... Lack of access to banking services is currently forcing people to rely on a cash-based economy with little security, a more casual informal labour market and a lower tax base for governments. The report concludes that financial services are critical for economic development and inclusive financial services for the unbanked are essential for poverty reduction.
Over the last two years, pilot programmes in Africa and Asia have highlighted the potential for mobile phones to deliver basic financial services in developing countries. The report shows how these services provide the first real opportunity for many poorer people to get on to a formal "banking ladder" with benefits including reduced threat of crime, time saving and secure savings opportunities.
However, existing banking regulation is currently inappropriate for the growth of m-transaction schemes. Vodafone, Nokia and Nokia Siemens Networks are calling for regulators to ensure they do not restrict commercial experimentation or limit the schemes to sub-economical scale."
Key suggested changes to regulation are detailed in the report.
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