Mobile microfinance mobile banking in study

Banking, Investment Financial, Wireless Network, Wireless Technology

Excerpt by Research Proposal:

Among the list of more clear reasons is the simple removal of expense and first construction costs for new financial institution branches. Although such costs are distributed by all banking consumers, it requires a sizeable primary investment for the bank, and customers might not be plentiful enough to make the posting of these costs feasible for either potential customers or maybe the banks. With mobile bank, not only will be the overhead costs of a physical department eliminated, but many transactions can certainly be executed without any get in touch with between the client and lender personnel. This eliminates expenses associated with branch banking while allowing more affordable entry to more complex solutions.

This decrease of expenses is visible in other types of branchless financial, as well, just like clearly be seen in the substantial reduction in costs when point-of-sale third party brokers were introduced to the microfinance arena (CGAP a 2009). Additional transaction cost savings will be introduced simply by mobile bank with the associated with these other agents in a large number of orders; only cash transactions need the physical presence associated with an agent. The spread of mobile phones sets technology capable of bank interfacing straight in the hands of many potential clients, increasingly such as poor (CGAP a 2009). The cheaper technology costs and accessibility to mobile bank devices is responsible for the distributed of microfinancing services, as well as the larger the pool of customers is the more enticing and affordable it becomes pertaining to banks to supply such solutions.

There are some downsides to mobile phone banking. Simple marketing programs to make consumers aware of a lot more complex the baking features available do not can be found, and instead fee-driven services such as transfers and payments are heavily offered (WorldBank 2008). As the spread of mobile technology will almost certainly continue to be advertiser-based, successful strategies for advertising the more complex but more economy-boosting providers that microfinance institutions can handle providing will have to be developed. In addition , though their costs are significantly lower, third-party agent fees are subject to more volatility and variance than branch fees, which could quite possibly harm the perception of such providers and microfinancing as a whole when the handling of money is concerned.

Referrals

CGAP a (2009). “Mobile banking: Summary. ” Accessed 13 Nov 2009. http://www.cgap.org/p/site/c/template.rc/1.11.14910/

CGAP m (2009). “Technology: Project information. ” Accessed 13 November 2009. http://www.cgap.org/p/site/c/template.rc/1.11.45745/

WorldBank. (2008). “Mobile bank to transform microfinance. ” Accessed 13 November 2009. http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,contentMDK:21765683~pagePK:64257043~piPK:437376~theSitePK:4607,00.html