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On harnessing the potential of financial inclusion


  • Peter Dittus
  • Michael Klein


The development of information and communications technology is opening up the opportunity for providing essential financial services to most people. Indeed, many mobile money or branchless banking schemes are currently spreading across the world. However, these schemes can only be sustainable if they are built on a commercially viable business model. In this respect, the verdict is still out. The paper describes one commercially viable initiative in more detail, M-PESA in Kenya, and analyses in detail the transactions involved. It argues that in order to harness the potential of financial inclusion it is vital to permit experimentation with different business models. Required therefore is regulation that enables such experimentation by calibrating it to the type of service offered, and is tightened if and when such schemes become bigger with the potential to impact the financial stability: risk-proportionate regulation by service type.

Suggested Citation

  • Peter Dittus & Michael Klein, 2011. "On harnessing the potential of financial inclusion," BIS Working Papers 347, Bank for International Settlements.
  • Handle: RePEc:bis:biswps:347

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    References listed on IDEAS

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "The Aftermath of Financial Crises," American Economic Review, American Economic Association, vol. 99(2), pages 466-472, May.
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    Cited by:

    1. Wagner, Charlotte & Winkler, Adalbert, 2013. "The Vulnerability of Microfinance to Financial Turmoil – Evidence from the Global Financial Crisis," World Development, Elsevier, vol. 51(C), pages 71-90.
    2. Aaron Mehrotra & James Yetman, 2015. "Financial inclusion - issues for central banks," BIS Quarterly Review, Bank for International Settlements, March.
    3. de Koker, Louis & Jentzsch, Nicola, 2013. "Financial Inclusion and Financial Integrity: Aligned Incentives?," World Development, Elsevier, vol. 44(C), pages 267-280.
    4. Ahmed,Habib & Mohieldin,Mahmoud & Verbeek,Jos & Aboulmagd,Farida Wael, 2015. "On the sustainable development goals and the role of Islamic finance," Policy Research Working Paper Series 7266, The World Bank.
    5. Qifeng Zhang & Josephine B. Valle-Sison, 2014. "Financial inclusion and regulatory implications," Chapters,in: Global Shock, Risks, and Asian Financial Reform, chapter 15, pages 600-627 Edward Elgar Publishing.
    6. Penelope Hawkins, 2011. "Financial access: what has the crisis changed?," BIS Papers chapters,in: Bank for International Settlements (ed.), Central banking in Africa: prospects in a changing world, volume 56, pages 11-20 Bank for International Settlements.
    7. Tanai Khiaonarong, 2014. "Oversight Issues in Mobile Payments," IMF Working Papers 14/123, International Monetary Fund.
    8. Evans, Olaniyi, 2016. "Determinants of Financial Inclusion in Africa: A Dynamic Panel Data Approach," MPRA Paper 81326, University Library of Munich, Germany.

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    financial intermediaries; payments; regulation;

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