Mobile financial services booming in emerging markets

FinTech Innovation editors
FinTech Innovation

The total transaction value of mobile financial services in emerging markets will reach $500 billion in 2021, up from $198 billion in 2016, Juniper Research estimates.

The estimates include revenue from domestic money transfers, deposits on loans, insurance products, and savings accounts.

The research argues that by introducing insurance offerings, operators had the opportunity to substantially reduce churn levels.

It cited the example of Telenor Suraksha life insurance scheme in India, which has seen nearly 50% of its 45 million user base sign up since its December 2015 launch.

“The model underpinning the Surakhsa scheme – requiring consumers to top-up airtime on a monthly basis to receive the insurance cover – should be widely replicated. It enables operators to maintain average revenue levels within low-income, low-ARPU prepaid environments and allows consumers to reap the benefits of micro-insurance cover,” said Lauren Foye, research analyst, Juniper Research.

However, the research cautioned that a key challenge would be tailoring financial service products to the needs of individual markets. It cited the case of several early implementations of mobile financial services in markets such as India, the Philippines and Nigeria achieving limited adoption where products were often ill-suited to their target audience.

Opportunity in New Markets

The research also highlighted the Asia-Pacific as a region which, while currently under-served due in part to the complexity of national regulations, has strong potential for future product launches.

Whilst restrictions have been in place previously, largely due to cultural beliefs, Juniper found that attitudes are changing in under-served regions, with Indonesia acquiring its first ever microloans product Kashmi in 2017.

Additionally, specialized products have been launched to address religious requirements, such as Achuwat in Pakistan which provides interest free loans to meet Sharia requirements.


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