The continued roll-out of mobile microfinance services will lead to a surge in financial inclusion in some of the world’s most deprived regions, according to a new report from global firm Juniper Research.
Juniper forecasts that by 2022, 36% of the population in developing regions will utilise microfinance, up from just 22% this year, as providers tailor programmes to suit the individual needs required to operate in new markets.
According to the new research — Mobile Financial Services in Emerging Markets: Money Transfer, Loans, Savings & Insurance 2017-2022 — while microfinance products have largely revolved around basic money transfer, loans, savings and insurance, players are now seeking to innovate and adjust offerings to drive customer adoption, as well as to solve more complex social issues in developing nations. And Juniper highlighted Telenor’s recent launch of interest-free loans for farmers in Pakistan as a case in point.
According to research author Lauren Foye, “By identifying local deficiencies in financial services and plugging the gaps, operators can simultaneously improve customer retention and help to bring those customers out of poverty with the provision of services developed with specific, localised needs in mind.”
{loadposition peter}The Juniper research also anticipated that there would be in surge in deployments in underserved regions, particularly within developing Asia.
The research argues, however, that key barriers remain in less penetrated markets.
According to Juniper, most pressing is the lack of clear regulation across regions, compounded further by factors such as cultural and religious variations which can lead to operators falling foul of local customs.
But the research claimed that clarification is likely to come as operators and governments seek further inclusion and address the issues associated with an “unbanked population”, while the implementation of localised offerings would address many of the cultural differences currently hindering launches.
To download the free Juniper whitepaper go to ‘3 Ways Microfinance is Changing’.