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M‐Pesa and the ‘Market‐Led’ Approach to Financial Inclusion
Author(s) -
Burns Scott
Publication year - 2018
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/ecaf.12321
Subject(s) - unbanked , financial inclusion , transformative learning , government (linguistics) , entrepreneurship , economics , financial services , business , finance , sociology , pedagogy , linguistics , philosophy
Inclusive financial systems play a critical role in fostering economic growth and development. However, the question of what is the best means of achieving this has long been a puzzle. In this article, I use the mobile money revolution in Sub‐Saharan Africa to show that the greatest examples of financial development have come from nations embracing a market‐led approach that removes repressive regulations and gives entrepreneurs the freedom to discover innovative ways to access the unbanked. Comparing the successes and failures of mobile money across the continent over the past decade, I argue that the best predictor of whether a country will reap the benefits of these transformative innovations is whether its government embraces a laissez‐faire, or ‘enabling’, regulatory approach that encourages entrepreneurship and experimentation.