There is some debate, but not enough, about the potential profitability of the mobile money solutions that are so widely promoted as the answer to financial inclusion.

In MicroSave’s Briefing Note # 97 “The Business Case for Branchless Banking – What’s Missing?”, Ann-Byrd Platt argues that banks are not interested in the potential business at the bottom of the pyramid because:
– it requires a radical re-work of their old business model; and
– the burgeoning middle class in developing countries already present a tremendous business opportunity that is both easier and fits the current business model. This is true for the vast majority of banks.

However, there are potentially important exceptions highlighted in this Note. A diversified product range could provide tremendous opportunities to increase revenue streams, while de-congesting banking halls, both for loan application and for deposit and repayment transactions. The potential for profitable mobile- and agent-based financial services is clear.

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