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#. INTRODUCTION The concept of microsavings and microloans amongst the poor is not new. Today, microfinance is widely accepted as a poverty-reduction tool, representing $70 billion in outstanding loans and a global outreach of 154 million clients. However, modern microfinance is not without criticism, the greatest ones have to do with high interest rates and costs associated with providing financial access to a risky population. It is therefore a primary objective for the microfinance community to examine ways in which operation and infrastructure costs can be reduced. Branchless banking seems to hold that promise. It has the potential to reduce operation costs by circumventing the need to build brick and mortar branches. This document describes best practices in delivering mobile financial services. Grameen Foundation

“With advances in mobile technology and greater affordability of mobile phones, mobile money seems to hold great potential�


IN 2010 Unbanked in  

2.7 billion developing countries   BY 2012 Unbanked  people   with  mobile  phones  

1.7 billion

This research is based on a review of microfinance institution (MFI) experiences with mobile financial services (MFS) to date to understand the main challenges and opportunities faced during its implementation. The case study aims to provide practical information and research based guidelines on how MFIs can leverage existing best practices. It will help MFIs increase their chances of successfully implementing mobile financial services. It covers various topics: from conducting preliminary research to designing products. To access the complete case study, click here






Business Model



Briefly describe each phase/ component of the case study.




Briefly describe each phase/ component of the case study.





























1.  Conduct Feasibility Study The first step to implementing MFS would be to carry out extensive research, of which a feasibility study is most important

2. Take careful procedures Explore costs and time related to changes in MFI core processes. Ensure that services are tested and run smoothly with diverse groups of clients before rolling it out more broadly

3. Conduct careful assessment Understand market environment and opportunities to assess costs & benefits. Consumer behavior should also be prioritized

4. Consider NOT implementing Also consider the option of NOT implementing mobile financial services if the organization or market are not ready. Wait for new developments for more viable implementation


1.  Choose a business model After complete extensive research, determine which business model to implement: create your own, partner with MNO/bank/ third party or merge with a partner institution

2. MNO Partnership The best way to take advantage of existing network and visibility is MNO partnership. Keep in mind: vision/mission, negotiation power, consumer protection, data confidentiality, interoperability, real time reconciliation, tari, and coverage

3. Create your own platform Only undertake when there is an enabling regulatory framework, high level of latent demand and little prospect of MNO.

4. Important cautions For MNO partnership, it is important to gain ability to influence market trends. For creating your own platform, it is very resource intensive and should be weighted against the probability of new entrants in the market


1.  Integrated MIS system An efficient and adequate management information system (MIS), fully integrated with the core banking system, is crucial to the successful implementation of MFS

2. Manual reconciliation risk Avoid manual reconciliation at all costs because it means that the security is no longer airtight and more prone to human errors when capturing data. There are risks to fraudulent behaviors

3. Choose vendors carefully Choose a vendor that has a proven track record implementing mobile money solutions for MFIs

4. Resolve issues efficiently Incorporate a suspense account to easily resolve errors, develop training tools to resolve the issues


1.  Segment clients MFIs should segment their clients to understand their specific needs and not just simply replicate existing products

2. Identify your niche Identify a niche that can become your signature products and perfect it before rolling out other services

3. Create innovative products Be on the lookout for new use cases that can lead to innovative products through MFS

4. Keep it simple Start small and keep it simple


1.  Comprehensive change-leadership Design a comprehensive change-leadership plan that includes frequent communication, engaging frontline employees in process redesign and ensuring that all affected staff are trained

2. Train staff Provide theoretical and on-the-job training for your staff on new material and how to resolve issues. Use language and visuals to describe your service

2. Train clients Train your clients and involve group leaders. Inform your clients on possible risks of fraud and set up mechanisms and design training to minimize risk

4. Feedback channel Provide a channel for feedback from both your clients and staff, especially during the initial months of implementation

#6 - PILOT

1.  Develop a complete system Design the pilot so that it is as accurate a representation of the full-scale rollout as possible

2. Give sufficient time Plan enough time to implement the pilot, to receive feedback on it and to implement/test any changes

3. Information provision Inform staff as well as clients of your activities, to prepare them for possible setbacks and opportunities for improvement

4. Wide Involvement Involve group leaders and keep staff at all levels informed


1.  Comprehensive communications Communications must be carried out both internally and externally. It must involve all staff members in the development process, not only staff in the related departments

2. Communications up Communication up to board of directors and other stakeholders. Having the full support will ensure support for setbacks as well.

3. Dynamic brand marketing Differentiate your product through a well-targeted advertising and branding campaign to speed clients adoption

4. Use comprehensive means Make use of various means of communications, both the usual tools and word of mouth

#8 – AGENT

1.  Identify strategy A well-established agent footprint is pivotal to success of MFS. Identify which type of retailers can act as reliable agents, consider: location, reputation, traffic, commitment, network coverage and an existing business

2. Separate treatment Agents should be treated as a separate segment of clients with strategies to incentivize and ensure their loyalty

3. Liquidity and location Agents should be trained on liquidity management. Location is strategic for agents, who should be close to the targeted clients

4. Performance monitoring Agents performance should be monitored and if needed, poor performers should be eliminated from the program


1.  Ensure protection Regulators balance between two objectives: needing to protect banks and increasing financial inclusion. Positions taken by regulators directly aect the outcome of MFS success.

2. Build trust Regulators play an important role in defining and enforcing: KYC (know your customer), AML (anti-money laundering) and CFT (combating the finance of terrorism). It also helps build trust among users of MFS.

3. Seek regulators Identify partners within the regulatory body. Be on the lookout for developments in national regulations regarding e-money or changes to current regulations.

4. Find alliance Proactively participate in debates that concern the mobile money market. Create alliances with like-minded institutions to increase influence on developing sound policies for mobile banking

Mobile Microfinance  

A visual case study on best practices of providing mobile financial services by Grameen Foundation

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