Are block-chain dependent currencies the answer to providing financial services to the unbanked?


Ever since Vodafone’s mobile money initiative M-Pesa took off in Kenya in 2007, investors, conglomerates, and entrepreneurs alike have tried to replicate that success in developing countries accross the globe to offer financial services to the unbanked while reaping a profit.


Despite much fanfare and claims by vested parties to the contrary, the success of mobile money deployments outside of Kenya have been limited to only a handful of the countries. Even Vodafone’s own attempts in other nations such as South Africa have not had the same impact as the company’s original model. Of the 100 million active mobile money accounts globally, Kenya’s M-Pesa user base accounts for a whopping 12% on its own.


Looking at mobile money deployments around the world, three key factors have consistently stood in the way of success:

  1. Regulatory frameworks – regulations in many countries restrict key elements of mobile money services including their ability to sign up customers for accounts

  2. Internal vested interests – Many of the telcos and banks that launch mobile money have internal vested interests that often conflict with the core value proposition of mobile money

  3. Investment requirements – Operating a mobile money deployment is an expensive proposition. The GSMA estimates that it takes 3 years for a mobile money service to start generating positive returns.


While block-chain technology dependent digital currencies have earned a mixed reputation, one important question that has surfaced is whether they can be used to launch a globally successful financial services platform for the unbanked?


We believe the combination of block-chain technology features and drive of tech savvy start-ups to disrupt this space is likely to succeed in providing financial services solutions to the unbanked over the coming years.

©2020 Pioneer Consulting Asia-Pacific

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