Financial InclusionNews & Blogs

By Alan Gelb, Tanvi Jaluka, and Rafe Mazer

In late 2021, IPA brought together hundreds of academics from across the globe to discuss new research and emerging issues related to financial inclusion at its Annual Researcher Gathering. These studies suggest that research on financial inclusion is shifting from basic questions around increasing financial access to improving the design and maximizing the economic and social benefits of formal financial services. IPA is integrating these questions into our research agenda for 2022, and we are excited to share new...

Photo: Will Boase

Ask a taxi driver in Kampala if you can pay your fare with mobile money and you’ll likely be told: yes—but only if you cover the fee to withdraw the money to cash. Despite the benefits of mobile money, many still choose to use cash, at least in part because of the high cost of mobile money transactions. Economics 101 tells us price and demand are closely linked, and evidence suggests this relationship is particularly strong for mobile money. For example, when Rwandan telcos made transactions free in early 2020, mobile money transfers...

By William Blackmon, Rafe Mazer, Ninette Mwarania, and Daniel Putman

The Central Bank of Kenya’s Banking Sector Innovation Survey indicated that in 2020 79% of all banks and 72% of all microfinance institutions had introduced new financial technology (FinTech) products to the market. Continued growth and new entrants signify a market with low barriers to entry and demonstrate the innovation opportunities available in Kenya’s financial sector. However, even with easy market entry, competition and consumer welfare concerns remain for digital credit that urgently need to be...

Photo credit: UNSGSA/Oktobernardi Salam

Imagine receiving your wages or a cash transfer directly into your bank account, but not being able to then transfer part of that money to your husband to pay for groceries, even though he lives under the same roof because his account is with a different bank. Imagine then not being able to use a debit card or mobile app to pay for gas, even though the station accepts digital payments because the gas station owner uses still a different bank. It’s no wonder that millions of people in this very situation would find...

Digital credit has transformed access to finance for hundreds of millions of consumers across the world. Through this innovation in loan delivery—characterized as “instant, automated, and remote”—people can now get loans over their phones in mere minutes. This has expanded financial access in ways never previously possible but has also led to concerns regarding aggressive marketing, high prices, and consumer risks of debt stress, such as in IPA’s recent analysis of digital credit transaction data in Kenya.

Given the potential to expand access to formal financial services digital...