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Social and financial inclusion

Greater financial inclusion is an important driver for attaining social inclusion and many of the SDGs. Mobile financial services offer the possibility to bring millions into the formal economy, boosting individual livelihoods and transforming economies.

Financial inclusion

More than one quarter of the world’s population lacks access to formal banking services. Despite the growth in mobile financial solutions, including 700 million new account holders between 2011 and 2014, nearly half of all adults in the developing world still do not have bank accounts or access to services from financial institutions, according to the World Bank. Ericsson Mobile Financial Services (MFS) aim to drive greater financial and social inclusion. Financial services need to be accessible, affordable and convenient particularly if they are to benefit users in more rural or hard-to-reach areas. The MFS platform features easy-to-use and secure next-generation mobile financial services, capable of hosting all services from different financial and commercial institutions to secure interoperability.

An open interoperable system allows traditional and non-traditional authorized financial service providers to quickly launch products and reach new consumer groups, The benefits of a fully enabled financial ecosystem are evident in the mobile wallet service called Bim asthe world’s first interoperable, shared mobile payment platform targeting financial inclusion.

The financial ecosystem achieving economies of scale and at the same time lowering operating expenditureand start-up costs. For instance, our research shows that the falling cost of digital technologies, notably mobile connectivity, could help utilities, local authorities, non-governmental organizations (NGOs) and community-based organizations effectively charge for water, generating revenues which could be used to build out new infrastructure and ultimately lead to dramatic improvements in public health and economic growth.

Mobile financial solutions can also address other sustainable development challenges, such as enabling the distribution and use of digital aid in emergency situations.

Bim launched in Peru

The benefits of a fully enabled financial ecosystem are evident in the mobile wallet service called Bim (short for Billetera Movil, or Mobile Wallet), launched by ASBANC, Peru’s National Bank Association in 2016 as the world’s first interoperable, shared mobile payment platform targeting financial inclusion. Ericsson implemented the technology platform, which is shared by 34 financial institutions and three mobile operators, and provided operational and business services. Bim make it easy for subscribers to send, receive and spend money with mobile phones and smartphones throughout Peru. The initiative is in line with Peru’s National Financial Inclusion Strategy, launched in 2015, in which the government pledged that 75% of adults would have access to a transaction account by 2021. ASBANC estimates that2.1 million Peruvians will benefit from and own a mobile wallet by 2019. Bim had 256,442 active users as of January 2017.

Growing support for digital payments

Peru is not alone among governments launching initiatives for financial inclusion based on digital payments. This is important, as technical solutions are only half the answer; regulators and central banks first need to create the underlying legal and regulatory foundations that pave the way toward full interoperability and inclusion. Among the countries for which we are providing mobile financial solutions are Pakistan and Uganda.

Easypaisa, the country’s first and largest branchless banking solution, deployed Ericsson Wallet Platform in 2016 to replace its existing platform. This increase volumes and payment transactions, enabling wider mobile money adoption. Launched jointly by Tameer Micro Finance Bank and Telenor Pakistan, Easypaisa supports more than 21 million active consumers, one of the largest mobile money service offerings in the world.

Exploring the emergency context

Digital financial services solutions for emergency situations can be of great use to the humanitarian community. The Ericsson Emergency Wallet, announced at the World Humanitarian Summit , was launched as a prototype for use in emergency situations where financial infrastructure is lacking. It will enable the distribution and use of digital funds by relief workers and impacted populations, which can help address issues such as safety, expense and traceability that are associated with handling cash. The solution design and prototyping is co-funded via the Level One Project from the Bill & Melinda Gates Foundation.

With increasing international recognition of the importance of financial inclusion for stimulating economic development and individual livelihoods, mobile financial services are critical for empowering those currently excluded from today’s traditional financial system.