2 billion people globally have no bank account, but 1 billion of them have a mobile phone. Markets for digital financial services are expanding worldwide.

1. Digital Finance
Greta Bull, CEO CGAP
March 9, 2016

2. 2 billion people
have no access to formal financial services

3. 1 billion
of them
have a mobile phone

4. A large number of providers have
now understood this opportunity
Source: GSMA State of the Industry 2015
Number of live DFS services by region

5. Markets exist worldwide and
are getting deeper
Source: GSMA State of the Industry 2015
72% of these markets have
two or more providers
270+ providers of DFS
across 93 countries
Together they
serve over
411 million
customers
Seven have
interoperability

6. In Latin America, over
95% of DFS accounts
are card based
In South Asia, vast majority of
DFS customers transact over
the counter (OTC)
In Sub-Saharan
Africa, 90% of DFS
accounts are mobile
The sum total: A global transformation of financial services
Source: GSMA State of the Industry 2015
Models vary depending on
local context

7. Markets with
more DFS
than bank
accounts
19
DFS transactions
processed each day
33m
Source: GSMA State of the Industry 2015
Actively used
DFS accounts
To give a sense of the scale…
Markets with
more DFS
agents than
bank branches

8. This is having a direct impact on financial inclusion
Africa Continues to Make Remarkable Progress
Findex reports
adults with a
mobile money
account in SSA

9. Competition Pushes Traditional Players to Adapt
0
5
10
15
20
25
30
2007 '08 '09 '10 '11 '12 ''13 ''14
Mobile
payment
customers:
25.8m
M-Shwari launches in 2012:
In two years, 9.2m accounts,
20.6m loans for $277m,
$1.5bln deposits mobilized,
PAR(90) 2.2%
Partnerships, own solutions and direct competition
Bank Customers:
28.4m

10. • China moving rapidly towards full
financial inclusion (64 → 79%), driven by
state owned infrastructure and
technological disruption
• Favorable government policies expand
access
• Leveraging large state bank infrastructure
(e.g. PSBC over 400 million clients and
36,000 retail outlets)
• 800,000 agents in 400,000 villages power
digital G2P payments
• Alibaba gives people what they
want, finance plays a supporting
role
Leading role of state, but Alibaba has shifted the goal posts
China: Where Tradition and Technology Meet

11. India Stack provides digital infrastructure for full financial inclusion
India: State Builds the Rails for Private Solutions
• Important regulatory changes in 2014-15
• Open public infrastructure in key areas: ID
(Aadhaar), Unified Payments Interface with
open APIs, Digital Locker, eKYC, RuPay Card
• Private banks licensed to focus on key
segments: small business (10) and payments
(11)
• Low-threshold Jan Dhan accounts bring in
200m new customers in 2 years; layer on
insurance and pensions through Jan
Suraksha
• Government drives volume with G2P
payment for social programs (28 programs
to be digitized)

12. • Mature microfinance industry; major
player BRAC moves into agent
network through bKash
• 12 million new mobile money
accounts added in 2014, 30 million
at end of 2015
• Progress driven by large agent
network. Over 500,000 agents
nationally; 90% of adults live within 5
KM of an agent
• Dominance of OTC means full
potential of system yet to be
realized
• Banked adults moved from 5% to
9% from 2014-15
bKash drives tremendous growth in digital
Bangladesh: Microfinance Player Drives Digital

13. Latin America: Access Enabled by
Small and Large Retailers
Active Banking Agents (2010-2015)
345,754
97,561
34,427
0
100,000
200,000
300,000
400,000
2010 2011 2012 2013 2014 2015
Brazil
Colombia
Peru
Oxxo – a convenience store – is
largest banking agent network
Number of stores/branches, 2014
Banorte
Santander
1,265
1,269
7-Eleven 1,506
Banamex
1,801
1,623
Bancomer
12,597Oxxo
G2P and consumer purchases driving increased access to financial services

14. Advancing financial inclusion to improve the lives of the poor
www.cgap.org