Microfinance users to soar from 94mil to 283mil by 2020: Juniper Research

By Digital News Asia December 1, 2015

Service providers successfully facilitating financial inclusion
Can have transformative effect on individual livelihoods and communities

Microfinance users to soar from 94mil to 283mil by 2020: Juniper Research

BOTH microfinance providers and mobile carriers are driving a surge in financial inclusion for the unbanked populace in developing nations, through the provision of sophisticated mobile finance services, according to new data from Juniper Research.

Juniper’s new research, Mobile Financial Services: Developing Markets 2015-2020, estimates that microfinance user numbers in developing regions, including Africa and India, will triple from 94 million in 2015 to 283 million by 2020, Juniper Research said in a statement.

The research found that mobile savings accounts such as Safaricom’s M-Shwari and Tigo Tanzania had already gained mass adoption in their respective markets, with the network operators benefitting both from reduced churn and from the opportunity to upsell additional content such as micro-insurance and loans.

The research points out that the introduction of such services can have a transformative effect on both individual livelihoods and on communities, Juniper Research said.

It cited the example of ACRE Africa which offers agricultural micro-insurance, protecting farmers’ livelihoods in regions prone to natural disaster.

Other providers offer insurance as an incentive to purchase airtime top-up, such as Pakistan’s Easypaisa which offers free life insurance to anyone who opens a prepaid mobile account with an average monthly balance of US$20.

“For the first time, the unbanked can afford protection against natural disasters, such as crop failure and illness, essentially offering a means by which to recoup their losses,” said report author Lauren Foye.

“Before the introduction of micro-insurance, a farmer suffering crop failure may well have lost his livelihood,” she added.

Other key findings include:

Consumer expenditure on mobile loan services will increase by 600%, reaching US$2.4 billion in 2020.

MNOs (mobile network operators) can leverage individuals’ mobile payment patterns and mobile social network histories to facilitate credit scoring for loans.

The whitepaper, Microfinance with Macro Potential, is available to download from the Juniper website together with further details of the new research.