Financial inclusion: disrupted liquidity and redundancy of mobile money agents in Zimbabwe
-
DOIhttp://dx.doi.org/10.21511/imfi.15(3).2018.11
-
Article InfoVolume 15 2018, Issue #3, pp. 131-142
- Cited by
- 1466 Views
-
324 Downloads
This work is licensed under a
Creative Commons Attribution-NonCommercial 4.0 International License
Mobile money agents (MMAs) are the pedestal of inclusive finance by bringing financial services closer to unbanked people by offering them capabilities to move from cash to electronic money and vice versa. This function is effective in an environment where hard cash is in uninterrupted circulation. The aim of this paper is to investigate implications of cash liquidity challenges in Zimbabwe to the development of financial inclusion through MMAs in a rural set-up. Phenomenological in-depth interviews were conducted with MMAs. Due to national liquidity challenges, MMAs ceased to receive cash float support, limiting their cash-in and cash-out services. Pure agents were adversely affected, while those who operate retail goods services reported increased goods sales through mobile money point-of-sale payments. Consumers are restricted to deal in electronic funds in the cashless economy making the cash-in and cash-out function of MMAs redundant. MMAs need support to sustain their operations and recoup invested capital in infrastructure. Risk management strategies, including the principal-agent contracts that minimize the exposure of MMAs to disruption of the service are important. MMAs could form an association to lobby financial regulators for support, negotiation with principals, market research, political power and active participation of agents in deepening financial inclusion. Perhaps pure MMAs could improve their economic sustainability by diversifying their businesses.
- Keywords
-
JEL Classification (Paper profile tab)E42, G21
-
References76
-
Tables1
-
Figures0
-
- Table 1. Interviewee characteristics
-
- Aduda, J., & Kingoo, N. (2012). The Relationship Between Electronic Banking and Financial Performance among Commercial Banks in Kenya. Journal of Finance and Investment Analysis, 1(3), 99-118.
- Afande, F. O., & Mbugua, S. W. (2015). Role of Agent Banking Services in Promotion of Financial Inclusion in Nyeri Town, Kenya. Research Journal of Finance and Accounting, 6(3), 2222-2847.
- Africa Research Bulletin (2017). Zimbabwe: Bond Note Chaos. Africa Research Bulletin: Economic, Financial and Technical Series, 53(11), 21503-21504.
- Alampay, E., & Bala, G. (2009). Mobile 2.0: M-money for the BoP in the Philippines. Annenberg School for Communication and Journalism, 6(4), 77-92.
- Argent, J., Hanson, J. A., & Gomez, M. P. (2013). The regulation of mobile money in Rwanda. s.l.: International Growth Centre.
- Bangens, L., & Soderber, B. (2008). Mobile Banking – Financial Services for the Unbanked? s.l.: The Swedish Program for ICT in Developing Regions (SPIDER).
- Bhasera, C. H., & Dhliwayo, K. (2013). Impact of product/ service characteristics on the rate of adoption of an innovation: A case of Ecocash mobile services in Chipinge District, Zimbabwe. Journal of Business and Management, 13(6), 26-32.
- Birch, D., & Young, M. A. (1997). Financial services and the Internet - what does cyberspace mean for the financial services industry? Internet Research: Electronic Networking Applications and Policy, 7(2), 120-128.
- Blumenstock, J. E., Callen, M., Ghani, T., & Koepke, L. (2015). Promises and Pitfalls of Mobile Money in Afghanistan: Evidence from a Randomized Control Trial. Proceedings of the Seventh International Conference on Information and Communication Technologies and Development. ACM.
- Bucklin, L. P. (1966). A Theory of Distribution Channel Structure. Berkeley: IBER Special Publications.
- Buku, M. W., & Meredith, M. W. (2013). Safaricom and M-Pesa in Kenya: Financial Inclusion and Financial Integrity. Washington Journal of Law, Technology and Arts, 8(3), 375-400.
- Campbell, D., & Frei, F. (2010). Cost Structure, Customer Profitability, and Retention Implications of Self-Service Distribution Channels: Evidence from Customer Behavior in an Online Banking Channe. Management Science, 56(1), 4-24.
- Central Bank of Nigeria Report (2012). National financial inclusion strategy. Abuja: Central Bank of Nigeria.
- Chagonda, T. (2012). Teachers’ and Bbank Workers’ Responses to Zimbabwe’s Crisis: Uneven Effects, Different Strategies. Journal of Contemporary African Studies, 30(1), 83-97.
- Chakravarty, S. R., & Pal, R. (2013). Financial inclusion in India: An axiomatic approach. Journal of Policy Modelling, 35, 813-837.
- Chandra, S., Srivastava, S. C., & Theng, Y. (2010). Evaluating the Role of Trust in Consumer Adoption of Mobile Payment Systems: An Empirical Analysis. Communications of the Association for Information Systems (CAIS), 27(29), 561-588.
- Chiteli, N. (2013). Agent Banking Operations as a Comparative Strategy of Commercial Banks in Kisumu City. International Journal of Business and Social Sciences, 4(13), 306-324.
- Conroy, J. (2005). APEC and financial exclusion: Missed opportunities for collective action? Asia-Pacific Journal, 12(1), 53-79.
- Creswell, J. W. (2014). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (4th ed.). California: SAGE Publications, Inc.
- De Koker, L., & Jentzsch, N. (2013). Financial inclusion and financial integrity: Aligned incentives? World Development, 44, 267-280.
- De Koker, L., & Jentzsch, N. (2013). Financial inclusion and financial integrity: Aligned incentives? World Development, 44, 267-280.
- Dermish, A., Kneiding, C., Leishman, P., & Mas, I. (2012). Branchless and Mobile Banking Solutions for the Poor: A Survey of the Literature. Innovations, 6(4), 81-98.
- Dikit, S. V., Shringarpure, A. A., & Pathan, F. N. (2012). Strategies to Make Mobile Banking Popular in India. Advances in Management, 5(13), 6.
- Diniz, E., Birochi, R., & Pozzebon, M. (2011). Triggers and Barriers to Financial Inclusion: The use of ICT-based Branchless Banking in an Amazon County. Electronic Commerce Research and Applications, 11(5), 484-494.
- Donner, J. (2004). Microentrepreneurs and Mobiles: An Exploration of the Uses of Mobile Phones by Small Business Owners in Rwanda. Information Technologies and International Development, 2(1), 1-21.
- Donovan, K. (2012). Mobile Money for Financial Inclusion. Information and Communications for Development, 61(1), 61-73.
- Duncombe, R. (2012). An Evidencebased Framework for Assessing the Potential of Mobile Finance in SubSaharan Africa. Journal of Modern African Studies, 50(3), 369-395.
- Duncombe, R., & Boateng, R. (2009). Mobile Phones and Financial Services in Developing Countries: A Review of Concepts, Methods, Issues, Evidence and Future Research Directions. Third World Quarterly, 30(7), 1237-1258.
- Eijkman, F., Kendall, J., & Mas, I. (2010). Bridges to Cash: the retail end of M-PESA. Savings and Development, 34(2), 219-252.
- Heyer, A., & Mas, I. (2009). Seeking Fertile Ground for Mobile Money.
- Heyer, A., & Mas, I. (2011). Fertile Grounds for Mobile Money: Towards a Framework for Analysing Enabling Environments. Bill and Melinda Gates Foundation.
- Hidayati, S. (2011). Cash-in and Cash-out Agents for Mobile Money in Indonesia. Innovations, 6(4), 117-123.
- Hughes, N., & Lonie, S. (2007). M-PESA: Mobile Money for the “Unbanked” Turning Cellphones into 24-Hour Tellers in Kenya. Innovations, 2(1-2), 63-81.
- Ivatury, G., & Mas, I. (2008). The Early Experience with Branchless Banking. s.l.: CGAP.
- Jack, W., & Suri, T. (2014). Risk Sharing and Transactions Costs: Evidene from Kenya’s Mobile Money Revolution. American Economic Review, 104(1), 183-223.
- Kalba, Kas. (2016). Explaining theMobile Money Adoption-Usage Gap. Communications and Strategies, 103, 113-143.
- Kapoor, A. (2014). Financial inclusion and the future of the Indian economy. Futures, 56, 35-42.
- Lawack, V. A. (2013). Mobile Money, Financial Inclusion and Financial Integrity: The South African Case. Washington Journal of Technology & Arts, 8(3), 317-345.
- Mago, S., & Chitokwindo, S. (2014). The Impact of Mobile Banking on Financial Inclusion in Zimbabwe: A Case of Masvingo Province. Mediterranean Journal of Social Sciences, 5(9), 221-230.
- Makanyeza, C. (2017). Determinants of Consumers’ Intention to Adopt Mobile Banking Services in Zimbabwe. International Journal of Bank Marketing, 35(6), 997-1017.
- Marumbwa, J. (2014). Exploring the Moderating Effects of SocioDemographic Variables on Consumer Acceptance and Use of Mobile Money Transfer Services (MMTs) in Southern Zimbabwe. American Journal of Industrial and Business Management, 4, 71-79.
- Mas, I., & Radcliffe, D. (2010). Mobile payments go viral: M-PESA in Kenya. The Capco Institute Journal of Financial Transformation, 32, 169-182.
- Mas, I., & Kumar, K. (2008). Bank on Mobiles: Why, How, for Whom? s.l.: CGAP.
- Mas, I., & Morawczynski, O. (2009). Designing mobile money services lessons from M-PESA. Innovations, 4(2), 77-91.
- Maurer, B., Nelms, T. C., & Rea, S. C. (2013). ‘Bridges to Cash’: Channeling Agency in Mobile Money. Journal of the Royal Anthropological Institute, 19, 52-74.
- Maurer, B., Nelms, T. C., & Rea, S. C. (2013). Bridges to cash: channelling agency in mobile money. Journal of Royal Anthropological Institute, 19, 52-74.
- Mavhiki, S., Nyamwanza, T., & Shumba, L. (2015). Impact of mobile banking on traditional banking practices in Zimbabwe. International Journal of Economics, Commerce and Management, 3(1), 1-13.
- Medhi, I., Ratan, A., & Toyama, K. (2009). Mobile-banking Adoption and Usage by Low-literate, Lowincome users in the Developing World. Internationalization, Design and Global Development, 485-494.
- Meuter, M., Ostrom, A., Roundtree, R., & Bitner, M. J. (2000). Selfservice technologies: Understanding customer satisfaction with technology-based service encounters. Journal of Marketing, 64(3), 50-64.
- Mills, G. (2011). Why Africa is Poor and What Africans can do about it. s.l.: Penguin Books (South Africa).
- Mols, N. P. (2001). Organizing for the effective introduction of new distribution channels in retail banking. European Journal of Marketing, 35(5/6), 661-686.
- Mols, N. P., Bukh, P. N., & Nielsen, J. F. (1999). Distribution channel strategies in Danish retail banking. International Journal of Retail and Distribution Management, 27(1), 37-47.
- Morawczynski, O. (2010). Examining the Adoption, Usage and Outcomes of Mobile Money Services: The Case of M-PESA in Kenya. s.l.: Science and Technology Studies, The University of Edinburgh.
- Ndiwalana, A., Morawczynski, O., & Popov, O. (2010). Mobile Money use in Uganda: A Preliminary Study, s.l.: Unpublished Paper.
- Ndlovu, I., & Ndlovu, M. (2013). Mobile banking the future to rural financial inclusion: Case study of Zimbabwe. Journal of Humanities and Social Science, 9(4), 70-75.
- Nel, J., & Raleting, T. (2012). Gender Differences in Low-income Nonusers’ Attitude Towards Wireless Internet Gateway Cellphone Banking. South African Journal of Business Management, 43(3), 51-63.
- Noko, J. (2011). Dollarization: The Case of Zimbabwe. Cato Journal, 31(2), 339-365.
- Omigie, N. O., Zo, H., & Rho, J. J. (2017). Customer Preadoption Choice Behavior for M-PESA Mobile Financial Services: Extending the Theory of Consumption Values. Industrial Management and Data Systems, 117(5), 910-926.
- Orozco, M., Jacob, K., & Tescher, J. (2007). Card-based Remittances: A Closer Look at Supply and Demand (Mimeograph). s.l.: The Center for Financial Services Innovation.
- Paelo, A. (2014). Mobile money: Taking on banks. s.l.: CCRED Review.
- Peruta, M. D. (2018). Adoption of Mobile Money and Financial Inclusion: A Macroeconomic Approach through Cluster Analysis. Economics of Innovation and New Technology, 27(2), 154-173.
- Pickens, M. (2009). Window on the Unbanked: Mobile Money in the Philippines.
- Rangan, V., Menezes, M., & Maier, E. (1992). Channel selection for new industrial products: a framework, method, and application. Journal of Marketing, 56(3), 69-82.
- Raymaekers, W. (2015). Cryptocurrency Bitcoin: Disruption, Challenges and Opportunities. Journal of Payments Strategy and Systems, 9(1), 3046.
- Reserve Bank of Zimbabwe Report (2015). Zimbabwe national financial inclusion strategy (2016-2020). Harare: Reserve Bank of Zimbabwe.
- Sanchez, P., & Ricart, J. E. (2010). Business Model Innovation and Sources of Value Creation in Low-income Markets. European Management Review, 7, 138-154.
- Sarma, M., & Pais, J. (2011). Financial Inclusion and Development. Journal of International Development, 23, 613-628.
- Sikwila, M. N. (2013). Dollarization and the Zimbabwe’s Economy. Journal of Economics and Behavioral Studies, 5(6), 398-405.
- Suarez, S. L. (2016). Poor people’s money: The politics of mobile money in Mexico and Kenya. Telecommunications Policy, 40, 940-955.
- The Economist (2009). Mobile Marvels, A Special Report on Telecoms in Emerging Markets. s.l.:s.n.
- The Economist (2013). In Dollars they Trust; Zimbabwe after Hyperinflation.
- Tobbin, P. (2010). Modeling Adoption of Mobile Money Transfer: Consumer Behaviour Analysis, Kampala: Mobile4Development.
- Turnball, S. (2010). How Might Cell Phone Money Change the Financial System? The Capco Institute Journal of Financial Transformation, 33-42.
- Viswanathan, M., Sridharan, S., & Ritchie, R. (2010). Understanding Consumption and Entrepreneurship in Subsistence Marketplaces. Journal of Business Research, 63, 570-581.
- Vutsengwa, R. M., & Ngugi, K. (2013). An assessment of the challenges facing commercial banks in sustainability of agency banking in Kenya: A case of commercial banks. International Journal of Economics and Finance, 1(2), 1-8.
- Zeng, W., Bai, J., & Shi, X. (2017). Development and Use of Rural Finance: A Case Study of Village A in Sichuan Province. Asian Agricultural Research, 9(6), 13-18.