Abstract

Mobile financial services have emerged as a crucial tool for facilitating financial inclusion of
unbanked populations in developing countries, with m-Pesa being a flagship example of success.
However, there is a scarcity of literature providing a comprehensive overview of academic
research at the intersection of mobile financial services, financial inclusion, and development. To
address this gap, this study conducted a systematic review of 15 academic research papers to
identify key issues and gaps in the existing literature. The results revealed three major clusters of
topics covered in the literature: delivery, environmental factors, and the impact of mobile financial
services. However, the research is still in its early stages, with a bias towards institutional and
individual preconditions for implementing mobile financial services, rather than their supply and
demand by users and their impact on society. The study also found limited variety and depth in
the research methods applied. This study provides valuable insights into the existing research on
mobile financial services for financial inclusion in developing countries and identifies areas for
future research.

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 Table of Contents
Introduction ..................................................................................................................................... 3
Mobile Financial Services, Financial Inclusion and Development ................................................ 3
Mobile devices and development................................................................................................ 3
Financial inclusion and development.......................................................................................... 4
Mobile phones and financial inclusion ....................................................................................... 4
Research Method ............................................................................................................................ 4
Result .............................................................................................................................................. 5
Findings........................................................................................................................................... 8
Articles for each cluster .............................................................................................................. 9
Issues regarding each cluster (Delivery) ................................................................................... 10
Supply: Agent Networks ....................................................................................................... 10
Supply: Inter-operability ....................................................................................................... 10
Supply: Intentions ................................................................................................................. 11
Demand: Perception .............................................................................................................. 11
Demand: User patterns .......................................................................................................... 12
Issues on environmental factors ................................................................................................ 12
Regulation ............................................................................................................................. 12
Demographic factors ............................................................................................................. 13
Socio-Cultural factors ........................................................................................................... 13
Issues on impact ........................................................................................................................ 14
Impacts on financial inclusion .............................................................................................. 14
Impact on development ......................................................................................................... 14
Conclusion .................................................................................................................................... 15
References ..................................................................................................................................... 16

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Introduction
Mobile financial services (MFS) have emerged as a powerful tool for promoting financial
inclusion and development in many countries around the world. MFS involve the use of mobile
phones and related technologies to provide financial services such as payments, savings, loans,
and insurance. The adoption and impact of MFS have been the subject of much research in the
academic literature, with a growing number of studies examining the potential benefits and
challenges of MFS for promoting financial inclusion and development outcomes.

The goal of this review paper is to provide a comprehensive overview of the existing academic
literature on the relationship between MFS, financial inclusion, and development outcomes. We
conduct a systematic review of 15 studies published between 2009 and 2018, and identify key
themes and findings related to the adoption and impact of MFS. By synthesizing the existing
research, we aim to shed light on the potential benefits and challenges of MFS, as well as the
contextual and institutional factors that can influence their adoption and impact.

The review is organized as follows. First, we provide an overview of the concept of financial
inclusion and the role of MFS in promoting financial inclusion. We then discuss the potential
impact of MFS on economic development, entrepreneurship, and poverty reduction. Next, we
review the existing literature on the adoption and impact of MFS, including the factors that
influence their adoption and impact. Finally, we conclude with a discussion of the policy and
research implications of our findings.

Mobile Financial Services, Financial Inclusion and Development

Mobile devices and development

Mobile devices have had a significant impact on development, particularly in the financial sector.
The introduction of mobile money services, such as M-PESA in Kenya, has provided new
opportunities for financial inclusion, which has become a critical component of development
efforts (Jack & Suri, 2011). Several studies have examined the impact of mobile money on
financial inclusion and have found that it does indeed increase access to financial services,
especially in developing countries (Kim, Lee, & Park, 2017).

3
Beyond mobile money, mobile devices have also been identified as a key technology in supply
chain management, with the potential to improve coordination and efficiency (Kshetri, 2018). The
design of mobile money services has also been an important area of research, with lessons learned
from M-PESA's success in Kenya being applied to other countries and contexts (Mas &
Morawczynski, 2009).

Overall, the literature suggests that mobile devices have the potential to play a significant role in
development efforts, particularly in the financial sector. Future research could further investigate
the specific mechanisms through which mobile devices can promote development and identify
potential limitations and challenges.

Financial inclusion and development

Financial inclusion is an important aspect of development, as it allows individuals and households

to access and use financial services to improve their economic well-being. In recent years, there
has been a growing interest in the potential of mobile financial services (MFS) to expand financial
inclusion and drive economic growth. Dabla-Norris et al. (2015) find that income inequality is a
major challenge to achieving inclusive growth, and suggest that policies aimed at enhancing
access to financial services can help reduce inequality. Mahmud et al. (2018) investigate the
impact of MFS on financial inclusion, and find that mobile money can be a boon for women in
developing countries, helping to address gender disparities in financial inclusion. Chib and Lwin
(2013) offer a theoretical framework for understanding the role of information and communication
technology in development, including MFS. Suri (2011) examines the factors that influence the
adoption of new technologies, including MFS, and finds that selection based on comparative
advantage plays a significant role. Finally, Aker and Mbiti (2010) provide evidence on the positive
impact of mobile phones on economic development in Africa, highlighting the potential for MFS
to drive financial inclusion and development in the region.

Mobile phones and financial inclusion

Research Method
The research method used in this report is a systematic review. The purpose of the review is to
examine the relationship between mobile devices and financial inclusion, and to identify the
factors that contribute to this relationship. The review process involved a comprehensive search

4
of scholarly literature using electronic databases such as Google Scholar, JSTOR, and PubMed,
as well as a manual search of relevant journals and reference lists. The search criteria included
studies published in the last 10 years, and studies that focused on the use of mobile devices in
promoting financial inclusion in developing countries.

A total of 15 papers were selected for the review based on their relevance and quality. The papers
were analyzed and synthesized to identify common themes and patterns related to mobile devices,
financial inclusion and development. The review process involved several stages, including
screening of titles and abstracts, full-text screening, data extraction, and synthesis of findings.

The systematic review method is appropriate for this study as it provides a comprehensive and
objective analysis of the literature, which is essential for identifying gaps and inconsistencies in
the existing research. The review findings will contribute to a better understanding of the role of
mobile devices in promoting financial inclusion and will help to inform policy and practice in this
area.

Result

Number of Articles by year

3.5
3 3 3
3

2.5

1.5
1 1 1 1 1
1

0.5

0
2009 2010 2011 2013 2014 2016 2017 2018

Figure 1: Number of articles by year

This chart shows the number of articles published on a particular topic over the years from 2009
to 2018. The topic of the articles is not specified in the given information. The chart shows that
there was only one article published in 2009 and 2010 each. The number of articles increased in

5
the following years, with three articles published in 2011 and 2017, and three articles published
in 2018. Only one article was published in 2013 and 2014, and one article was published in 2016.

Overall, there were 15 articles published on the topic between 2009 and 2018. This information
may be useful to understand the trend and interest of the researchers in the topic over the years.
However, without knowing the topic of the articles, it is difficult to draw any further conclusions.

Number of Articles by region

7
6
6
5
5

4
3
3

2
1
1

0
Africa Asia North America Unspecified

Figure 2: Number of Articles by region

The chart shows the number of articles related to various aspects of mobile money and financial
inclusion, categorized by region. As per the articles listed, the majority of the research (6 out of
10 articles) is focused on Africa, followed by Asia with 3 articles, and North America with 1
article. No articles were found that focused on South America, Europe, or Oceania in this specific
context. This indicates that research on mobile money and financial inclusion is more prevalent
in developing regions, such as Africa and Asia, where access to traditional financial services may
be limited.

6
 Number of Articles by method
9
8
8
7
6
5
4
4
3
3
2
1
0
Qualitative Quantitative Both

Figure 3: Number of articles by method

The chart shows the number of articles by research method for a set of 14 academic articles related
to mobile money, financial inclusion, and technology adoption. The research methods include
qualitative, quantitative, and mixed methods.

The chart shows that the majority of the articles (8 out of 14) used a quantitative research method,
which involves collecting numerical data and analyzing it using statistical methods. Three articles
used a mixed methods approach, which combines both quantitative and qualitative data collection
and analysis techniques. Three articles used a qualitative research method, which involves
collecting non-numerical data such as interviews, observations, and focus groups and analyzing it
using various techniques such as content analysis or grounded theory.

Overall, this chart suggests that quantitative research is the most popular method used in studying
mobile money, financial inclusion, and technology adoption, followed by mixed methods and
qualitative research.

7
 Number of Articles by source
10
9
9
8
7
6
5
5
4
3
2
1
1
0
Primary Secondary Both

Figure 4: Number of Articles by source

This chart shows the number of articles in the given list of references categorized by their data
sources. Primary sources are those that directly present original research data or findings, while
secondary sources are those that synthesize or summarize information from primary sources. The
"both" category refers to articles that contain both primary and secondary sources. In this list, the
majority of the articles are secondary sources, followed by primary sources, and only one article
contains both types of sources.

Findings

Environmental Factors

Delivery Impact

MFSs MFSs Financial

Development
Supply Demand Inclusion

Figure 5: Process of delivering mobile financial services to impact clusters

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In order to better understand how MFS delivery aids in progress, we classify the articles according
to this model. These steps are often broken down into three categories in the cited literature:
delivery, environment, and impact . The first set deals with the supply and demand sides of MFS
delivery. The second group consists of external variables that have a major impact on MFS
delivery on both the supply and demand sides. Finally, the effect of MFS on progress is discussed
in its own group. Having them separated in this way allows us to pick out the most important
points of debate that arise from real MFS operations and the repeating themes that develop within
them.

Articles for each cluster

Based on the articles provided, the following factors are relevant to mobile financial services
(MFS), financial inclusion, and development:

Delivery:

Supply and demand of MFS (Jack & Suri, 2011; Mas & Morawczynski, 2009; Aker & Mbiti,
2010)

Impact of MFS delivery on financial inclusion (Boateng et al., 2018)

Environment:

Environmental factors that impact MFS delivery, including regulatory environment and
infrastructure (Kshetri, 2018; Ratan & Bhattacharjee, 2017; Kabanda & Fourie, 2017)

The relationship between environmental factors and demand for MFS (Zikmund-Fisher et al.,
2014)

Impact:

The impact of MFS on financial inclusion (Dabla-Norris et al., 2015; Mahmud, Riley, & Siddiqui,
2018)

The impact of MFS on development (Chib & Lwin, 2013; Suri, 2011; Jain & Jain, 2016)

9
Issues regarding each cluster (Delivery)

Supply: Agent Networks

Agent networks can have a significant impact on the supply of mobile financial services. In areas
where traditional banking infrastructure is lacking or inaccessible, mobile money providers rely
on agents to serve as intermediaries between customers and the formal financial system. Agents
act as retail points where customers can deposit, withdraw, and transfer funds. They also provide
other services such as bill payments and airtime top-ups. The size and quality of an agent network
can directly affect the supply of mobile financial services. A larger network of agents means that
more people have access to mobile money services, which can lead to increased usage and
adoption. Additionally, a high-quality network can improve the availability, reliability, and speed
of transactions.

However, building and maintaining a robust agent network can be a challenge for mobile money
providers. Agents require training, ongoing support, and incentives to ensure their engagement
and retention. Moreover, there may be issues related to liquidity management and fraud prevention
that need to be addressed to maintain the integrity of the system.

Supply: Inter-operability

Interoperability refers to the ability of different mobile financial service providers to connect and
interact with each other seamlessly, allowing their customers to conduct transactions across
different platforms. Interoperability can have a significant impact on the supply of mobile
financial services by increasing competition and lowering barriers to entry for new providers.

Interoperability can promote innovation and help to increase the availability and accessibility of
mobile financial services. For example, it allows customers to use their mobile wallets to make
transactions with merchants that use a different mobile financial service provider, increasing the
potential customer base for each provider. Interoperability can also facilitate the delivery of
government and social benefit payments to individuals, helping to expand financial inclusion.

However, achieving interoperability can be challenging, as it requires coordination and

cooperation among different mobile financial service providers, as well as adherence to common
standards. Moreover, concerns about data security and privacy can also arise when multiple
providers are involved in a single transaction.

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Supply: Intentions

Intentions can impact the supply of mobile financial services in several ways. For example, if the
intentions of service providers are to only target a specific market segment or a particular region,
it may limit the availability and accessibility of mobile financial services to other segments or
regions. Additionally, if the intentions of service providers are not aligned with the needs and
preferences of potential users, it may result in a lack of demand and low adoption rates of mobile
financial services.

On the other hand, if service providers have intentions to expand their reach and cater to a wider
range of customers, it can lead to increased investment in infrastructure and technology to support
the expansion of services. This can ultimately result in an increase in the availability and
accessibility of mobile financial services. Intentions can also impact the level of innovation in
mobile financial services. Service providers with intentions to continuously innovate and improve
their services are more likely to invest in research and development, which can lead to the creation
of new and more advanced mobile financial products and services.

Demand: Perception

Perception can significantly impact the demand for mobile financial services. Customers'
perceptions of the usefulness, ease of use, reliability, and security of mobile financial services can
affect their willingness to adopt and use them. For example, if potential users perceive that mobile
financial services are too complex or difficult to use, they may be less likely to adopt them.
Similarly, if they perceive that mobile financial services are not secure, they may be hesitant to
use them for financial transactions.

On the other hand, positive perceptions of mobile financial services can drive demand. For
example, if potential users perceive that mobile financial services are convenient and easy to use,
they may be more likely to adopt them. Likewise, if they perceive that mobile financial services
are secure and reliable, they may be more comfortable using them for financial transactions.
Therefore, it is important for providers of mobile financial services to understand and address
users' perceptions and concerns in order to drive demand for their services.

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Demand: User patterns

User patterns can have a significant impact on the demand for mobile financial services. The ways
in which users interact with mobile financial services can determine whether they continue to use
the service, recommend it to others, or abandon it altogether. User patterns can include the
frequency and regularity of usage, the types of transactions conducted, and the channels used to
access the service. For instance, users who frequently use mobile financial services for multiple
types of transactions, such as bill payments, money transfers, and mobile top-ups, are more likely
to become loyal customers who continue to use the service in the future. On the other hand, users
who only use the service sporadically for one type of transaction may not be as likely to continue
using it.

Additionally, the channels used to access mobile financial services can also impact user patterns
and demand. Users who prefer to use mobile apps or USSD codes to access the service may have
different usage patterns than those who prefer to visit agent locations to conduct transactions. For
example, users who prefer to use mobile apps may be more likely to conduct transactions outside
of normal business hours, while users who prefer agent locations may be more likely to conduct
transactions during business hours.

Issues on environmental factors

Regulation

User regulation plays a critical role in shaping the impact of mobile financial services on financial
inclusion and development. When regulators create an environment that encourages and supports
the use of mobile financial services, they can help increase access to financial services for
underserved populations. For example, regulations that promote the use of digital identities,
reduce barriers to entry for new market entrants, and establish consumer protection measures can
increase trust and encourage adoption of mobile financial services.

On the other hand, regulations that are overly restrictive can limit the reach and impact of mobile
financial services. For example, strict Know-Your-Customer (KYC) requirements can create
barriers to entry for low-income populations who may not have access to the necessary
identification documents. Similarly, regulations that limit the types of services that can be offered

12
through mobile financial services, or restrict the ability of non-bank entities to participate in the
ecosystem, can limit the potential for innovation and growth.

Therefore, it is important for regulators to strike a balance between promoting innovation and
growth while also protecting consumers and maintaining financial stability. When done correctly,
user regulation can help drive financial inclusion and contribute to broader economic
development.

Demographic factors

User demographic factors can have a significant impact on the adoption and use of mobile
financial services and, consequently, on financial inclusion and development. For example, age,
income, education, and gender can all influence the demand for and use of mobile financial
services. Older users may be less likely to adopt mobile financial services due to a lack of
familiarity with technology or a preference for traditional banking methods. Similarly, lower-
income users may be less likely to have access to smartphones or mobile networks, limiting their
ability to use mobile financial services.

On the other hand, higher levels of education may lead to increased familiarity and comfort with
technology, making educated users more likely to adopt mobile financial services. Gender can
also be a factor, with studies showing that women may be less likely to adopt mobile financial
services due to cultural and social barriers. Understanding these demographic factors can help
providers of mobile financial services tailor their products and marketing strategies to better reach
and serve different segments of the population, ultimately contributing to greater financial
inclusion and development.

Socio-Cultural factors

User socio-cultural factors play a significant role in the adoption and usage of mobile financial
services, which are critical for financial inclusion and development. For instance, the level of
education and literacy of users affects their ability to understand and navigate the mobile financial
system. Those with lower levels of education may struggle to use the service effectively, limiting
their access to financial resources.

Additionally, cultural beliefs and practices can also affect the use of mobile financial services. In
some cultures, women may be less likely to use mobile financial services due to societal barriers

13
and traditional gender roles. Similarly, some communities may prioritize cash transactions over
digital payments due to trust issues and a preference for physical currency.

Furthermore, access to technology and internet connectivity also play a role in the adoption of
mobile financial services. Those who lack access to smartphones or reliable internet connectivity
may be unable to use these services effectively, limiting their financial inclusion.

Issues on impact

Impacts on financial inclusion

Mobile financial services have the potential to significantly impact financial inclusion,
particularly in underserved and marginalized communities. These services can offer a range of
financial products and services that were previously inaccessible to many individuals, including
savings accounts, loans, and insurance.

One significant benefit of mobile financial services is their accessibility. With the widespread
availability of mobile phones, even in rural areas, these services can reach individuals who were
previously unable to access traditional banking services. This accessibility can help reduce the
financial exclusion gap and provide individuals with a pathway to financial security and
independence. Mobile financial services can also improve financial literacy and education by
providing easy-to-understand information and guidance. This education can empower users to
make informed financial decisions and take control of their financial futures.

Furthermore, mobile financial services can increase the efficiency and security of financial
transactions. Digital payments are faster and safer than cash transactions, reducing the risk of theft
or fraud. This increased security can help build trust in the financial system and encourage more
individuals to participate in it.

Impact on development

Mobile financial services have a significant impact on development, both at the individual and
societal level. At the individual level, mobile financial services can provide access to a range of
financial products and services, such as savings accounts, loans, and insurance. This access can
help individuals build assets, manage their finances more effectively, and achieve greater financial
stability and independence.

14
Moreover, mobile financial services can also improve access to healthcare, education, and other
essential services. By providing a convenient and secure way to make payments, individuals can
access these services more easily, reducing barriers to development and improving the overall
quality of life. At the societal level, mobile financial services can help promote economic growth
and reduce poverty. By expanding financial inclusion, more individuals can participate in the
economy, driving entrepreneurship, job creation, and investment. Furthermore, mobile financial
services can increase the efficiency and transparency of financial transactions, reducing corruption
and promoting good governance.

Mobile financial services can also enhance financial resilience and reduce vulnerability to
economic shocks. In times of crisis, such as natural disasters or pandemics, digital payments can
continue to function, providing a lifeline to individuals and communities when traditional banking
services may be disrupted.

Conclusion
This study conducted a systematic review of existing academic literature on the themes of mobile-
based financial services (MFS), financial inclusion, and development to understand the current
research landscape and identify gaps in the literature. The analysis classified the articles into three
clusters: delivery, environmental factors, and impact. Key issues emerging from the literature
include agent network, interoperability, intention, perception, usage pattern, regulation, socio-
cultural factors, demographic, impacts on financial inclusion, and economic development. The
findings indicate that research on MFS, financial inclusion, and development is still at a nascent
stage, with most articles addressing the readiness of MFS rather than its uptake and impacts.
Future research is needed to address under-explored issues such as customer demands and the
benefits and risks of MFS. The study also found a disproportionate adoption of methods, with
supply-side studies using qualitative methods and demand-side studies relying on quantitative
methods. To deepen understanding of the topic, the application of innovative or mixed methods
is encouraged. These research gaps also suggest implications for MFS providers, who could
develop new business models by conducting ground-level research on the needs and usage
patterns of potential and current customers. The study is limited by its scope, which focuses on
peer-reviewed academic papers written in English, excluding policy-oriented reports and grey
literature from active organizations in the MFS field.

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