The role of mobile telecommunications technologies in expanding financial inclusion in the unbanked populations

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ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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ABSTRACT

In this study we try to explore the role of mobile telecommunications technologies in expanding financial inclusion in the unbanked populations. The researcher used secondary research and did extensive study of the present literature to come to meaningful conclusion. This research proved helpful and the researcher came to conclusion that mobile banking is the best way to include the unbanked system in the economy. The researcher also explained the factors which were hindrance in the adoption of mobile banking.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Introduction1

Background2

Problem statement2

Aims and objectives3

Research question3

Time frame3

CHAPTER 2: LITERATURE REVIEW5

Being unbanked: what does it mean?7

Mobile Banking8

Adoption of Technology16

Theory of Acceptance and Use of Technology17

Theory of Planned Behaviour (TPB)18

Technology Acceptance Model (TAM)20

CHAPTER 3: METHODOLOGY23

CHAPTER 4: DISCUSSION AND ANALYSIS26

Evolution of Mobile Services26

The mobile phone - bringing financial services to the unbanked30

What are the causes of financial exclusion?31

A tool for societal change31

The New Business Model32

Overview of factors influencing mobile banking40

CHAPTER 5: CONCLUSION44

Recommendation46

REFERENCES48

CHAPTER 1: INTRODUCTION

Introduction

A unique situation exists with respect to the use of mobile phones worldwide. Although mobile phones were first deployed in the United States the use of mobile phone-based financial services, such as the ability to transfer a cash payment to another mobile phone user, is expanding much more rapidly in South Africa than in the United States. Individuals across the world execute billions of dollars in financial transactions every year, with a large proportion of these exchanges being facilitated by credit cards, debit cards, or cash (Calder 1977 353). However, a different method of performing financial transactions is emerging: using a mobile phone to transfer a payment to another mobile-phone user. This trend is emerging because there are lots of people who are not involved in the banking industry. These people are termed as unbanked people. These people are out of the banking operation or cycle due to various reasons. This research is basically about these unbanked as to how these people can be approached and included in the banking sector. (Calder 1977 353)

Expanding the use of mobile-phone-based payment systems in both developed and developing countries could increase the accessibility of money for individual transactions, and this increase could have a net positive impact on the Gross Domestic Product (GDP) in countries such as the United States. This is because GDP is positively influenced by a greater velocity of money, which is increased by the ability to transfer money to others more easily. The goal of this research was to investigate how the unbanked population can be approached via mobile ...