MasterCard Report: Prepaid, Mobile a Winning Combination for Financial Inclusion (May 27, 2014)
Prepaid cards could be a key entry point for financial inclusion—especially when combined with mobile phones, according to a new report from MasterCard that studied the underserved population in six countries within the Asia-Pacific, Middle East and Africa (APMEA) region. The report, entitled “Road to Inclusion,” studied the underserved in Egypt, India, Indonesia, Nigeria, the Philippines and Vietnam to identify who the underbanked are in each market, examine why they’re being shut out of the financial system and provide insight into how they can be included in the future.
While just 5 percent of respondents across the six markets used a prepaid card, once given information about prepaid, many said such products would be useful to meet their needs—between 30 and 40 percent in most countries, up to 60 percent in Nigeria and India. This interest in prepaid, combined with high mobile phone penetration, indicates that prepaid products linked to mobile phone accounts could be a key driver for financial inclusion—especially when combined with services such as P2P money transfer and bill payments, the report said.
Despite many differences between the markets, several common demographic themes emerged. Most of the more than 600 underserved surveyed had achieved secondary education or above and held a job—although income was typically low, averaging between $200 and $500 per month. Respondents’ money management was cash-dominated, with most reporting they store cash in cupboards or jars at home. Any saving is performed through cash-based social saving plans. When asked why they didn’t have a bank account, many respondents cited not having enough money, but others were put off by what they perceived as intimidating requirements and complex processes of obtaining an account.
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