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M‐Pesa and the ‘Market‐Led’ Approach to Financial Inclusion

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  • Scott Burns

Abstract

Inclusive financial systems play a critical role in fostering economic growth and development. However, the question of what is the best means of achieving this has long been a puzzle. In this article, I use the mobile money revolution in Sub‐Saharan Africa to show that the greatest examples of financial development have come from nations embracing a market‐led approach that removes repressive regulations and gives entrepreneurs the freedom to discover innovative ways to access the unbanked. Comparing the successes and failures of mobile money across the continent over the past decade, I argue that the best predictor of whether a country will reap the benefits of these transformative innovations is whether its government embraces a laissez‐faire, or ‘enabling’, regulatory approach that encourages entrepreneurship and experimentation.

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  • Scott Burns, 2018. "M‐Pesa and the ‘Market‐Led’ Approach to Financial Inclusion," Economic Affairs, Wiley Blackwell, vol. 38(3), pages 406-421, October.
    • Handle: RePEc:bla:ecaffa:v:38:y:2018:i:3:p:406-421
    DOI: 10.1111/ecaf.12321
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    Cited by:

    1. Leo Van Hove & Antoine Dubus, 2019. "M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?," Sustainability, MDPI, vol. 11(3), pages 1-26, January.

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