IDEAS home Printed from https://ideas.repec.org/a/pal/jofsma/v26y2021i2d10.1057_s41264-020-00085-7.html
   My bibliography  Save this article

Telecom microfinance banking versus commercial banking: a battle in the financial services sector

Author

Listed:
  • Waqar Younas

    (Limkokwing University of Creative Technology)

  • K. Ramanathan Kalimuthu

    (Limkokwing University of Creative Technology)

Abstract

The purpose of the study is to compare the growth rate of commercial banks with microfinance banks, under the shadow of financial exclusion, and to provide a way forward for commercial banks. As we are living in the age of transformation, businesses cannot survive without evolution and necessary transformation. The Telecom sector of Pakistan suffered at the hands of Over-The-Top services, so is happening with the commercial banking. Telecom companies have chosen microfinance banking as their alternative revenue stream which is affecting commercial banks. Microfinance banks, typically mobile phone banking, are showing more growth in deposits and loans than commercial banks. Along with the analysis of industry reports, commercial banks’ managers are also interviewed to perform an accurate analysis of the situation. It has been concluded that commercial banks are suffering due to financial exclusion and their deposits and lending rates are also decreasing due to microfinance banks. It is important for commercial banks to formulate their strategies and introduce new services according to the needs and preferences of their customers and they also need to increase banking awareness of their potential customers.

Suggested Citation

  • Waqar Younas & K. Ramanathan Kalimuthu, 2021. "Telecom microfinance banking versus commercial banking: a battle in the financial services sector," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 26(2), pages 67-80, June.
    • Handle: RePEc:pal:jofsma:v:26:y:2021:i:2:d:10.1057_s41264-020-00085-7
    DOI: 10.1057/s41264-020-00085-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41264-020-00085-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1057/s41264-020-00085-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mustabsar Awais & M. Fahad Laber & Nilofer Rasheed & Aisha Khursheed, 2016. "Impact of Financial Literacy and Investment Experience on Risk Tolerance and Investment Decisions: Empirical Evidence from Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 73-79.
    2. Annamaria Lusardi, 2015. "Financial Literacy Skills for the 21st Century: Evidence from PISA," Journal of Consumer Affairs, Wiley Blackwell, vol. 49(3), pages 639-659, November.
    3. A. Seddik Meziani & Elliot Noma, 2018. "A New Method of Measuring Financial Risk Aversion Using Hypothetical Investment Preferences: What Does It Say in the Case of Gender Differences?," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 19(4), pages 450-461, October.
    4. Sohail Kamran & Outi Uusitalo, 2016. "How the unbanked cope with financial exclusion: Evidence from Pakistan," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 21(2), pages 153-165, June.
    5. Audil Rashid Khaki & Mohi-ud-Din Sangmi, 2017. "Does access to finance alleviate poverty? A case study of SGSY beneficiaries in Kashmir Valley," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 44(8), pages 1032-1045, August.
    6. Josiah Aduda & Elizabeth Kalunda, 2012. "Financial Inclusion and Financial Sector Stability With Reference To Kenya: A Review of Literature," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 2(6), pages 1-8.
    7. Muhammad Farooq & Valliappan Raju, 2019. "Impact of Over-the-Top (OTT) Services on the Telecom Companies in the Era of Transformative Marketing," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 20(2), pages 177-188, June.
    8. Chakravarty, Satya R. & Pal, Rupayan, 2013. "Financial inclusion in India: An axiomatic approach," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 813-837.
    9. Sheena Lovia Boateng & Bedman Narteh, 2016. "Online relationship marketing and affective customer commitment – The mediating role of trust," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 21(2), pages 127-140, June.
    10. Annamaria Lusardi, 2008. "Household Saving Behavior: The Role of Financial Literacy, Information, and Financial Education Programs," NBER Working Papers 13824, National Bureau of Economic Research, Inc.
    11. Abdul Rashid & Maurizio Intartaglia, 2017. "Financial development – does it lessen poverty?," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 44(1), pages 69-86, January.
    12. Fernando Oliveira Santini & Wagner Junior Ladeira & Claudio Hoffmann Sampaio & Marcelo Gattermann Perin, 2018. "Online banking services: a meta-analytic review and assessment of the impact of antecedents and consequents on satisfaction," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 23(3), pages 168-178, December.
    13. Asli Demirguc-Kunt & Leora Klapper & Dorothe Singer & Saniya Ansar & Jake Hess, 2018. "Global Findex Database 2017 [La base de datos Global Findex 2017]," World Bank Publications - Books, The World Bank Group, number 29510.
    14. Aijaz A. Shaikh & Richard Glavee-Geo & Heikki Karjaluoto, 2018. "How Relevant Are Risk Perceptions, Effort, and Performance Expectancy in Mobile Banking Adoption?," International Journal of E-Business Research (IJEBR), IGI Global, vol. 14(2), pages 39-60, April.
    15. Maëlle Della Peruta, 2018. "Adoption of mobile money and financial inclusion: a macroeconomic approach through cluster analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(2), pages 154-173, February.
    16. Ibn Kailan Abdul-Hamid & Aijaz A. Shaikh & Henry Boateng & Robert E. Hinson, 2019. "Customers' Perceived Risk and Trust in Using Mobile Money Services—an Empirical Study of Ghana," International Journal of E-Business Research (IJEBR), IGI Global, vol. 15(1), pages 1-19, January.
    17. Sanjaya Kumar Lenka & Rajesh Barik, 2018. "A discourse analysis of financial inclusion: post-liberalization mapping in rural and urban India," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 10(3), pages 406-425, June.
    18. Tamás Martos & Mária Kopp, 2012. "Life Goals and Well-Being: Does Financial Status Matter? Evidence from a Representative Hungarian Sample," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 105(3), pages 561-568, February.
    19. Viswanath Venkatesh & Fred D. Davis, 2000. "A Theoretical Extension of the Technology Acceptance Model: Four Longitudinal Field Studies," Management Science, INFORMS, vol. 46(2), pages 186-204, February.
    20. Brigit Helms, 2006. "Access for All : Building Inclusive Financial Systems," World Bank Publications - Books, The World Bank Group, number 6973.
    21. Fang Zhao & Jie Sun & Raj Devasagayam & Gary Clendenen, 2018. "Effects of culture and financial literacy among Chinese-Americans on participating in financial services," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 23(1), pages 62-75, March.
    22. Vahid Shahabi & Farshad Faezy Razi, 2019. "Modeling the effect of electronic banking expansion on profitability using neural networks and system dynamics approach," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 11(2), pages 197-210, June.
    23. Philip Kostov & Thankom Arun & Samuel Annim, 2014. "Banking the unbanked: the Mzansi intervention in South Africa," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 7(2), pages 118-141, November.
    24. Debasish Maitra & Parijat Upadhyay, 2017. "Fostering Rural Financial Services through Technology: The Case of FINO PayTech," Asian Case Research Journal (ACRJ), World Scientific Publishing Co. Pte. Ltd., vol. 21(01), pages 81-117, June.
    25. Waqar Younas* & Tariq Javed & K. Ramanathan Kalimuthu & Muhammad Farooq & Faisal Khalil-ur-Rehman & Valliappan Raju, 2019. "Impact of Self-Control, Financial Literacy and Financial Behavior on Financial Well-Being," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 5(1), pages 211-218, 01-2019.
    26. Shirazi, Nasim Shah & Javed, Sajid Amin & Ashraf, Dawood, 2018. "The Interlinkage between Social Exclusion and Financial Inclusion: Evidence from Pakistan," Policy Papers 2018-1, The Islamic Research and Teaching Institute (IRTI).
    27. Demirguc-Kunt,Asli & Klapper,Leora & Singer,Dorothe, 2017. "Financial inclusion and inclusive growth : a review of recent empirical evidence," Policy Research Working Paper Series 8040, The World Bank.
    28. Tarsem Lal, 2018. "Impact of financial inclusion on poverty alleviation through cooperative banks," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(5), pages 808-828, May.
    29. Kabakova, Oksana & Plaksenkov, Evgeny, 2018. "Analysis of factors affecting financial inclusion: Ecosystem view," Journal of Business Research, Elsevier, vol. 89(C), pages 198-205.
    30. Jerry Buckland, 2018. "Building Financial Resilience," Springer Books, Springer, number 978-3-319-72419-5, April.
    31. Jenny C. Aker & Rachid Boumnijel & Amanda McClelland & Niall Tierney, 2016. "Payment Mechanisms and Antipoverty Programs: Evidence from a Mobile Money Cash Transfer Experiment in Niger," Economic Development and Cultural Change, University of Chicago Press, vol. 65(1), pages 1-37.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Einas Elabbasy & Ahd Bakr, 2024. "Educational level as a modified variable to the relationship between microfinance services marketing and attracting customers’ attention in Egyptian banks," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(2), pages 423-439, June.
    2. Rayenda Khresna Brahmana & Maria Kontesa & Josephine Tan-Hwang Yau, 2024. "Does information seeking moderate the relationship between financial loan inclusion and Fintech P2P lending?," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(1), pages 171-185, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Raksmey, Uch & Lin, Ching-Yang & Kakinaka, Makoto, 2022. "Macroprudential regulation and financial inclusion: Any difference between developed and developing countries?," Research in International Business and Finance, Elsevier, vol. 63(C).
    2. Shahid Manzoor Shah & Amjad Ali, 2022. "A Survey on Financial Inclusion: Theoretical and Empirical Literature Review," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 310-330, December.
    3. Vanesa Pesqué‐Cela & Lihui Tian & Deming Luo & Damian Tobin & Gerhard Kling, 2021. "Defining and measuring financial inclusion: A systematic review and confirmatory factor analysis," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(2), pages 316-341, March.
    4. Peterson K. Ozili, 2021. "Financial inclusion research around the world: A review," Forum for Social Economics, Taylor & Francis Journals, vol. 50(4), pages 457-479, October.
    5. Josephat Lotto, 2022. "Understanding financial inclusion in East Africa: How does Tanzania compare?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 1075-1084, January.
    6. Thereza Balliester Reis, 2022. "Socio‐economic determinants of financial inclusion: An evaluation with a microdata multidimensional index," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 587-611, April.
    7. Shruti Malik & Girish Chandra Maheshwari & Archana Singh, 2019. "Understanding Financial Inclusion in India: A Theoretical Framework Building Through SAP–LAP and Efficient IRP," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 20(2), pages 117-140, June.
    8. Gallego-Losada, María-Jesús & Montero-Navarro, Antonio & García-Abajo, Elisa & Gallego-Losada, Rocío, 2023. "Digital financial inclusion. Visualizing the academic literature," Research in International Business and Finance, Elsevier, vol. 64(C).
    9. Grohmann, Antonia & Klühs, Theres & Menkhoff, Lukas, 2018. "Does financial literacy improve financial inclusion? Cross country evidence," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 111, pages 84-96.
    10. Mario Arias-Oliva & Jorge de Andrés-Sánchez & Jorge Pelegrín-Borondo, 2021. "Fuzzy Set Qualitative Comparative Analysis of Factors Influencing the Use of Cryptocurrencies in Spanish Households," Mathematics, MDPI, vol. 9(4), pages 1-19, February.
    11. Betgilu Oshora & Goshu Desalegn & Eva Gorgenyi-Hegyes & Maria Fekete-Farkas & Zoltan Zeman, 2021. "Determinants of Financial Inclusion in Small and Medium Enterprises: Evidence from Ethiopia," JRFM, MDPI, vol. 14(7), pages 1-19, June.
    12. Masoud Mohammed Albiman & Hamad Omar Bakar, 2022. "The Role of Financial Inclusion on Economic Growth in Sub Saharan African (SSA) Region," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(4), pages 363-384, October.
    13. Shrabani Mukherjee & Subhadri Sankar Mallik & Debdulal Thakur, 2019. "Tracking Financial Inclusion in India: A Study of SHG Initiatives," Indian Journal of Human Development, , vol. 13(1), pages 32-46, April.
    14. Kala Kamdjoug, Jean Robert & Wamba-Taguimdje, Serge-Lopez & Wamba, Samuel Fosso & Kake, Ingrid Bive'e, 2021. "Determining factors and impacts of the intention to adopt mobile banking app in Cameroon: Case of SARA by afriland First Bank," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    15. Gupta, Suraksha & Kanungo, Rama Prasad, 2022. "Financial inclusion through digitalisation: Economic viability for the bottom of the pyramid (BOP) segment," Journal of Business Research, Elsevier, vol. 148(C), pages 262-276.
    16. Guillermo Boitano & Deybi Franco Abanto, 2020. "Challenges of financial inclusion policies in Peru," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 12(1), pages 89-117, June.
    17. Gbêtondji Melaine Armel Nonvide & Alastaire Sèna Alinsato, 2023. "Who uses mobile money, and what factors affect its adoption process? Evidence from smallholder households in Cote d’Ivoire," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(1), pages 117-127, March.
    18. Patrick-Hervé Mbouombouo Mfossa, 2019. "Mobile Money-Driven Financial Inclusion and Financial Resilience in Sub-Saharan Africa: Insights from Cameroon [L’inclusion financière via le mobile money et résilience financière en Afrique Subsah," Post-Print hal-03622403, HAL.
    19. Kouladoum, Jean-Claude & Wirajing, Muhamadu Awal Kindzeka & Nchofoung, Tii N., 2022. "Digital technologies and financial inclusion in Sub-Saharan Africa," Telecommunications Policy, Elsevier, vol. 46(9).
    20. Kuldeep Singh & Madhvendra Misra & Jitendra Yadav, 2021. "Corporate social responsibility and financial inclusion: Evaluating the moderating effect of income," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(5), pages 1263-1274, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jofsma:v:26:y:2021:i:2:d:10.1057_s41264-020-00085-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.