Financial inclusion is rising rapidly. According to the World Bank, globally, 69 per cent of adults or 3.8 billion people held an account at a financial institution in 2017, up from 62 per cent in 2014 and 51 per cent in 2011. Mobile money has played a significant role in accelerating financial inclusion [1].

However, 1.7 billion people are still financially excluded [1]. A significant number of these reside in rural areas; many are women, less educated and belong to the poorest 40 per cent of population. Therefore, regulators, mobile money providers, financial institutions and government agencies require redoubled efforts to bring these sections into the formal financial ecosystem. This article identifies five strategies to extend the penetration of mobile money in rural areas.

 1. Adopt a Flexible Approach to Customer Registration and the Know Your Customer (KYC) Process:

Many customers in rural areas do not possess formal identification and KYC documents, thus restricting access to mobile money services. Regulators require adopting a flexible approach to the KYC process for these consumers, to accelerate growth of mobile money in rural areas. Regulators ought to consider facilitating a tiered KYC model, where users with none and a limited number of KYC documents can access mobile money services, but with lower transaction limits.  The tiered KYC model aptly manages risk by balancing transaction limits and availability of customer data.

Regulators should also consider permitting alternative documents for registering rural consumers without documents. These could include a reference letter from the head of the village or local employer, ration card, voter card et al. For women without any identification documents, their husband’s identification document, along with proof of marriage can be used. Regulator can permit mobile money providers to run mass consumer registration roadshows in small and remote villages under regulatory supervision, where the head of the village or regional representatives can be present to identify villagers belonging to that area.

One third of the unbanked adult population, including many in rural areas, especially women do not own mobile phones. In such cases, handset financing has come to the fore as a viable solution. Mobile money providers can provide a handset and SIM card to consumers and register them for both, SIM and mobile money service simultaneously. The subscribers require paying a minor subscription fee and can pay the remaining amount in installments over the next few years. Blocking of the mobile phone, in case of non-payment of installments, can compel subscribers to pay installations on time.

 2. Focus on Expanding the Rural Mobile Money Agent Network and Making the Business Viable

According to a World Bank report, the mobile money agent network in Malawi is skewed towards urban and semi-urban areas. 77 per cent of mobile money agents are located in urban and semi-urban areas, while only 33 per cent of agents operate in rural areas [2]. This is similar to many other countries. Clearly, mobile money providers require more efforts in expanding the mobile money agent network in rural areas.

Technology and data analytics can help in intelligently extending the agent network in rural areas. Mobile money providers can analyze data pertaining to voice calls, mobile money transactions, and the current location of agents, to identify high activity areas such as rural business centers, trading zones near highways, border towns, etc, which require more agents. They can also identify remote and less populated areas with decent mobile penetration but low mobile money activity and place agents at these unserved points.

Agents in high activity rural areas usually obtain good business but are troubled by their inability to quickly replenish float (e-money) like in urban areas. On other hand, in remote and sparsely populated areas, agents are sometimes unable to sustain the business, owing to the low number of transactions or unavailability of cash due to more cash-outs than cash-ins. Hence, mobile money providers have to take special measures to ensure viability of agents business in rural areas. For example, EcoCash in Zimbabwe has set a much lower float and cash limit to start an agency business for rural agents, compared to urban agents (See exhibit 1) [3].

To make the mobile money agency business viable in rural areas, service providers can opt for ‘location-based commission structure’, offering higher commissions to rural agents in remote and sparsely populated area with a low number of transactions.

To overcome float challenges, mobile money providers are offering float loans to their agent. The amount of float loans depends on the credit score of the agent, which is based on their transaction history and age on network. Mobile money providers can also provide loans to potential rural agents who are unable to start the agency business, due to high float or cash requirement.

Mobile money providers are also experimenting with predictive analytics to improve float and liquidity management. Based on the agent’s transaction data, the volume of customers at a location, float balance, cash balance (can be recorded by agent on regular basis and fed into a predictive analytics system), mobile money provider can predict an agent’s float and cash requirement on a daily, weekly and monthly basis.

3. Create Tailored Services for the Rural Segment

‘One size fit all’ services might not work for rural customers. Mobile money providers need to understand how rural customers earn, transact, save and borrow to create tailored product suited to their financial needs. For example, owing to the lack of an affordable formal financial infrastructure, community-based cash-centric financial organizations such as savings clubs, village savings and loans association (VSLAs), SACCOs and burial societies are popular in rural areas. Mobile money providers are digitizing these cash-based organizations and connecting them to mobile money. This is aimed at bringing the benefits of digital payments to these conventional financial systems such as security, transparency and interest generation.

Mobile money providers are experimenting with multiple need-based services for the rural population, such as, crop insurance for small-holder farmers, digitizing payments in supply chain for small agro-business, insurance for pregnant women to reduce maternal mortality, paying transportation fee for patients and enabling them to travel easily, digitizing birth registration and related payments in remote areas, loans for rural SMEs, et all. These services might cater to a niche segment, but will go long way in increasing mobile money adoption and usage in rural areas.

 4. Leverage the ‘Location’ to Craft a Differential Pricing Strategy for Rural Areas

Disposable income in rural areas tends to be lower than urban areas. Hence, rural customers are generally more price sensitive, which mobile money providers need to consider while designing a pricing strategy. ‘Location’ can be an important tool in pricing. To encourage mobile money adoption in rural areas, service providers can set lower service charges on cash-out and bill payments in rural areas, compared to urban areas. Similarly, the service charge levied by merchants, whilst executing a transaction in rural areas should be less than in urban areas. In case of mobile savings accounts, higher interest should be given to rural customers. Governments and regulators should also think about setting lower taxes on mobile money transactions in rural areas.

5. Impart Financial Education to Make Mobile Money Services a Success

Mobile money services have to be promoted with adequate information to make them successful. For example, along with launching a mobile money-based savings club service, mobile money providers need to partner with NGOs or deploy agents to execute several tasks as well. These include working with traditional savings groups, explaining the service to them, describing the benefits of mobile money, demonstrating how to use the service, addressing queries, et all, thus, extending long-term support to enable the members of the savings club to seamlessly evolve from cash to digital.  In villages, mobile money providers have to leverage community leaders, NGOs or deploy mobile money agents to extend information pertaining to finance and the benefits of digitization of financial services in rural areas.

Mobile money providers need to think ‘out of box’ to inculcate healthy financial habits in the rural population. For example, Shwe Toe, a financial and digital literacy application for women in Myanmar, launched by a mobile money provider, is using Gamification to promote healthy financial practices amongst women. The Shwe Toe application uses a game where a young girl’s grandmother presents her with calf, and through different levels of the game, starts and expands her dairy business and eventually purchase a home, thus learning various financial concepts [4].


This article has merely scratched the surface of the options available to expand mobile money services and financial inclusion amongst rural and remote customers. Surely, mobile money providers will usher in multiple innovative ways to conquer this last frontier of financial exclusion.



[1] World Bank Findex:
[2] IT Web Africa:
[3] EcoCash:
[4] FinDev Gateway:

Mohit Bhargava

Mohit Bhargava

Mohit Bhargava has over eight years of work experience in product marketing and research in the telecom domain. At Mahindra Comviva, he is serving as Manager in product marketing for the mobile financial solutions...