For clients to fully benefit from mobile financial services, however, access to a physical office that deals in cash remains critical. When researchers studying the M-Pesa program in Kenya cross-referenced the locations of M-Pesa agents and the locations of households in the program, they found that the closer a household was to an M-Pesa kiosk, where cash and customer services were available, the more it benefited from the service. Beyond a certain distance, it becomes infeasible for clients to use a given financial service, no matter how much they need it.
Meanwhile, a number of studies have shown that increasing physical access points to the financial system can help lift local economies. Researchers in India have documented the effects of a regulation requiring banks to open rural branches in exchange for licenses to operate in more profitable urban areas. The data showed significant increases in lending and agricultural output in the areas that received branches due to the program, as well as 4–5 percent reductions in the number of people living in poverty. A similar study in Mexico found that in areas where bank branches were introduced, the number of people who owned informal businesses increased by 7.6 percent. There were also ripple effects: an uptick in employment and a seven percent increase in incomes.
In the right hands, then, access to financial tools can stimulate under served economies and, at critical times, determine whether a poor household is able to capture an opportunity to move out of poverty or weather an otherwise debilitating financial shock. Thanks to new research, much more is known about what types of features can do the most to improve consumers’ lives. And due to the rapid proliferation of cell phones, it is now possible to deliver such services to more people than ever before. Both of these trends have set the stage for yet further innovations by banks, cell-phone companies, microlenders, and entrepreneurs -- all of whom have a role to play in delivering life-changing financial services to those who need them most.