Reaching beyond the banked: The impact of mobile phone money transfer on market development in Uganda

Abstract

The convergence of mobile telephony and financial services has the potential to significantly expand access to financial services to individuals at the base of the pyramid.  In Uganda, roughly 80 percent of the population has no access to banking services, and mobile phone money, a financial service and transaction made on a mobile phone could address this financial gap. The focus of this phenomenological study was to explore the impact of mobile phone money on market development in Uganda, in particular, from the experiences of 4 Mobile Network Operators, 8 agents, and 19 users.  The main question for this research was: What is the influence of mobile phone money on market development in Uganda? The conceptual framework for this study was based on Kim and Mauborgue’s concept of Blue Ocean Strategy. Key findings revealed that mobile phone money had significant impact on the users and on market development. The most used mobile phone money service was transfer of money to relatives and friends. Over 2 million adults who were previously unbanked are accessing financial services using their mobile phones. The main conclusion from this study is that mobile phone money has provided a more efficient channel for financial transaction and inclusion in Uganda. Further research should focus on: the extent to which Mobile Phone Money is used to transfer funds from rural areas to urban centres.

Keywords: Base of the pyramid, market development, mobile phone money transfer, phenomenological study, Uganda