Francesc Prior and Javier Santomá take another step forward in their research project on the development of sound and efficient models for creating sustainable financial systems in developing countries.
The study by the two IESE professors started with the hypothesis that the problems involving access to financial services in both developing countries and certain developed countries are fundamentally due to inefficient use of supply models. The distribution model normally used by financial institutions in commercial banking is based on products, distribution networks and risk-analysis methodologies that are simply too expensive for the poorest members of the population. US, Morocco, Philippines, South Africa, Kenya, Colombia and Mexico are among the economies chosen for the analysis.
The researchers from CIIF have been gradually presenting papers (http://insight.iese.edu/es/doc.asp?id=863&ar=6) containing their research conclusions. They are now taking a step further to review the experiences of those countries that base their model on a combination of prepaid platforms and cell phones. The current objective of their research is to analyze and test out the viability and efficiency of these models as a system for providing banking access.
The use of prepaid cards allows for the use of risk-monitoring mechanisms that are capable of guaranteeing low default rates. This combination of using prepaid platforms as products, and cell phones as a transaction and distribution channel, is referred to as a mobile-banking business model.
