More than 2 billion people in the world remain unbanked, without any access to affordable, safe and secure financing services. They donÔÇÖt have access to the financial services they need to protect their assets and invest in their livelihoods.

The conventional bricks-and-mortar system of banking is too expensive for the poor, especially in rural areas. However, over one billion people in these markets have a mobile phone, which means that they have existing infrastructure that can be used to provide financial services such as transfers, savings, loans, payments and insurance.

Did you know that many people who live in the heart of Silicon Valley are still dependent on a piece of plastic that they have to carry around? From groceries to gas, they pay with their credit cards.

However, about 9,000 miles from the Silicon Valley is Kenya, a widely adopted and advanced mobile money service has exploded. Unlike in the United States where people are just beginning to adapt to mobile money, you donÔÇÖt need a credit card or smartphone in Kenya to use mobile money. In Kenya, two out of every three adults use mobile money.

Across Africa, many people-from hard-up villages to urban star-ups-are now planning, saving, accessing loans and spending through mobile money services. And experts believe that poverty reduction and growth will follow if risks are managed.

Collecting and depositing money at kiosks and sending money via mobile phones has become a natural solution for many African countries where there are no roads and infrastructure, distances are long and very few people have access to bank accounts.

Substantial Potential

According to the IMF, the possibility to further financial development in the continent is ÔÇ£substantialÔÇØ and more access to banking services could contribute of an additional 1.5% annual growth.

Payments systems in African such as M-PESA in Kenya, Orange Money in West Africa and L-PESA in several nations have become very popular where vast majorities lack financial and physical access to conventional banking services.

The earnings of Kenyan households using SafaricomÔÇÖs M-PESA have risen by 5-30% since they started using mobile money services, according to a recent study.

About 11% of Africans are using mobile money, according to the IMF, rising 60% in Kenya.

Kenya, Uganda and Tanzania lead the way in East Africa, whereas Ivory Coast leads on the west of the continent, where 25% of the citizens use mobile money.

Parallel System

The enthusiastic adoption of mobile money by African nations evolved from just a means of transferring money into a parallel system of micro-payments, from personal and business to saving accounts.

Mobile money has made it possible for people who never saved a dollar to put some money aside. There is a distinct relationship between economic growth and financial development and poverty reduction.

In Afghanistan, police salaries are paid via mobile money and many people around the world are continuing to understand its benefits.

Empowering Women

According to CNN, women are reinvesting about 90% of their income in their families when compared to 30-40% of men. This means that mobile money can be used to empower women in communities, especially in regions where women canÔÇÖt interact with men or travel for long distances because of cultural and social barriers. Mobile money offers a platform for household security and financial independence.

Given all the benefits, why is mobile money not very popular? Well, itÔÇÖs because money has been impeded by banks which believe that it will eat their lunch, and also regulators who worry that these services will be abused by money-launders and fraudsters.

Effective and supportive regulation is very important in enabling mobile money providers to reach people who need the services in various nations around the world. Perhaps one of determinants of the long-term success of mobile money is an open field that allows mobile operates and non-bank mobile money services to enter the market.

The financial and mobile industries need to work together and with regulators to create a transformative impact of mobile money.