Dealing with a decentralized structure with a centralized plan: the political economy of the financial inclusion through Mobile Payment Services in Sudan
Khalid O. M. Ahmed (The Islamic Development Bank (IsDB) Group)
Paper short abstract:
It analyses the progress of the mobile payment service (MPS) and provides a historical development of the government's policies that aim to regulate it.It shows the structural challenges that hinder the enhancement of financial inclusion through MPS and proposes policies to settle incompatibilities
Paper long abstract:
The mobile payment service was launched in early September 2016 by the Head of the State and the Governor of the Central Bank of Sudan (CBS). At that time, the Governor of the CBS stated that the service would help achieve financial inclusion. However, till December 2018 and after more than two years, the CBS has failed to achieve widespread adoption of this service, as recently declared by the Minister of Telecommunications and Technology: "The mobile payment services still at square one and haven't taken off in Sudan yet!". This study analyses the progress of the mobile payment service and provides a historical development of the government's policies that aim to regulate this service. It also investigates, using the methodology of analysis and comparison, the differences between the business model for the mobile payment service that adopted by the CBS and the business model for the airtime/balance transfer service that has been using by the telecommunications company. Moreover, it shows the main challenges that are hindering the enhancement of financial inclusion through mobile payment service and argues that the main structural reason behind the failure in achieving widespread adoption of the mobile payment service is the incompatibility between the centralized business model that has been adopted by the CBS and the decentralized structure of dealers'/agents' network that work in the airtime/balance transfer service. Finally, the study proposes policies to settle the incompatibilities, and ensure fair competition.
- Justice, peace and rights