The Role of Rural Banks in Providing Mobile Money Services to Rural Poor Communities: An effective integration approach of Rural Banks and existing mobile communications infrastructure

The rapid spread of mobile phones means that the number of mobile users may already exceed the number of banked people in many low income countries. Mobile phones can also offer a communications channel for initiating and executing on-line financial transactions. This channel may not only reduce the cost of financial transactions for provider and customer, but also allow new entrants to the financial sector, and new relationships to be formed for distributing services. These changes hold the prospect of accelerating access to financial services on the back of the mobile infrastructure. Mobile telephony offers tremendous promise to facilitate the flow of money among rural and poor families at much lower transaction costs, bringing the bank to those currently unbanked. Realizing this promise will require close collaboration among all stakeholders. But most rural banks do not have mobile banking services for their customers. This made it difficult for the full potential and benefits of mobile money financial services to be realized. Most telecommunication service providers run mobile money service solely for their subscribers without an integrated approach of incorporating and integrating rural banking systems into their existing services this makes it difficult for a full fledge exploitation of the mobile financial market. This paper looks at the existing mobile money services and takes critical look at the positive advantages of effective integration approach of Rural Banks and existing mobile communications infrastructure as well as proposing a model for such integration.