Regulatory hurdles hurting m-pesa growth

NEW DELHI: Regulatory hurdles and lack of financial inclusion awareness are pulling back mobile money growth in the country, Vodafone India has said.

Awareness about financial inclusion and financial literacy needs to be intensified. Stakeholders, including the regulators and policy makers, should launch large scale awareness programs, Suresh Sethi, business head, Vodafone m-pesa, was quoted as saying to a publication.

Through the Pradhan Mantri Jan Dhan Yojna, the government is pushing for greater financial inclusion by bringing in nearly 40% of population under comprehensive financial cover through banking accounts, while more that 10-crore physical bank accounts have been opened so far.

"The current policy does not allow direct benefit transfers (DBT) from Centre and state governments to be credited to semi-closed wallets while banks are currently being pushed to open accounts through alternate channels like business correspondents due to absence of bank branches in India's rural pockets," Sethi said.

He also added that a collaborative approach between the telecom service providers, banks and other stakeholders is required for the growth of mobile money.

Vodafone India launched its m-pesa services in April 2013 in India. Vodafone's more than 2 million m-pesa customers with nearly 65% rural footprint, predominantly use money transfer services, followed by utility payments and prepaid recharges.

However, Vodafone has not applied for payment bank license, the last date for application for which was February 2.