All About the State : Fifty Years of Innovative Technology to Deliver an Inclusive Financial Sector

This paper documents the long-term nature of technological innovations which have transformed retail finance and addressed financial exclusion. The paper also contributes to the body of literature on the state as an entrepreneur. The roots of financial inclusion are traced back to the 1960s with a discussion of the role played by the state, in contrast to that of the private sector and disruptive innovation. The case of the world-recognized mobile payment service M-Pesa is then examined. This service, aimed at expanding access to retail financial markets to the previously ‘un-banked', is credited with transforming access to financial services in Africa. The empirical results suggest that the state was actively involved in the development and deployment of applications of information and communication technologies which led to M-Pesa. This study provides support for policies that promote mobile banking technology as a means of enhancing financial inclusion. The study also confirms that public-private partnerships, together with an enabling regulatory environment, facilitate technological innovation