## 1. Mobile Money Usage Patterns: Evidence from M-Pesa Transactional Data

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### Introduction: context and motivation
- The fast pace of economic digitalization in the financial sector is changing access and use of financial services and creating new data needs for policy analysis.
- Mobile money is a financial service using mobile money accounts typically offered by a mobile network operator (MNO) or an entity in partnership with an MNO; a bank account is not required and a basic mobile phone suffices.
- Mobile money has expanded financial inclusion in low- and middle-income economies and is prominent in Africa while also growing in Asia and Latin America.
- As of 2019, there are more than a billion registered mobile money accounts over which close to USD 2 billion transactions take place daily.
- The COVID-19 pandemic increased the need to track mobile money because it can facilitate low-contact transactions supporting economic activity.
- Key policy question: how should mobile money be captured in monetary aggregates such as broad money under the IMF’s Monetary and Financial Statistics Manual and Compilation Guide (MFSMCG)?

### Data sources and scope
- Analysis draws on the IMF’s Financial Access Survey (FAS), a supply-side database covering access and use of financial services across 189 jurisdictions with data spanning over 15 years.
- The FAS launched in 2009 and introduced a mobile money module in 2014; historical mobile money data in the FAS date back to 2007.
- The FAS collects administrative data from regulators of mobile money service providers.
- As of 2020, 79 countries (about 90 percent of countries that have mobile money services) report mobile money data to the FAS.
- The FAS mobile money module collects seven series that produce ten indicators of mobile money.

### FAS mobile money indicators (as presented)
- Access
  - Registered mobile money agent outlets per 1,000 km²
  - Registered mobile money agent outlets per 100,000 adults
  - Active mobile money agent outlets per 1,000 km²
  - Active mobile money agent outlets per 100,000 adults
- Adoption
  - Registered mobile money accounts per 1,000 adults
  - Active mobile money accounts per 1,000 adults
- Usage
  - Value of mobile money transactions, percentage of GDP
  - Number of mobile money transactions per 1,000 adults
  - Outstanding mobile money balance on active accounts, percentage of GDP
  - Average number of transactions per active mobile money account

### Stylized facts from the FAS: access, adoption, and usage
- Access
  - Mobile money agent networks often provide more access points than traditional banking infrastructure (ATMs, commercial bank branches, and non-branch retail agent outlets) in many low- and middle-income countries.
  - Examples:
    - In Guinea, as of 2019, for each commercial bank branch, there are 174 mobile money agents.
    - In Mali, as of 2019, for every commercial bank branch, there are close to 100 mobile money agents.
- Adoption
  - Several low- and middle-income countries have more registered mobile money accounts than bank deposit accounts; this pattern is more pronounced in low-income countries.
  - In middle-income countries, mobile money tends to play a complementary role to traditional commercial banking.
- Usage
  - Mobile money transaction values and volumes have increased significantly over the last decade in many economies.
  - Comparisons use the period 2013-19 to show growth in average number of mobile money transactions per adult and total value of mobile money transactions as percentage of GDP.
  - Outstanding balances on active mobile money accounts have risen over time, suggesting use of mobile money as a store of value beyond payments.

### New roles and product expansion
- Mobile money is evolving beyond payments to include credit, interest-earning savings, and insurance in some markets through partnerships with banks, microfinance institutions, and insurance firms.
- Early-adopter examples:
  - Kenya and Tanzania offer loans/microcredit via mobile money providers (e.g., Safaricom/Vodafone partnerships).
  - Banking partners may use mobile money usage history to develop credit scores, assign credit limits, and determine loan decisions.
  - Kenya examples include M-Shwari (Safaricom microcredit service) and KCB savings services enabling M-Pesa customers to earn interest.
- Data signal: outstanding mobile money balances as a percent of GDP increased across select countries during 2013-19 (2019 data not available for Cameroon and Ghana in the FAS sample noted).

### Transaction-level evidence (M-Pesa sample)
- Data source: anonymized transactional data for 418 M-Pesa accounts belonging to low-income users in Nairobi, July 2017–August 2018 (CGAP dataset collected by the Busara Center for Behavioral Economics).
- Key findings from the sample:
  - Account penetration and usage
    - All mobile money accounts carried out at least one or more person-to-person (P2P) transactions during the sample period.
    - Share of total mobile money transactions that are P2P: about 28 percent.
    - Average value of P2P transaction: USD 6.7.
  - Business transactions
    - Share of total mobile money transactions that are B2B and P2B: about 23 percent.
    - Account penetration: more than 85 percent of accounts in the sample engaged in B2B/B2P transactions.
    - Evidence indicates M-Pesa is used to pay salaries.
  - Credit, savings, insurance
    - Close to 50 percent of the accounts have been used for additional financial services such as M-Shwari loans (reported under “Derivatives”).
  - International remittances
    - Share: small (not quantified), but average value much higher.
    - Average value of international remittance: USD 85.
    - Comparative magnitude: USD 85 is more than ten times an average domestic P2P transfer.
    - Accounts receiving international remittances carry average balances 50 percent higher than the average of those that do not receive them.
- Analytical insight: roughly half of the M-Pesa accounts in the study have been used for new services such as loans and interest-bearing savings.

### Measurement and statistical implications (overview from introduction and Boxes)
- MFSMCG guidance: mobile money liabilities (outstanding balances in mobile money accounts) need to be included as part of broad money.
- Practical compilation depends on mobile money business models and regulatory frameworks.
- MNO-led model characteristics and implications:
  - Regulations typically require MNOs to keep 100 percent of their mobile money liabilities in liquid assets, commonly deposits at the central bank or regulated financial institutions, or in some jurisdictions invested in sovereign securities or other permitted assets.
  - Case 1: MNOs hold customer funds as deposits at regulated financial institutions (ODCs) or at the central bank — then outstanding mobile money balances are reflected in SRF-2SR or SRF-1SR respectively.
  - Restricted (escrow/custodial) accounts are classified as “restricted deposits” (a type of nontransferable deposit) and are excluded from broad money unless compilers separately cover them for inclusion where appropriate.
  - MFSMCG requires accrued interest to be included in outstanding amounts; interest earned on MNO deposits is therefore included in monetary statistics when those deposits are recorded in the banking system.
  - Examples of interest pass-through practices:
    - Tigo Pesa (Tanzania) passed on interest to customers.
    - Bank of Ghana required MNOs to pass on at least 80 percent of interest earned to customers.
    - In Kenya, interest on MNOs’ trust accounts are applied to corporate social responsibility (CSR) activities.
  - Case 2: MNOs invest mobile money liabilities in sovereign securities or other permitted assets — these holdings may not appear in SRF reports for banks or the central bank; compilers may need to collect MNO balance sheet information and consider including it in aggregated ODC balance sheets or include mobile money via SRF-5SR.
  - If regulatory requirements to maintain 100 percent backing are not fully implemented or enforced, countries are encouraged to collect data from MNOs for inclusion in broad money calculations.
- Bank-led model characteristics and implications:
  - Banks pool and store funds from mobile money customers in a single account; as long as these balances are accounted for in banks’ books as customer deposits or e-money accounts they are classified as transferable deposits and feed into broad money without separate data collection.
- Options for compilers when mobile money liabilities are not captured in SRFs:
  - Assess if MNOs can be considered ODCs and include their balance sheet in SRF-2SR (criteria include quasi-corporation characteristics and availability of separate accounts).
  - Report mobile money as additional components of broad money using SRF-5SR to capture deposits not reflected in SRF-1SR/SRF-2SR/SRF-4SR.
- Effect on broad money composition:
  - Mobile money can change composition of broad money without impacting its size: increased mobile money use tends to reduce currency in circulation and increase deposits with the banking system when mobile money balances are accounted as transferable deposits with banks.
  - Empirical note: Kipkemboi and Bahia (2019) find a negative growth of the ratio of currency outside the banking sector to broad money in select countries (Kenya, Uganda, Ghana and Rwanda), suggesting cash use has declined while bank deposits have increased.
  - Outstanding mobile money balances remain small relative to transferable deposits and currency in most countries; they are a mere fraction of deposits at commercial banks.
- Statistical recommendations:
  - Collect balance sheet information from MNOs where mobile money liabilities are not captured in bank or central bank reports.
  - Distinguish between deposits of customer funds from mobile money in banks and other types of bank deposits where relevant.
  - Monitor mobile money developments given implications for financial inclusion and monetary aggregates.

### Institutional units and sectors (Box 3 highlights)
- SNA 2008 divides Financial Corporations into nine subsectors; MFSMCG groups subsectors (2) deposit taking corporations except the central bank and (3) money market funds into Other Depository Corporations (ODCs).
- Definitions used for monetary statistics:
  - ODCs: financial corporations that issue liabilities (accept deposits) included in broad money (typical constituents: commercial banks, credit unions, savings banks, microfinance institutions, and money market funds).
  - Depository Corporations (DCs): central bank and ODCs.
  - Other Financial Corporations (OFCs): insurance corporations, pension funds, non-money market investment funds, and other financial intermediaries whose liabilities are excluded from broad money.
  - DCs are the primary money issuers; OFCs, NFCs, households and governments are broad money holders.
- SRFs and data flows:
  - SRF-1SR: central bank sectoral balance sheet
  - SRF-2SR: ODCs sectoral balance sheet
  - SRF-4SR: OFCs sectoral balance sheet
  - SRF-5SR: DCS-based, additional line items for components of broad money by institutional units other than FCs
  - SRFs present stocks only and are used to compile monetary base and broad money disseminated via the MFS database.
- MFSMCG treatment of e-money/mobile money:
  - E-money is classified as deposits rather than currency; because it is transferable it qualifies as transferable deposits and thus is included in broad money under MFSMCG.
  - Broad money includes instruments that function as a medium of exchange, unit of account, and store of value.

### Additional treatments of mobile money in MFS reporting (Box 5 highlights)
- Two main approaches when mobile money liabilities are not reflected in ODC or central bank balance sheets:
  - (1) Treat MNOs as ODCs (or their mobile money quasi-corporation) and include their balance sheet in SRF-2SR.
    - Quasi-corporation criteria: separate set of accounts including a balance sheet; assets and liabilities separate from owners; self-contained.
  - (2) Include mobile money components in SRF-5SR so that mobile money customer funds held by MNOs are reflected in broad money.
- Bank-led model: when banks account for pooled mobile money customer funds, these are captured in banks’ transferable deposits and no separate data collection is needed.
- Decision flow for compilers (regulatory and data implications):
  - If MNO liabilities are held as deposits at central bank or commercial banks and captured in SRFs, they feed into broad money as transferable deposits.
  - If MNO liabilities are invested in sovereign securities or otherwise not captured, collect MNO balance sheets or use SRF-5SR to include them in broad money.
- Empirical and forward-looking points:
  - Mobile money currently small relative to bank deposits, but rising usage could make its impact on monetary aggregates more pronounced.
  - Continued monitoring and potential statistical distinctions between mobile-money-related bank deposits and other bank deposits may be warranted.

### Annex I. Data Sources for Mobile Money
- The IMF’s Financial Access Survey (FAS) provides supply-side annual country level data on mobile money.
- GSMA sources:
  - Global Adoption Survey: regional annual data, up to 90 countries, regional time series 2001-19, quarterly regional agent/account/transaction series (no individual country-level release).
  - Mobile Money Regulatory Index database: 90 countries, 26 indicators across six dimensions (authorization; consumer protection; KYC; agent network; transaction limits; infrastructure and investment environment), scores 0 to 100.
  - Mobile Money Deployment Tracker: monthly monitoring of live mobile money services globally and product offerings.
- Country-level higher-frequency data examples:
  - Bank of Zambia: monthly data on mobile payment values and volumes since 2012.
  - Central Banks of Kenya, Uganda, and Bangladesh: publish monthly data on series such as number of active mobile money agents and number of mobile money accounts.
  - Bank of Ghana: provides annual information on mobile money features.
- Demand-side data:
  - World Bank Global Findex: triennial surveys covering 140 economies, roughly 1,000 people per country, includes 12 mobile money series including gender-disaggregated data on mobile money accounts.
- COVID-19 policy trackers:
  - IMF’s Financial Access COVID-19 Policy Tracker: documents policy measures supporting SME financing and digital financial services including mobile money; categorizes responses into (i) temporary waiver of transaction fees; (ii) temporary increase of transaction and balance limits; (iii) easing KYC onboarding requirements.
  - GSMA’s Mobile Money COVID-19 Regulatory Response Tracker: documents mobile-money-specific interventions including cash transfer programs using mobile money.

*Source: IMF staff and IMF Financial Access Survey; excerpt from "1. Mobile Money Usage Patterns: Evidence from M-Pesa Transactional Data" (wpiea2021177-print-pdf).*

### 1. Mobile Money Usage Patterns: Evidence from M-Pesa Transactional Data ____________________ 13

### 1. Mobile Money Usage Patterns: Evidence from M-Pesa Transactional Data

### Introduction: context and motivation
- The fast pace of economic digitalization in the financial sector is changing access and use of financial services and creating new data needs for policy analysis.
- Mobile money is a financial service using mobile money accounts typically offered by a mobile network operator (MNO) or an entity in partnership with an MNO; a bank account is not required and a basic mobile phone suffices.
- Mobile money has expanded financial inclusion in low- and middle-income economies and is prominent in Africa while also growing in Asia and Latin America.
- As of 2019, there are more than a billion registered mobile money accounts over which close to USD 2 billion transactions take place daily.
- The COVID-19 pandemic increased the need to track mobile money because it can facilitate low-contact transactions supporting economic activity.
- Key policy question: how should mobile money be captured in monetary aggregates such as broad money under the IMF’s Monetary and Financial Statistics Manual and Compilation Guide (MFSMCG)?

### Data sources and scope
- Analysis draws on the IMF’s Financial Access Survey (FAS), a supply-side database covering access and use of financial services across 189 jurisdictions with data spanning over 15 years.
- The FAS launched in 2009 and introduced a mobile money module in 2014; historical mobile money data in the FAS date back to 2007.
- The FAS collects administrative data from regulators of mobile money service providers.
- As of 2020, 79 countries (about 90 percent of countries that have mobile money services) report mobile money data to the FAS.
- The FAS mobile money module collects seven series that produce ten indicators of mobile money.

### FAS mobile money indicators (as presented)
- Access
  - Registered mobile money agent outlets per 1,000 km²
  - Registered mobile money agent outlets per 100,000 adults
  - Active mobile money agent outlets per 1,000 km²
  - Active mobile money agent outlets per 100,000 adults
- Adoption
  - Registered mobile money accounts per 1,000 adults
  - Active mobile money accounts per 1,000 adults
- Usage
  - Value of mobile money transactions, percentage of GDP
  - Number of mobile money transactions per 1,000 adults
  - Outstanding mobile money balance on active accounts, percentage of GDP
  - Average number of transactions per active mobile money account

### Stylized facts from the FAS: access, adoption, and usage
- Access
  - Mobile money agent networks often provide more access points than traditional banking infrastructure (ATMs, commercial bank branches, and non-branch retail agent outlets) in many low- and middle-income countries.
  - Examples highlighted in the text:
    - In Guinea, as of 2019, for each commercial bank branch, there are 174 mobile money agents.
    - In Mali, as of 2019, for every commercial bank branch, there are close to 100 mobile money agents.
- Adoption
  - Several low- and middle-income countries have more registered mobile money accounts than bank deposit accounts; this pattern is more pronounced in low-income countries.
  - In middle-income countries, mobile money tends to play a complementary role to traditional commercial banking.
- Usage
  - Mobile money transaction values and volumes have increased significantly over the last decade in many economies.
  - Figure comparisons in the text use the period 2013-19 to show growth in average number of mobile money transactions per adult and total value of mobile money transactions as percentage of GDP.
  - Outstanding balances on active mobile money accounts (interpreted similarly to deposits stored as mobile money) have risen over time, suggesting use of mobile money as a store of value beyond payments.

### New roles and product expansion
- Mobile money is evolving beyond payments to include credit, interest-earning savings, and insurance in some markets through partnerships with banks, microfinance institutions, and insurance firms.
- Early-adopter examples:
  - Kenya and Tanzania offer loans/microcredit via mobile money providers (e.g., Safaricom/Vodafone partnerships).
  - Banking partners may use mobile money usage history to develop credit scores, assign credit limits, and determine loan decisions.
  - Kenya examples include M-Shwari (Safaricom microcredit service) and KCB savings services enabling M-Pesa customers to earn interest.
- Data signal: outstanding mobile money balances as a percent of GDP increased across select countries during 2013-19 (2019 data not available for Cameroon and Ghana in the FAS sample noted).

### Transaction-level evidence (M-Pesa sample)
- Transaction-level M-Pesa data for Kenya are available from a CGAP dataset collected by the Busara Center for Behavioral Economics covering July 2017–August 2018.
- Though the sample size is limited, the transaction-level data reveal:
  - Mobile money users are leveraging expanded financial services delivered through mobile money.
  - Roughly half of the M-Pesa accounts in the study have been used for new services such as loans and interest-bearing savings.

### Measurement and statistical implications (overview from introduction)
- The MFSMCG guidance is that mobile money liabilities (outstanding balances in mobile money accounts) need to be included as part of broad money.
- Practical implications for compiling monetary aggregates depend on mobile money business models and regulatory frameworks.
- In most jurisdictions, regulations ensure mobile money is included in monetary aggregates; however, where regulations allow mobile money liabilities to be invested in sovereign securities or other permitted assets, additional data collection and adjustments are required to correctly compile broad money.

*Source: IMF staff and IMF Financial Access Survey, excerpt from "1. Mobile Money Usage Patterns: Evidence from M-Pesa Transactional Data" (wpiea2021177-print-pdf).*

### Box 1. Mobile Money Usage Patterns: Evidence from M-Pesa Transactional Data

### Box 1. Mobile Money Usage Patterns: Evidence from M-Pesa Transactional Data

### Data and scope
- Anonymized transactional data for 418 M-Pesa accounts belonging to low-income users in Nairobi between July 2017-August 2018.
- Transactions were classified into eight main categories using entity recognition and keyword extraction techniques.
- Note: the data may not be nationally representative but provide insights into usage patterns, transaction volumes, and values among low-income users.

### Usage composition and transaction values
- Person-to-person (P2P) transactions:
  - Account of use: all mobile money accounts carried out at least one or more P2P transactions during the sample period.
  - Share of total mobile money transactions: about 28 percent.
  - Average value: USD 6.7.
- Business-to-business (B2B) and person-to-business (P2B) transactions:
  - Share of total mobile money transactions: about 23 percent.
  - Account penetration: more than 85 percent of accounts in the sample engaged in B2B/B2P transactions.
  - Transaction details indicate M-Pesa is used to pay salaries.
- Credit and insurance services:
  - Close to 50 percent of the accounts have been used for additional financial services such as M-Shwari loans (reported under “Derivatives”).
- International remittances:
  - Share: small (not quantified in percentage), but average value much higher.
  - Average value: USD 85.
  - Comparative magnitude: USD 85 is more than ten times an average domestic P2P transfer.
  - Accounts receiving international remittances carry average balances 50 percent higher than the average of those that do not receive them.

### Analytical insights and implications
- Transaction-level data can reveal usage patterns and the penetration of new mobile-money products among low-income users.
- The data corroborate that both public and private sectors increasingly rely on mobile payment services given their low-cost nature.
- New service uptake (credit, insurance) through mobile money platforms is significant among sampled users.
- International remittances, while infrequent, are high-value and associated with higher account balances.

### Policy and research recommendations
- Encourage partnerships with private sector entities including MNOs to gain further insights into mobile money usage; transaction-level data from providers are key.
- Use transaction-level evidence to inform how mobile money—financial services provided by MNOs—is treated in monetary statistics and measured in monetary aggregates.
- Recognize that increasing mobile money usage raises measurement questions for monetary statistics that warrant detailed examination (addressed in subsequent sections).

*Source: IMF staff calculations from CGAP.*

### Box 3. Institutional Units and Sectors in Macroeconomic Statistics

### Box 3. Institutional Units and Sectors in Macroeconomic Statistics

### Institutional classification of corporations
- All corporations are divided into financial corporations and nonfinancial corporations.
- The 2008 System of National Accounts (SNA) divides the Financial Corporations sector into nine subsectors:
  - (1) central bank
  - (2) deposit taking corporations except the central bank
  - (3) money market funds (MMFs)
  - (4) non-MMF investment funds
  - (5) other financial intermediaries except insurance corporations and pension funds
  - (6) financial auxiliaries
  - (7) captive financial institutions and money lenders
  - (8) insurance corporations
  - (9) pension funds
- For monetary statistics, the MFSMCG combines SNA subsectors (2) and (3) into one subsector called Other Depository Corporations (ODCs). All other subsectors except the central bank and deposit taking corporations are collectively known as Other Financial Corporations (OFCs).
- Definitions and sector groupings used for monetary and financial statistics:
  - ODCs: financial corporations that issue liabilities (accept deposits) included in broad money. Typical constituents include commercial banks, credit unions, savings banks, microfinance institutions, and money market funds.
  - Depository Corporations (DCs): consist of the central bank and ODCs.
  - OFCs: include insurance corporations, pension funds, non-money market investment funds, and other financial intermediaries whose liabilities are excluded from broad money.
  - Non-financial corporations (NFCs): corporations or quasi corporations whose principal activity is production of goods and nonfinancial services.
- Functional implication:
  - DCs are the only money issuers in most countries and are considered broad money issuers.
  - OFCs, NFCs, households and governments are considered broad money holders.

### Standardized Report Forms (SRFs) and data flows
- More than 170 countries and territories follow MFSMCG recommendations and report monetary and financial statistics to the IMF using SRFs.
- SRFs corresponding to financial subsectors:
  - SRF-1SR: sectoral balance sheet of the central bank
  - SRF-2SR: sectoral balance sheet of ODCs
  - SRF-4SR: sectoral balance sheet of OFCs
  - SRF-5SR: based on the DCS, contains additional line items for components of broad money by institutional units other than FCs (data reporting not standardized across countries; guidance provided on instruments to include in money aggregates)
- SRFs present stocks only, with primary breakdowns by financial instrument (in order of relative liquidity), then by currency of denomination (domestic and foreign), and finally by counterpart sector (main sectors of the 2008 SNA).
- Analytical surveys derived from SRFs:
  - Central Bank Survey (CBS): liability side structured to show components of monetary base; asset side focuses on financing to non-residents and domestic sectors.
  - Depository Corporations Survey (DCS): liability side shows components of broad money; asset side shows DCs’ claims on non-residents and domestic sectors, linking broad money supply to net foreign assets and net domestic assets.
- SRF data are used to compile and disseminate key monetary aggregates including monetary base and broad money and are disseminated via the MFS database.

### Treatment of mobile money in monetary statistics (MFSMCG guidance)
- MFSMCG definition of e-money: a payment instrument where monetary value is electronically stored on a physical device or remotely at a server representing a claim on the issuer (examples: prepaid cards, mobile wallets, web-based e-money, and mobile money).
- In MFSMCG, e-money is classified as deposits rather than currency.
- Because e-money (including mobile money) can be used for direct payments to third parties, it qualifies as a transferable deposit.
- Transferable deposits are typically included in broad money; therefore, mobile money is included in broad money according to the MFSMCG.
- MFSMCG properties of money referenced: medium of exchange, unit of account and store of value.
- Broad money described as the sum of all liquid financial instruments held by households, businesses etc. that are widely accepted as a medium of exchange, and/or convertible into a medium of exchange at short notice at, or close to, their full nominal value. Currency in circulation and transferable deposits meet the definition of broad money. Nontransferable deposits such as savings deposits, sight deposits, and fixed deposits of short-term maturity are also included if redeemable at full value on request without penalty and satisfy moneyness properties.

### Compilation of mobile money data: practical issues and MNO-led model
- Guidance is clear that mobile money liabilities are transferrable deposits and included in broad money, but actual data compilation varies with business models and regulatory frameworks.
- MNO-led model characteristics:
  - MNOs or entities partnering with MNOs offer mobile money services.
  - Regulations in countries with mobile money typically require MNOs to keep 100 percent of their mobile money liabilities in liquid assets, commonly deposits at the central bank or regulated financial institutions, or in some jurisdictions invested in sovereign securities or other permitted assets.
- Case 1: Mobile money liabilities of MNOs held as deposits at regulated financial institutions
  - When MNOs are required to keep customer funds as deposits at banks (ODCs), the outstanding mobile money balances are reflected on banks’ balance sheets as transferable deposits and are reported in SRF-2SR.
  - When customer funds are kept as demand deposits at the central bank, these appear on the central bank balance sheet and are reported in SRF-1SR.
  - If MNOs have the option to keep funds at either the central bank or ODCs, deposits appear partly in central bank liabilities and partly in banking system liabilities; compilers must avoid double counting mobile money liabilities when calculating broad money.
  - If deposits maintained by MNOs are restricted (escrow or custodial accounts accessible only under conditions), these are considered “restricted deposits” (a type of nontransferable deposit in MFSMCG) and are excluded from broad money. Compilers need to ensure such mobile money liabilities are covered separately for MFS compilation so they can be included in broad money where appropriate (see Box 5 in source).
  - MFSMCG requires accrued interest to be included in outstanding amounts of underlying financial assets or liabilities; interest earned on MNO deposits is therefore included in monetary statistics when those deposits are recorded in the banking system.
  - Examples of country practices regarding interest pass-through:
    - Tigo Pesa (Tanzania) passed on interest to customers.
    - Bank of Ghana required MNOs to pass on at least 80 percent of interest earned to customers.
    - In Kenya, interest on MNOs’ trust accounts are applied to corporate social responsibility (CSR) activities.
- Case 2: Mobile money liabilities of MNOs invested in sovereign securities or other permitted assets
  - In jurisdictions where MNOs may maintain mobile money liabilities via investments in sovereign securities or other permitted assets (examples cited in the source include Malaysia, Philippines, Bolivia, WAEMU member countries), the portion invested in securities is not reflected in SRF reports for banks or the central bank.
  - Compilers may consider collecting balance sheet information of MNOs and including them in the aggregated balance sheet of ODCs to account for the securities-held portion.
  - If regulatory requirements to maintain 100 percent backing are not fully implemented or enforced, countries are encouraged to collect data from MNOs for inclusion in broad money calculations; compilers must review national practices and make necessary adjustments using additional information collected from MNOs.

*Source: MFSMCG.*

### Box 5. Additional Treatments of Mobile Money in MFS Reporting

### Box 5. Additional Treatments of Mobile Money in MFS Reporting

### Overview
- Mobile money liabilities of MNOs may not be reflected in the ODC balance sheet or the central bank balance sheet in some regulatory frameworks; compilers need additional steps to account for these liabilities by collecting balance sheet data directly from MNOs.
- Two main approaches to account for mobile money liabilities in the monetary data reported in SRFs are described: (1) assess if MNOs can be considered ODCs for MFS and include their balance sheet in the sectoral balance sheet (SRF-2SR); (2) report mobile money as additional components of broad money using SRF-5SR.

### Assess if MNOs can be considered ODCs for MFS and include their balance sheet in the sectoral balance sheet (SRF-2SR)
- Classification principle:
  - Sectoring of institutional units is based on economic objectives, functions, and behavior; classification depends on the economic nature of the entity rather than legal status.
  - MFSMCG suggests that electronic money institutions should be classified as an ODC when they are in the business of financial intermediation and accept deposits which are included in broad money (Para 3.137 MFSMCG).22
- Treatment options:
  - MNOs that offer mobile money services can be treated as ODCs for MFS purposes and their balance sheet included in SRF-2SR.
  - If mobile money issuers are established as a separate legal entity from the MNO, the balance sheet consisting of their mobile money activities alone must be included when compiling SRF-2SR.
  - If mobile money is an activity within the MNO and not organized as a separate unit, treatment depends on whether the mobile money business can be treated as a quasi-corporation:
    - Definition and criteria for a quasi-corporation (MFSMCG terminology): an unincorporated enterprise functioning in almost all respects as if incorporated. For sectoring, treated as institutional units separate from owners.
    - Practical conditions for a quasi-corporation: must have a complete set of accounts including a balance sheet of assets and liabilities or be able to produce such accounts; assets and liabilities must be separate from owners; self-contained and independent.
    - If mobile money business of the MNO qualifies as a quasi-corporation, it is to be classified as part of the ODCs.
- Measurement outcome:
  - When an MNO is classified as ODC, balances are included in the aggregated balance sheet for the ODC sector (SRF-2SR). Customer funds are then treated as transferable deposits which will feed into the calculation of broad money.

### Report mobile money as additional components of broad money (SRF-5SR)
- Rationale:
  - MFSMCG guidance on broad money is intended to help compilers determine scope taking into account each economy’s structure; SRF-5SR provides an option to include components of broad money not captured in SRF-1SR, SRF-2SR, and SRF-4SR.
- Use of SRF-5SR:
  - SRF-5SR has the option of including deposits of nonfinancial corporations like MNOs in the broad money calculation.
  - In countries where MNO deposits at the central bank or at banks are restricted and not captured by default broad money calculation, mobile money customer funds with MNOs may be included in SRF-5SR to be reflected as part of broad money.
- Applicability:
  - These additional data collection methods are needed only when mobile money liabilities are not counted in the banking system.

### Bank-led model
- Typical practice:
  - In a typical bank-led model, banks pool and store funds from mobile money customers in a single account rather than opening individual deposit accounts for each customer (Grossman, 2016).
- Statistical treatment:
  - For bank-led mobile money service providers, as long as mobile money customer balances are accounted for in banks’ books either as customer deposits or e-money accounts, these are classified as transferable deposits with banks and feed into the calculation of broad money under MFSMCG.
- Data collection implication:
  - No separate data collection needed for mobile money liabilities when banks already include these balances in their reported transferable deposits.

### How regulation and model affect data and broad money (summary of Figure 6)
- MNO-led model regulatory outcomes and data implications:
  - A: Regulation — Mobile money liabilities of MNOs held as deposits at a central bank or commercial banks; or held as bank deposits or invested in sovereign securities or other permitted assets; or regulations not yet implemented.
  - B: Impact on data — Data collected from central bank and commercial banks on transferable deposits may or may not include mobile money liabilities depending on regulation implementation.
  - C: Additional treatments needed? — If not captured, either assess if MNOs can be considered ODCs and include them in ODC balance sheet (making mobile money liabilities transferable deposits) OR collect data on mobile money liabilities of MNOs directly and include in monetary aggregates (SRF-5SR).
  - D: Reflection in broad money — Transferable deposits with central bank and commercial banks are part of broad money calculation; liquid liabilities of ODCs are part of broad money calculation; SRF-5SR provides option to include components not otherwise captured.
- Bank-led model regulatory outcomes and data implications:
  - A: Regulation — Mobile money liabilities held as deposits at a bank by definition and subject to prudential regulations.
  - B & C: Data collected from commercial banks on transferable deposits include mobile money liabilities; no separate data collection needed.
  - D: Transferable deposits with commercial banks are part of broad money calculation.

### Impact of mobile money on broad money composition
- General effect:
  - Mobile money can change the composition of broad money without impacting its size or volume: as mobile money use increases, currency in circulation will likely decrease while deposits with the banking system will increase since mobile money balances are in most cases accounted for as transferable deposits with banks.
- Empirical findings:
  - Kipkemboi and Bahia (2019) studied the trend of the ratio of currency outside the banking sector to broad money in select countries of Kenya, Uganda, Ghana and Rwanda and find a negative growth of the ratio, suggesting cash use has declined while bank deposits have increased.23
  - Mobile money balances remain small relative to transferable deposits and currency in most countries; outstanding mobile money balances are a mere fraction of deposits at commercial banks (see Figure 7).
- Future considerations:
  - While currently a small part of broad money, as mobile money gains popularity its impact on monetary aggregates may become more pronounced.
  - Statistical compilers may consider distinguishing between deposits of customer funds from mobile money in banks and other types of bank deposits in the future.
  - Continued monitoring of mobile money trends and developments is important given implications for financial inclusion and monetary aggregates.

### Key empirical and descriptive points highlighted in the Box and surrounding text
- MFSMCG reference: Para 3.137 MFSMCG.22
- Empirical study note: "about half of the mobile money accounts in the study being used for such transactions" (transaction-level data from Kenya).
- Comparative data reference year: outstanding deposits with commercial banks and outstanding balance on active mobile money accounts presented as percentage of GDP in 2019 or the latest year available for select countries (Figure 7).
- Footnotes calling attention to broader topics: footnote 23 on cash component of broad money; footnote 24 on IMF (2019b) and ongoing work on digital money including CBDCs.

*Source: IMF staff (Box 5. Additional Treatments of Mobile Money in MFS Reporting, wpiea2021177-print-pdf).*

### Annex I. Data Sources for Mobile Money

### Annex I. Data Sources for Mobile Money

### Overview
- The IMF’s Financial Access Survey (FAS) provides supply-side annual country level data on mobile money.
- Other databases cover qualitative information on policies and higher frequency data at the individual country level.
- This annex summarizes select data sources beyond the FAS.

### GSMA
- GSMA’s annual Global Adoption Survey:
  - Collects data from mobile money service providers and presents mobile money metrics for six geographical regions.
  - Covers up to 90 countries.
  - Does not release data at an individual country level.
  - Includes annual data by region between 2001-19 on the number of mobile money services worldwide.
  - Contains quarterly data by region on:
    - number of registered and active mobile money agents;
    - number of registered and active mobile money accounts;
    - volume and value (in USD) of transactions processed by the industry across different products.
- GSMA Mobile Money Regulatory Index database:
  - Provides information on the mobile money regulatory framework for 90 countries where mobile money services are available.
  - Contains 26 indicators to produce scores for six dimensions of mobile money regulation.
  - The six dimensions covered are:
    - (i) authorization;
    - (ii) consumer protection;
    - (iii) know your customer (KYC);
    - (iv) agent network;
    - (v) transaction limits;
    - (vi) infrastructure and investment environment.
  - Index and indicators are scored ranging from 0 to 100, with a higher score associated with a more enabling regulatory framework.
- GSMA Mobile Money Deployment Tracker:
  - Monitors the number of live mobile money services globally using primary and secondary sources on a monthly basis.
  - Contains information on products offered by mobile money service providers and their partners.

### Country-level and higher-frequency data
- Examples of country-level providers of higher-frequency mobile money data:
  - Bank of Zambia: reports monthly data on mobile payment values and volumes since 2012.
  - Central Banks of Kenya, Uganda, and Bangladesh: publish monthly data on series such as number of active mobile money agents and number of mobile money accounts.
  - Bank of Ghana: provides information on mobile money features on an annual frequency.

### Demand-side data
- World Bank Global Findex:
  - A demand-side data source on financial inclusion.
  - First released in 2012 and updated triennially.
  - Covers 140 economies with data collected through sample surveys of roughly 1,000 people in each country.
  - Covers 12 mobile money series, including gender disaggregated data on mobile money accounts.

### Qualitative data on regulations and policies
- Databases collect qualitative information to supplement quantitative data for monitoring mobile money trends:
  - GSMA Mobile Money Regulatory Index (described above) offers 26 indicators and an overall index score (0 to 100).
  - GSMA Mobile Money Deployment Tracker monitors live services and product offerings monthly.

### COVID-19 policy responses relevant to mobile money
- The COVID-19 pandemic created new data needs, including on policies adopted to facilitate digital financial services and mobile money.
- IMF’s Financial Access COVID-19 Policy Tracker:
  - Documents policy measures adopted in response to the pandemic across the globe to support SME financing and usage of digital financial services, including mobile money.
  - Information collected from publicly available sources and feedback from country authorities.
  - Categorizes policy responses aimed at promoting mobile money usage into three types:
    - (i) temporary waiver of transaction fees;
    - (ii) temporary increase of transaction and balance limits;
    - (iii) easing KYC onboarding requirements.
- GSMA’s Mobile Money COVID-19 Regulatory Response Tracker:
  - Contains information on mobile money specific interventions to support mobile money customers and service providers during the pandemic.
  - Covers a broader set of policy measures, including cash transfer programs using mobile money.

*Source: IMF staff (Annex I: Data Sources for Mobile Money).*

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_Source: https://www.imf.org/-/media/files/publications/wp/2021/english/wpiea2021177-print-pdf.pdf_