The paper "Money and Banking in Developing Countries" is a good example of a macro & microeconomic essay. Recent times have to see other major global transformations that have impinged on the finance sector in the developing countries. The use of information technology, for the most part, mobile telephony has had a major impact on money and banking in the developing world. Also, the role of central banking in developing countries has been a focus and has informed a lot of research work. Apparently, central banks in developing countries have an expanded role, which is more of a developmental role.
Then there are the challenges that bedevil the finance sector in the developing countries apropos the deepness and extensiveness of the sector (Alampay & Bala, 2010: 77). These issues form the focus of this paper. In the first part, I focus on the novel and phenomenal development of mobile banking in developing countries. Then, the paper delves into the role of central banks in developing countries. Finally, I focus on the challenges facing money and banking in developing countries. Mobile Banking Before the emergence of mobile telephones, the banking levels in developing countries were down low.
Mainstay banking in developing countries was limited given that the development of branches proved to be an expensive venture. Most parts of developing countries are not easily accessible. Internet banking could as well not penetrate the market in developing countries seeing as few people have access to computers and internet connectivity is limited. Therefore, a lot of people in developing countries could not access banking services (Haas et al. , 2010: 34). The emergence of mobile phones led to the innovation of mobile banking that seemed to work well in developing countries.
This is mainly because mobile banking is not physical in nature therefore people can draw on their mobile phones to access essential financial services. Mobile phones host applications that support basic functions, such as short text messaging which enables what has come to be known as 'mobile banking' to store and transfer money. The first formal mobile banking services were introduced in the Philippines in 2010 (Alampay & Bala, 2010: 79).
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