Driving Financial Inclusion Through Frugal Innovation to Achieve UN SDG Target 8.10

Traditional banking solutions have not succeeded in creating financial inclusion for the unbanked. Mobile money services, through which telecommunications companies offer financial services through a mobile phone number, increase the accessibility of financial services. For that reason, the proportion of adults with mobile money accounts is one indicator of success for Sustainable Development Goal Target 8.10, which seeks to “strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all.” M-Pesa is the world’s first mobile money service, which was born of frugal innovation and increased financial inclusion in East Africa. Through a case study M-Pesa in Kenya, this chapter demonstrates how approaching financial inclusion from the perspective of frugal innovation generates high-value solutions to help meet Sustainable Development Goals (SDG) 8 and Target 8.10. Frugal innovation, an innovation management mindset that reduces complexity and resource use, subverts the traditional model and trades highly structured and expensive research and development for flexible and inclusive adaptation. As efforts to develop more inclusive financial systems increase, the discipline can be transformational for both developing and developed markets.