Mobile money as a frugal innovation for the bottom of the pyramid – Cases of selected African countries

Abstract

This paper explores the concept of mobile money as a frugal innovation and a business model. While the frugal innovation theory is evolving, frugality addresses three critical issues about social problems, resources constraints and institutional voids. This paper argues that mobile money as a frugal innovation lies at the intersection of social innovation, technological innovation, and institutional innovation. The paper adopted a case study approach allowing for quantitative and qualitative analysis and interpretation of data to explore mobile money adoptions in selected African countries. We drew the study sample purposefully from countries that have witnessed significant adoption of mobile money services. We went on to layer data representing the cost of financial services, distribution or financial services points and financial inclusion rates from the select sub-Saharan African countries on the literature evidence, we interrogate the extent to which mobile money is both a frugal innovation and business model. This paper concludes that mobile money as a frugal innovation addresses affordability constraints and resource constraints, and reduces institutional voids in resource-constrained environments.