[kictanet] MOBILE PHONES REVOLUTIONIZE AFRICAN BANKING

[alice]

 From Balancing Act


MOBILE PHONES REVOLUTIONIZE AFRICAN BANKING
Mobile phone banking is expanding across the region from South Africa to 
Kenya and is putting the poor directly in control of their own finances 
like never before.
In Africa, traditional banking is not a viable option for many of the 
poor and those living in rural areas. High fees, low education and 
literacy, as well as long distances between banking facilities get in 
the way of simple transactions. According to the Consultative Group to 
Assist the Poor (CGAP), an estimated 80 percent of those living in the 
United Nations-designated least developed countries (LDCs) are unbanked.
However, technologies like mobile phone banking are contributing to 
overcoming these constraints.  Only 1 billion of the world`s 6.5 billion 
people have bank accounts, according to CGAP, yet about 3 billion have 
mobile phones.  CGAP figures these new technologies will open the door 
to more than 2 billion people worldwide who currently do not have access 
to banking services.
Thanks to a $26 million partnership with the Bill and Melinda Gates 
Foundation launched in February, CGAP hopes to discover how to best use 
technology to deliver banking services to the poor around the world and 
"make it possible for people anywhere, anytime, to have access to all 
kinds of financial services," says Elizabeth Littlefield, chief 
executive officer of CGAP.
"Poor people are very willing to use mobile phones as a basis for moving 
money around. In places like the Congo, mobile phones are used to 
transfer money around the country, circumventing the banking system as 
well as the more traditional money transfer," she said.
According to Gautam Ivatury, a microfinance specialist and manager of 
the CGAP technology program, in the Democratic Republic of the Congo 
alone, there are an estimated 3 million mobile phones yet only 20,000 
bank accounts, indicating a huge potential for mobile banking.
The bottleneck in delivering microfinance services such as savings 
accounts, money transfers, and loans to the poor has been the cost of 
"making tiny little transactions" in sometimes rural areas using 
traditional banking practices. Yet mobile phones and other technology 
can cut the cost of such transactions and make widespread microfinance 
economically feasible. (SOURCE: AGOP)