Being able to use a mobile phone for money transfers, bill payments and even savings would give some of the world's poorest people the chance to become part of the financial system, telecom providers and bankers have said.
While microfinance is estimated to have reached about 100 million people through institutions such as Grameenbank and small-scale community projects, telecoms industry group the GSM Association (GSMA) reckons that almost four times that number, who currently have no bank account, could benefit from mobile financial services.
The Grameenbank model works, but the scalability is limited, said Hannes van Rensburg, chief executive of mobile financial services provider Fundamo said on Wednesday.
The problem is about the inertia of money. It's very difficult to move very small amounts of money fast, he said in an interview with Reuters at the GSMA's Mobile Money summit in Barcelona.
South Africa-based Fundamo is the world's leading provider of software and services for mobile money to network operators and banks, with about a quarter of the global market. More than 100 million transactions were made using its platforms last year.
These transactions can be as small as 30 cents at a time, as mobile financial services providers aim to reach more of those living on less than $2 per day.
EASIER BY PHONE
Currently, about 3.5 billion people, more than half the world's population, have no access to banking services. However, 1 billion of those people do have mobile phones and the GSMA sees that figure rising to 1.7 billion by 2012.
Access to financial services could not only remove the need for long, costly and risky journeys to move money around, but also reduce the burden of constant, active money management endured by those living on tiny amounts and in constant danger of financial crisis.
Poor people are doing a tremendous amount of financial transactions just to survive, says Stephen Rasmussen, who runs a mobile banking program for CGAP, an association of non-profit organizations under the auspices of the World Bank that seeks to help to increase financial access for the poor.
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