Boost for mobile banking for the unbanked

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CGAP has announced a new partnership with the UK Department for International Development (DFID) to expand ongoing global efforts to use information and communication technologies (ICT), especially mobile phones, to increase access to basic financial services for the poor. In addition to a 2006 grant from the Bill & Melinda Gates Foundation and CGAP funding, DFID will provide £8 million to the CGAP Technology Program.

‘Giving people access to financial services can help them lift themselves out of poverty. I am therefore pleased that the DFID-supported Technology Program at CGAP will work to improve poor people’s access to financial services such as payments, savings, loans, and insurance,’ says Gareth Thomas, Minister for Development, UK. ‘The Program will also support the delivery of social protection payments in developing countries and make the transfer of international remittances cheaper and safer.’

The announcement builds on more than six years of work on mobile banking and access to finance. In that time, CGAP has provided financing and technical advice to projects with more than a dozen providers in Asia, Africa, and Latin America to develop innovative banking solutions, and conducted in-depth policy assessments of 13 countries. CGAP has also published a series of white papers focusing on business models, client needs, and regulatory conditions, which can be accessed at http://www.cgap.org/technology.

‘The idea that a mobile phone could replace a bank branch has gone from concept to reality at an amazing pace. Now with support from DFID and the Bill & Melinda Gates Foundation, it’s time to get beyond the early excitement of the past few years and shift into the build-out stage for mobile money so that millions of poor people everywhere get access to formal financial services,’ continues Stephen Rasmussen, manager of the CGAP Technology Program.

Communication technologies such as POS devices and ATMs, but also notably mobile phones, are increasingly connecting poor people to the financial grid. With CGAP technical support and Bill & Melinda Gates Foundation funding, CGAP’s project partners in India, Mongolia, Pakistan and the Philippines have created the world’s first mobile phone-enabled savings accounts aimed at reaching poor, unbanked people.

‘Savings is a highly neglected financial service available to the poor, and despite what most people may think, the poor do need a safe place to save money,’ adds Amolo Ng’weno, deputy director at the Bill & Melinda Gates Foundation. ‘Mobile phones and other front-end technology solutions can bring low-cost financial services to poor people, giving them opportunities to build financial security and improve their lives.’