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News 2009-02-20 Bill Gates invests $12.5M to expand financial services on mobile phones By Dan Butcher February 19, 2009 The GSMA and the Bill & Melinda Gates Foundation announced a program that will expand the availability of financial services to people in the developing world through mobile phones. The Mobile Money for the Unbanked (MMU) program, supported by a $12.5 million grant from the foundation, will work with wireless carriers, banks, microfinance institutions, government and development organizations to encourage the expansion of reliable, affordable mobile financial services to the unbanked. “There are over 1 billion people in emerging markets today who don’t have a bank account but do have a mobile phone,” said Rob Conway, CEO of the GSMA, Washington. “This represents a huge opportunity and mobile carriers are perfectly placed to bring mobile financial services to this largely untapped consumer base,” he said. The foundation’s Financial Services for the Poor initiative is working with a wide range of public and private partners to harness technology and innovation to bring quality, affordable savings accounts and other financial services to the poor in the developing world. The demand for financial services—especially savings—is enormous. And providing financial services to the poor is a rapidly emerging business opportunity. Leveraging the low cost payment platform developed by mobile network operators is a promising way to bring formal financial services to the doorsteps of the poor, especially since more people have mobile phones than bank accounts in most developing countries. GSMA will engage key players to execute the program, including wireless carriers, remittance providers, banks and mobile money vendors, as well as other stakeholders such as microfinance institutions, governments and development organizations. Many people living on less than $2 per day have access to a mobile phone – and the use of mobile phones is increasing rapidly. According to Wireless Intelligence, mobile penetration rates in Sub-Saharan Africa have increased from 7 percent in 2004 to 35 percent in 2008 and are expected to reach 56 percent by 2012. In Africa, wireless carriers added 70 million users in 2008. Innovation and technology such as mobile phones are making it possible to bring low-cost, high-quality financial services to the doorsteps of the poor. This can provide opportunities for people to build financial security, and for communities and economies to advance. “Based on the initial findings of research conducted with the microfinance centre CGAP and McKinsey & Company, we believe that mobile money for the unbanked has the potential to become a $5 billion market opportunity over the next three years,” Mr. Conway said. Staff Reporter Dan Butcher covers banking and payments, carrier networks, commerce, database/CRM, manufacturers, music and software and technology. Reach him at dan@mobilemarketer.com. |
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