At the Sibos financial service conference last year, Bill Gates spoke about the role of mobile solutions in the developing world. He argued that mobile phones are the key to bringing banking mobility to frontier markets around the world.
"By 2030, 2 billion people who don’t have a bank account today will be storing money and making payment with their phones" said Bill.
Mobile solutions have long existed in countries where conditions are harsh and it is impossible to put a Wells Fargo on every corner. Already, people from places like Africa, Afghanistan, Mongolia, to the Philipines are storing money on their phones, making purchases, and sending money back home.
The growing phenomenon of mobile banking has let customers use financial services from their phones outside traditional bank branches. In fact, mobile banking was originally a solution for families to send and receive money back home where banking infrastructure is non-existent. Today, many developing countries rely on these mobile solutions to make life easier. Here are 3 examples illustrating how mobile banking has paved the way for accessible banking services in developing countries.
M-PESA in Kenya
Kenya has become a suprising leader in mobile banking. In 2007, the idea came alive after Safaricom, the country's leading mobile provider, partnered with Vodaphone to tackle a major problem.
Many Kenyan men migrate to cities to find work. Sending money back to their families who live in isolated villages is nearly impossible. The solution was to create a way to transfer money via mobile phone subscriptions using a network already in place by Safaricom, M-PESA.
In its first year, transactions reached 2.6 million daily during Christmas and Easter periods. Since then the program is the most popular money transfer and payment service in Kenya, subscribing over 17 million Kenyans, and moving billions of shillings through it annually, roughly 25 percent of the country's gross national product.
VisionFund in Cambodia
90 percent of Cambodia's poor, roughly 4.8 million people, live in rural areas. Like in many developing countries, a large number of people migrate to the city in search of work. But sending money back home in a country where banks hardly exist in rural areas is difficult.
WING, established by ANZ, has partnered with VisionFund to assist the under and unbanked of Cambodia. In country where only 3 million people use cellphones in a population of 14 million, and only 500,000 have bank accounts, the obstacles are numerous.
Yet, there has been strides of success. The program has successfully extended financial services to those living in poor and rural areas, providing banking services to 200,000 Cambodians in 2011. As an extra benefit, it has also created jobs. For example, students can pay for their college tuition by signing up new users to the banking service.
G-cash in Philippines
33 million Filipinos use a mobile phone, texting an average of 200 million messages daily. Yet, those with access to banking services is staggeringly lower.
Thanks to G-cash, Filipinos can now use their phones to bank. As the text messaging capital of the world, the potential for mobile banking in the Philippines is high. Not long after its launch, 1.3 million people in March 2006 were using G-cash as a way to transfer money. Today, mobile banking is growing. According to MasterCard's Mobile Payments Readiness Index, the Philippines sits at number 13 on the list in terms of readiness to accept new forms of mobile payments. As that number increases, so does the expansion of bank services in rural areas all across the Philippines.
While there are still many who don't have access to mobile phones, let alone mobile banking, the mission of Bill Gates and many other entrepreneurs, investors, and companies may ensure that people all over the world - no matter where they are - will have access to the whole range of financial services traditional banks offer, directly from their phones.
Photo via Flickr