Mobile Financial Services
Around 2.5 billion adults around the world do not have access to formal or semi-formal financial services – nearly 90 percent of whom live in Africa, Latin America, Asia and the Middle East. Yet more than half the world's population has access to a mobile phone and nearly a quarter use the internet as developing countries rapidly adopt new communications technologies. Access to financial services provides poor people with much greater resilience to economic shocks and increased capacity to increase or stabilize their income. Mobile phones can play a vital role in financial inclusion.
Two of the most critical barriers for Microfinance Institutions (MFIs) to scale are high operational costs associated with the staff-heavy microfinance outreach approach itself, and operational inefficiencies associated with managing cash and information flows as many MFIs lack strong back end technology systems. The manual collection of millions of small transactions on a monthly basis is a time intensive task and high security risks are involved for both the clients and MFI staff. Money transfers often take multiple days to go from client to end branch, and while these funds are in transit they are idle for the institution. The length of time involved for loan officers to collect cash on a weekly basis limits the time available to develop clients from the full potential market. MFIs are increasingly able to increase efficiencies and better serve clients by providing a variety of financial services through mobile devices.
Grameen Foundation is working to help make financial inclusion simple, affordable and accessible to the poor though the use of mobile phones.
We are working to innovate on three fronts:
- Overcome technology barriers to facilitate integration of mobile solutions for microfinance institutions
- Research to inform and influence companies to design financially inclusive products
- Implementation projects focusing on processes, evolving business models and relevant products.
To learn more, please contact us by email
Watch a video from the Marketplace on Financial Solutions for Development held in Paris March 4-5, 2010 where we won a $100,000 grant: