Mobile Banking for the Bottom Billion: An iRevolution?

I chose iRevolution as the title of this blog because of my interest in the revolutionary potential of technology vis-a-vis the empowerment of the individual. I see the information revolution as having a multiplier effect on individual power, enabling the individual to make more informed and calculated decisions.

While the topic of my blog entries have ranged from conflict early warning and crisis mapping issues to civil resistance and digital activism, the subject of mobile banking is one that I am particularly interested in terms of iRevolutions in the making.

This explains why I just participated in a half-day roundtable on mobile banking for the poor, which was organized by the Consultative Group to Assist the Poor (CGAP) and hosted at the World Bank (WB) headquarters in Washington DC. This blog entry comprises a summary of the introductory remarks. (A detailed summary of the 3-panels that followed are available below).

The poor are bound to be affected by today’s synchronized global recession. Two processes in particular are at work: 1) decline in demand; and 2) contracting remittance flows, down -12% to -14% in some developing countries. However, micro finance banks are immune to economic downturns. To this end, mobile banking, also referred to as branchless banking, may provide one way to increase the financial resilience of the bottom billion.

Of the 140 million poor people employed who receive social payments (aka G2P), less then 1/4th receive their payments via bank accounts. There are multiple benefits of moving away from a cash-based system to a debit system. Argentina recently introduced a debit system which saw fraud decrease 12 fold. One limitation of Argentina’s approach, however, is that only the government can issue load cards.

The three panels that comprised the roundtable moderated by CGAP included:

1. Driving Mass Market Customer Adoption
2. Building a Viable Agent Network
3. Creating and Taking Advantage of Regulatory Regimes

Please click on the above links for detailed summaries of the three panels.

Patrick Philippe Meier