The GSMA, a worldwide consortium of mobile industries, and the Bill & Melinda Gates Foundation (owned by the guy who used to run Microsoft and his lady wife) have teamed up to found the the Mobile Money for the Unbanked (MMU) initiative, allowing folks in developing countries to carry out mobile banking from their non-smartphones and keep and grow their money in a safe and affordable fashion.
The Foundation has donated $12.5 million to the endeavor and is currently working to “catalyze a new wave of mobile money innovation” and will support 20 projects in Africa, Asia, and Latin America. The ultimate goal? Supply 20 million unbanked people with mobile financial services by 2012.
Being “unbanked” is fraught with peril. Homes that have no way to hide their assets securely are targets for theft or con men and even in the US day laborers are prey for gangs in New Orleans. These guys make their money on the job site and have to carry it around in wads of cash to insecure squats. Mobile banking would at least allow them to deposit and transfer the cash to their loved ones regularly and gives them a bit more security on the streets or in remote villages.
GSMA and Bill & Melinda Gates Foundation Partner to Expand Availability of Financial Services through Mobile Phones
17 February 2009, Barcelona, Spain
The GSMA, which represents the interests of the worldwide mobile communications industry, and the Bill & Melinda Gates Foundation today announced an innovative programme that will expand the availability of financial services to millions of people in the developing world through mobile phones. The Mobile Money for the Unbanked (MMU) programme, supported by a US$12.5 million grant from the foundation, will work with mobile operators, 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 and Member of the Board of the GSMA. “This represents a huge opportunity and mobile operators are perfectly placed to bring mobile financial services to this largely untapped consumer base. 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 US$5 billion market opportunity over the next three years.”
The MMU programme will fund regulatory and market research to help overcome some of the barriers of providing these services and demonstrate the business case for serving this market. The programme includes a US$5 million fund to catalyse a new wave of mobile money innovation, encouraging mobile network operators to create new services for previously unbanked people in emerging markets. The MMU programme will support approximately 20 projects in developing countries, focusing on Africa, Asia and Latin America, with the goal of reaching 20 million previously unbanked people with mobile financial services by 2012.
“Traditional financial services are often too costly and inconvenient for people who earn less than US$2 a day to obtain, and too expensive for banks to provide,” said Bob Christen, director of the Financial Services for the Poor initiative at the Bill & Melinda Gates Foundation. “Technology like mobile phones is making it possible to bring low-cost, high-quality financial services to millions of people in the developing world so they can manage life’s risks and build financial security.”
This grant to the MMU programme is part of the foundation’s Financial Services for the Poor initiative, which 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 doorsteps of the poor in the developing world. The foundation believes that setting aside small sums in a safe place allows people to guard against risks, build assets, and provide opportunities for the next generation.
The DJ is at 7500 and Microsoft is acquiring companies. LOL.
http://www.reuters.com/article/technologyNews/idUSTRE51G3M420090217
I guess they can cut their work force to fill in the gaps.
Great, so now they can spend their days wages on data costs to send money!
I thought somebody did this kind of service, it was a retired from corporate business and pursue this kind of business , started in Africa ? and went to US and become successful.
I don’t remember the person name.
Nat
Great, Asia definitely needs all the help it can get.
Hey TC Advertising crew—
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Maybe this is normal?
Stay with me here. What if they could kick Zales, ect.. out, most likely by bloody force, and take over their own diamond mines as a co-op???
Add Ameritrade style stock buying to this application before shipping?
Make it so easy that all they need to do is enter their social security number and the ticker, the bid price and quantity.
That would really let them build a big economy like G8 nations.
I mean it’s not like they can’t just kick out the western countries Fidel Castro style tomorrow and set up shop with their own IPO?
I meant kick out western companies. They enter their social securiy # once for tax purposes, then they get to buy and sell public shares as much as they want.
Look at how well that’s worked in Venezula and Zimbabwe… Oh wait, they’ve both been fucking unproductive trainwrecks since they kicked the westerners out.
Learn from history for fuck’s sake – you can’t kick the “western companies out” without losing the expertise, resources, and specialized knowledge necessary to perform services originally rendered by aforementioned western companies. Ask any starving citizen of Zimbabwe how it’s working out for them.
Seriously, what a terrible, terrible, terrible, terrible, terrible, terrible idea Chris. And the big diamond cartel is De Beers, not sales, you fucking idiot.
Bleh, *Zales*, not “sales.” Here come the “OMG TYPO WHEN CALLING SOMEONE AN IDIOT” flameouts.
There are a few misconceptions here. Living in South African I feel that I have a pretty good idea of the issues.
The biggest risk is transporting cash on public transport at the end of the week/month. Once you arrive in a township you are fairly safe as township law prevails. Lynching thugs (aka Tsotsi) is commonplace. Residents must have cash in townships as it is supported by informal retail; small stands that sell everything and that only take cash.
A great solution exists for moving funds from your place of employment to a township. Workers can deposit funds into a popular retail chains branch and then withdraw the funds at any branch of the chain in the country. The cost is about 50 US cents to do this and there is no lock in as to where your spend the money. Bringing this cost down is the real solution, not a clunky cellphone solution which few will really understand.
Hope there is a real need of such thing in third world countries.
It is an excellent initiative from Bill & Melinda Gates Foundation. However, we have to remember that in many third world countries, there is no legal framework for cellphone banking. So, it is better that they look into this matter first and work with the government agencies to create a universal legal framework for cellphone banking. Otherwise, it will be nothing more than a media circus.
There are some services running in south america, like http://www.tigocash.com.py
As a citizen of the third world, I believe this initiative has an uphill battle ahead.
The only people that can celebrate are venture capitalists because, in addition to partnerships with Western banks already working in Africa such as Barclays Bank and Standard Chartered, they will invest in user applications and reap handsome returns
An erratic cellular network is the biggest hindrance to quick progress.
With his Malaria foundation, Bill Gates has transformed perceptions and helped raise funds for anti-HIV/AIDS initiatives.
I do not see why and how this would fail
Safaricom in Kenya (a Vodafone partner) has been running M-PESA for about a year now, and Kenya now has more M-PESA accounts than regular bank accounts! See http://www.safaricom.co.ke/index.php?id=745 You can send money to other subscribers or collect money from local agents around the country. A great model, and it’s working very very well.
I believe Vodafone/M-PESA were speaking at MWC today. The Bill & Melinda Gates Foundation has endorsed them as well, so I guess they’re not only sponsoring Absa.
I’m not affiliated, I just heard one of the M-PESA founders speak in London last week and was very impressed!
Brendan.
that’s very impressive. imagine a global cellphone based banking system. wow!
This is a good initiative with a lot of potential. India currently has more people with mobile phones than with bank accounts. Bringing those people under the gambit of financial services should provide them financial safety and will improve their livelihood. In my opinion, this is not just a technological challenge; it will a bigger challenge to convince people to change their traditional habits and subscribe to mobile payment/saving services. But knowing what Gates has accomplished in the past, I am sure he is up to the challenge.
Gates should have teamed up with Muhammed Yunis, he has created an amazing empire of social business’ built around their first company the Grameen Bank http://www.grameen-info.org/ which is a micro credit lender to the poor.
Rather than a charity that requires donations these social business’ sole philosophy is to create a self sustaining business for the poor.
The poor people of Africa don’t have money to deposit, what they need is money to start small (micro) business’. Then the banking can begin!
Bill Gates made is money here in the US: it wouldn’t hurt for him to look inward at the rapidly deteriorating country that made him rich, rather than trying to spend his money on micro-payment systems for third-world countries.
A relatively short drive will show him plenty of poverty in the Seattle region, and an education system that can best be described as dysfunctional. Foreclosures are spiking there: while he was dickering with his micro-payment system 3,000 people last month were served foreclosure notices within driving distance.
Gates showed callous disregard for what consumers wanted when he led the development of Vista and prematurely released what’s now known as the worst OS MS ever launched. It’s time he stepped out of his cave and noticed what’s going on around him.
This makes a lot of sense. I had spoken to the founders of a company in India in this space EKO (eko.co.in) and they had made a simple case.
Universal phone access happened in less than 15 years. This infrastructure could be the bedrock of universal banking and it could happen in 5 years.
Why
1. The phone is smarter than the smartest smartcard and can be used to create ~0 cost bank accounts.
2. The retail infrastructure that sells phones and prepaid cards could be used to move the small amounts of money and execute small transactions with marginal added cost.
I think the main barrier to their dreams are regulators, hopefully BillG can help.
Weird – on what planet do they actually live. Everywhere outside US cell phone banking is a everyday thing. Particularly in Africa everybody does it. Only in the US everyone is chicken about cell phone banking althought it is proven to be safer than online banking. Really very weird news.
Any further development yet?
MIT wrote an article a couple months about mobile micro payments in India. I think this is a great approach to nations that widely work only in cash.
http://groups.google.com/group/telecom-grid-pakistan/browse_thread/thread/3a654da6b52acaae?pli=1
Actually, I hope Barclays do not end up monopolizing the market in Africa.
They have acquired Absa and have bought shares in Blue Financial services, a company that offers loans attached to monthly earnings of government workers in most African countries.
The result is that with collapsing monthly earnings resulting from the global recession, lenders, Barclays inclusive, have ruthlessly pursued desperate workers, usurping the very last money from these poor workers.
Which simply means even as the Bill and Melinda Foundation teams up with banks and other financial outfits, it should be so with the sole aim of ensuring the poor can save, send and receive money.
And last but not least, listen in desperate times. In the current set-up, whoever has the monopoly will ruthlessly pursue the poor and leave them worthless!
i heard the news that bill gates helps people and i would like to be one of those people because i need money to buy a phone because soon i will be aplying at south african universities and i really need a new phone because they will be calling me often to tell me if they accept me or not.please help me.i live at south africa and my cell mumber is 0719988648 but you must dial 27719988648. i would be very happy if you help me
Interesting!
I live in Ghana. Simply, cell phone banking is NOT everywhere in Africa.
Yes there are commercial cell phone banking services available but it is concentrated in East (MPESA – Safaricom/Vodafone, Zap-Zain just launched) & South Africa (Wizzit, MTN Banking). Some other countries also have some payment.
The confusion may be what constitutes Mobile banking. I think basically it should involve both funds transfer and paymen services.
This initiative being news is not ‘weird’, I only hope wherever it is used has a far reaching effect.
My personal interest is in the m-payment services and hoping soon users of a website I run can buy ’stuff’ as easily with their phone as paypal is used in the US & Europe.
u better keep waiting.. or do it!
> gisho – February 18th, 2009 at 6:16 am PST
> u better keep waiting.. or do it!
Moron. Do what? Fling out 12 million of a hard currency to jump start his own system of mobile banking?
Here is another example:
http://www.itnewsafrica.com/?p=2247
I like in the third world in a city where people get killed for a cellphone, or kidnapped and taken to an ATM at gun point to retreive money.
I wonder how secure is this.
oops typo “I live”
now this gets much easier coz u only need to transfer the cash to their phones… see?
There are some of the initiatives already running here in asian countries. Especially in india, i know one startup doing that ..
Its also coming into Pakistan now.
I think what is lost in all this publicity is the fact that these services already exist in Kenya and South Africa (among others). The innovation was already homegrown…in Africa. The first company to offer these services (money transfer) was Wizzit in South Africa. Mnet followed soon after. Then there was the legal battle between Wizzit and Mnet, and I forget how that was sorted out. Then Kenya’s Mpesa came on the scene and the press claimed they were the first mobile banking/mobile transfer facility. Ofcourse that was not true. Just as it is not true that Muhammed Yunis was the founder of micro-finance. My own grandma and her friends used to put money together in what they called “merry-go-round” and give one member of the group each month. A member could also borrow from the kitty. This was microfinance long before Yunis (my grandma died a few years ago at age 91 so this is not yesterday. We all followed in these foot steps of forming small groups, long before micro-finance became a household name.
Yes there are many un-banked people, but it should not be lost that the innovations have already been done. In South Africa, mobile banking is alive and healthy. Wizzit is now a bank (I have no affiliations with it, now I am even from SA).
And to the person who is wondering if the “poor” have money to deposit…they do have assets of one kind or another not defined so by Western economists. And they do need a means to obtain cash from their relatives (for medical or educational expenses) or to send to their children when they sell their produce, or as someone said, for safekeeping in case they get robbed between the points of obtaining the money and the place where they need to save it or spend it.
So before you all get excited…remember who MWC is made of. This is just a money making venture…spreading into the emerging markets. It is up to African people to form their own companies and tap into this market themselves…otherwise you will continue to cry foul. Its all about profit and loss. The other stuff about helping the “poor” is just the marketing end.
Samba
I think this is a really great initiative.
KAYO MARBILUS MYSPACE BLOGS myspace.com/kayomarbilus William Henry “Bill” Gates III (born October 28, 1955)[2] is an American business magnate, philanthropist, author, and chairman[3] of Microsoft, the software company he founded with Paul Allen. He is ranked consistently one of the world’s wealthiest people[4] and the wealthiest overall as of 2009.[1] During his career at Microsoft, Gates held the positions of CEO and chief software architect, and remains the largest individual shareholder with more than 8 percent of the common stock.[5] He has also authored or co-authored several books.
Gates is one of the best-known entrepreneurs of the personal computer revolution. Although he is admired by many, a number of industry insiders criticize his business tactics, which they consider anti-competitive, an opinion which has in some cases been upheld by the courts.[6][7] In the later stages of his career, Gates has pursued a number of philanthropic endeavors, donating large amounts of money to various charitable organizations and scientific research programs through the Bill & Melinda Gates Foundation, established in 2000.
Bill Gates stepped down as chief executive officer of Microsoft in January, 2000. He remained as chairman and created the position of chief software architect. In June, 2006, Gates announced that he would be transitioning from full-time work at Microsoft to part-time work and full-time work at the Bill & Melinda Gates Foundation. He gradually transferred his duties to Ray Ozzie, chief software architect and Craig Mundie, chief research and strategy officer. Gates’ last full-time day at Microsoft was June 27, 2008. He remains at Microsoft as non-executive chairman.
My father was a member of the “Navy” of America that was lived there many years ago, He died after a big financial defeat, and now we live in an asian country without any places to live.
I’m 22years old and I live with my sister (26years). we are dismissed from our home, when my mother married with my step-father (5years ago) and no one of government departments doesn’t help us too. Just because we’re Christians!
My sister studied in the field of genetics and worked in the connections of computer hard wares, but we feel we’re changed to someone that doesn’t serves someone’s purpose cause of the conditions we have, I feel dejected more and more day to day, and our connection breaks off from culture and technology.
We’re working now, but we’ve many charges to pay as little loans we got from my sister’s office (for monthly fees we paid to our friends, we were living in heir home), incomings for women is so little and the monthly fee for home is threefold of a girl’s incomings! And I can’t continue this way because we should pay the price they lent us and we’ve no money to pay for our basic problems.
We need your help very emergency, only 20′000 $ can change our life.
Thank you for your hopeful answer.
I’m an American but born in Kenya i would like to work in Kenya even volunteer i live in Boston.
Great, so now they can spend their days wages on data costs to send money
Hey TC Advertising crew—
I’m not sure if this is normal, but the ads that show up in my iGoogle homepage feed don’t actually work. It just kind of hiccups and says “stopped” at the bottom, whether I try to open in a new tab or not.
Maybe this is normal?