Mobile Phones Offer New Banking Opportunities for the Poor
Thursday, November 9, 2006
The Consultative Group to Assist the Poor (CGAP), United Nations Foundation (UN Foundation), and The Vodafone Group Foundation (VGF) have released the first public findings on how low-income individuals in South Africa use mobile phone banking (m-banking). The findings show that m-banking can be up to a third cheaper for customers than the current banking alternatives, and users value the service for its security and easy use.
However, this study shows more needs to be done to address negative perceptions about the cost and effectiveness of mobile phones and m-banking.
“Mobile phone ownership is exploding in developing countries, presenting a tremendous opportunity to deliver financial services cost effectively to the nearly three billion people who do not currently have bank accounts,” said Elizabeth Littlefield, CEO of CGAP. “And that matters because financial services can help poor people increase household incomes and build assets, making them less vulnerable to crises so that they can ultimately plot their own paths out of poverty. Globally, there are more than 2.5 billion mobile phones, more than half owned by people in developing countries.”
The study is based on surveys of 515 low-income South Africans, including 300 who do not use m-banking and 215 customers of WIZZIT — a “virtual bank” that has no branches of its own, but instead offers a bank account which is accessible via mobile phone and debit card.
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