Mobile Banking for the Unbanked and the Financial Crisis: CGAP Sees Growth Potential in Developing Markets



    WASHINGTON, Feb. 11 /PRNewswire-USNewswire/ -- CGAP, the global
microfinance center is releasing new research and data to encourage telecom
operators, financial institutions and governments to see the business
potential in expanding access to financial services for poor people in
developing markets. The current economic climate makes the need for widespread
availability of safe alternatives to cash even more pressing.
    

    
    "This financial crisis cannot mean the end of innovation. Let's remember
that some of the greatest innovations of the past century -- the pocket
calculator, television, the World Wide Web -- were created during times of
economic hardship," said Elizabeth Littlefield, CGAP CEO.
    

    
    The biggest mobile banking success to date has been M-PESA in Kenya,
which is 45% cheaper than other transfer services. A forthcoming independent
survey finds 83% of users say not having M-PESA would have a "large negative
impact" on their lives.
    

    
    Though these are encouraging numbers, CGAP has found globally that so far
m-banking has yet to reach its full potential. Fewer than one in ten mobile
phone banking customers are poor, new to banking, and doing anything more than
payments and transfers.
    

    
    "Mobile banking can move beyond simple transaction accounts to offer a
flexible platform that will meet poor people's needs, while at the same time
providing a new source of growth for providers," said Littlefield. "All the
pieces are now coming into place for mobile banking to transform the way
people get banking services in emerging markets."
    

    
    There are other potential opportunities for service providers to help
address the needs of the poor while growing new business. CGAP estimates that
150 million poor people around the world receive regular social welfare
payments from their governments. Yet fewer than 25% of beneficiaries receive
their benefit into a bank account through which they could save, make payments
and build assets.
    

    
    "Imagine if such payments could be delivered using magnetic stripe cards
linked to a bank account -- or through a mobile phone. This could mean
beneficiaries would suddenly have access to a full range of valuable services,
such as savings," said Littlefield.
    

    
    At the GSM World Congress in Barcelona, the CGAP Technology Program will
present its latest findings around client uptake and business models that make
mobile banking work for poor people. Learn more at http://technology.cgap.org.
    

    Banking beyond branches -- by the numbers
    --  In the Philippines, a bank branch transaction costs US$2.50 but only
        US$0.50 if on a mobile phone, and some m-banking commissions still
fall
        short of what merchants earn from other products -- for example;
        toothpaste, 10-12% margin; performing a mobile banking cash-in
        transaction; just 1%.
    --  In Pakistan, the cost of setting up and operating an agent is 76 times
        lower than that of a bank branch.
    --  Brazil is probably the most developed market where correspondent
        banking has taken hold: More than 70 institutions are currently
        managing around 105,000 agents reaching nearly 6,000 municipalities.

    CGAP's technology program is supported by the Bill and Melinda Gates
Foundation.

    
    CGAP is an independent policy and research center dedicated to advancing
financial access for the world's poor. It is supported by over 30 development
agencies and private foundations who share a common mission to alleviate
poverty. Housed at the World Bank, CGAP provides market intelligence, promotes
standards, develops innovative solutions and offers advisory services to
governments, microfinance providers, donors, and investors.  More at
http://www.cgap.org.
    





    




For further information:

For further information: Una Gallagher Pulizzi, +1-202-473-8869, or Jim
Rosenberg, +1-202-473-1084, both of CGAP   Web Site: http://www.cgap.org


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