Another global, messy, problem? BANKING!

Active mobile money accounts per 1000 users (2013)I just found another blog about The Bill and Melinda Gates Foundation which just launched their Annual Letter showing clearly that after having taken on global problems like the design of toilets and condoms even creating urine-powered fuel cells, their next big ambition to tackle will be…. BANKING!

Their big bet is: ” that the lives of people in poor countries will improve faster in the next 15 years than at any other time in history. And their lives will improve more than anybody elseĀ“s.”

Bill and Melinda think that in the next 15 years, the world will see some major breakthroughs. For developed countries this might mean movies on super high resolution screens, whereas for developing countries this might mean that parents will know their children are not going to die. The major breakthrough the Bill and Melinda Gates Foundation believes in are the following:

1. Child deaths will go down, and more diseases will be wiped out;

2. Africa will be able to feed itself;

3. Mobile banking will help the poor transform their lives;

4. Better software will revolutionize learning;

In the next 15 years digital banking will give the poor more control over their assets and will transform their lives. The key to this will be mobile phones. By 2030, 2 billion people who do not have a bank account today will be storing money and conduct payments with their mobile phone.

However, there are still quite a few barriers to this vision:Old vs. new banking methods

Access to mobile phone is not equal: 46% of Bangladeshi women own a phone, compared to 76% of Bangladeshi men, ie. Bangladeshi women lack access to mobile financial services offered by bKash.

Regulation of mobile financial services is still an issue. During my time at CGAP, the technology programme was already instrumental in financing regulation for developing countriesĀ“central banks, however there are still a lot of countries with only rudimentary or no regulation.

Finding a key to the distribution network (e.g., supermarkets, pharmacies) where people can transform cash into digital money and vice versa. This is pretty much what I am doing in my work with the IFC-MCF Partnership for Financial Inclusion where we are looking for the business case behind agent networks.
Bill Gates even created a little video about this.


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