Mobile banking for poor people

[img_assist|nid=7151|title=|desc=|link=none|align=left|width=100|height=70]A great number of poor people who are outside the formal financial system may use mobile banking system provided that market conditions are right as a global microfinance body CGAP reports. Interoperable payment platforms, practical and risk-based approaches to regulation, as well as shared networks of cash-handling agents should be developed.

CGAP (The Consultative Group to Assist the Poor) is a pioneer in the advancement of microfinance. Financial sector, governments and investors are supplied with comprehensive information, expert opinion and progressive technologies to help poor people all over the world get access to finance.

"Market forces are driving down costs. In the Philippines, we see that a transaction on a cell phone or at an ATM costs one fifth that of a traditional visit to a bank branch," said Gautam Ivatury, manager of CGAP's Technology Program. "Yet globally, we estimate that fewer than one in ten mobile phone banking customers are poor, new to banking, or doing anything more than payments and transfers."

"When it comes to reaching poor people who live outside the formal financial sector, the reality of mobile phone banking doesn't match the potential, much less the hype, at least not yet," said Ignacio Mas, CGAP advisor. "We see opportunities for service providers who move quickly to create new products, especially if they can establish shared networks of cash-handling agents to cover that 'last mile' of service delivery."

People practicing policy definition and supporting the increase of financial access have a lot of food for reflection on how to promote banking services such as credit and savings further in case market conditions are not doing it, states CGAP.