Vodafone Group, with the permission of The Consultative Group to Assist the Poor (CGAP), today publishes a report that reveals the economic and social benefits being created by mobile banking (m-banking) amongst the world's poorest communities.
The report, titled Economic Empowerment through Mobile, is the third in a series of Corporate Responsibility Dialogues produced by Vodafone and includes the results from three independent research projects.
Vodafone partnered with The Consultative Group to Assist the Poor (CGAP) and World Resource Institute (WRI) to research the impact of mobile phones in enabling economic transactions. It also worked with Forum for the Future (FFF) to understand the social and economic impact of its Airtime Transfer product in Egypt.
Key economic findings include:
- The first public results on how low-income individuals in South Africa view and use m-banking, showing it is valued as it can be more affordable than traditional banking (94% of users/37% non-users)
- Traditional business models are being challenged as m-banking models are adopted; one third of people in South Africa and Botswana who do not have bank accounts do either have a mobile phone or have access to one
- Airtime Transfer services in Egypt have started to create commercial opportunities for small-time dealers and resellers of airtime, providing a viable and flexible business opportunity for a wide range of micro-entrepreneurs
Key social findings include:
- Mobile technology and the Airtime Transfer services support social networks through reinforcing existing relationships and enabling airtime to be redistributed across family or friends
- Airtime Transfer services have given women more independence. 52% of the women surveyed for the FFF research said that airtime transfer gave them more freedom with only 5% saying the opposite
Charlotte Grezo, Director of Corporate Responsibility, Vodafone commented:
"We have been supporting systematic research into the socio-economic impact of mobile phones in developing markets since 2004. We have learned a lot about the potential to utilise mobile banking from our own micro payment solution, M-PESA, which has been successfully pilotedin Kenya. This was developed in partnership with the UK Department for International Development. It is essential we continue to understand and explore the social impacts of mobile technology so that the products and services we develop maintain a positive influence."
Guatam Ivatury, Microfinance Specialist, CGAP commented:
"Financial services help poor people increase household incomes, build assets, and become less vulnerable to crises. Mobile phones have tremendous potential to deliver these financial services to billions oflow-income people who otherwise would not have the opportunity to save or improve their financial literacy using a traditional bank."
Vodafone is committed to understanding the impact of mobiles in developing markets and published detailed research in this area: Africa: the Impact of Mobile Phones. The CR Dialogue Economic Empowerment through Mobile is now available online at www.vodafone.com/responsibility/dialogues.
The 'Mobile phone banking and low income customers: evidence from South Africa' report was delivered through a partnership between CGAP, the United Nations Foundation and the Vodafone Group Foundation with important contributions from South Africa's FinMark Trust.
Supporting information:
- The number of mobile subscribers in developing countries grew more than five-fold between 2000 and 2005, reaching more than 1.4 billion.
- The estimate of worldwide subscribers today is just over 2 billion; developing countries accounts for 70% of the global market.
- In South Africa and Botswana, one-third of people without bank accounts - many who are poor - own a mobile phone or have access to one.[1]
- Mobile phones can be used to conduct many banking transactions anywhere, anytime - low-income people no longer need to travel to distant bank branches.
- M-banking transaction costs far less to process than a transaction at an ATM or branch so banks can make a profit handling even small money transfers and payments
- South Africa has a high penetration of cell phone usage/access amongst the currently unbanked (19% of unbanked people have a pre-paid cellphone and a further 11% have access to a friend/family members cellphone)
- There is potential to utilise cellphone banking as a vehicle to expand access to financial services in the poorer market segments, who traditionally have less access to these services
- Cellphone banking appears to make it more comfortable and convenient for poorer people to use financial services. It allows for easier access rather than traveling to banks/ATMs
[1]Finmark Trust. Finscope South Africa 2005 and Finscope Botswana 2004.
- Caroline Dewing, Vodafone Group Plc-
