Monday, September 28, 2009

The Economist highlights the promise of mobile money

by Brendan Smith

The growing buzz over the use of mobile phones to bring access to financial services to the world's poor got a boost this week when The Economist featured the trend on its cover. The issue's survey on telecoms in emerging markets puts a spotlight on the well-known success of ventures such as Safaricom's mPesa, as well as the efforts by MTN to extend a mobile money service it has launched in Uganda to other markets in Africa. The efforts of organizations such as the Grameen Foundation, FrontlineSMS and Google are also discussed, while the mHealth for Development report authored by Vital Wave Consulting is cited as proof of innovation in the health space.

While mobile money and other mobile services (in areas like health, education and agriculture) show tremendous potential to transform the lives of the world's poor, serious obstacles remain. Regulatory concerns, particularly for trans-border transactions, have to be overcome, while the objections of banks and other traditional providers of financial services may slow the momentum for mobile money in many countries. Each successful demonstration of mobiles' power to transform lives, however, increases the likelihood that mobiles will be the tool to lift millions out of poverty.

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