Cellphones Can Be Lifeline for the Poor – Gender
Author: Womens UN Report Network
Date: September 6, 2010
WUNRN
UN Wire
Important for Women & Girls –
Cell phones give connectivity to world’s poor
The low cost and
availability of cell phones has sparked a revolution in applications geared
toward poor and rural communities in the developing world. Weather updates for
farmers, mobile banking and prenatal information are among the dozens of
applications being tested by NGOs across Asia, Africa and Latin America.
For the Poor, Cellphones Can Be Lifeline – Gender
By Cecilia Kang – Washington Post Staff
Writer
September 8, 2010
SEATTLE – For the world’s poorest, cellphone technology carries opportunity,
aid groups say, as text messages and other mobile applications have created a
new platform to reach the most remote farms and crowded urban slums of Africa,
Asia and Latin America.
The Grameen Foundation, a Washington-based group known for helping women
with the smallest of business loans, has two dozen people in a technology lab
here developing mobile Internet applications to help spread its microfinance
model. It’s warning farmers in Uganda about banana crop rot through text
messages and collecting data on spreadsheet applications on smartphones.
And the Bill & Melinda Gates Foundation has dedicated $12 million to
help village farmers in Tanzania, Cameroon and Rwanda save money through
electronic mobile-phone deposits. It has launched a $10 million contest in
Haiti to fund the best mobile banking ideas to channel earthquake relief to
people who would otherwise stand in long lines at overwhelmed bank branches to
collect cash.
In all, 5 billion cellphones are in use globally, and the most aggressive
adoption is coming from low-income and poor communities, where the low cost of
phones and the availability of cell networks even in remote areas has fueled
the rapid growth. The innovations in development programs are relatively new,
and it’s too early to predict their success. Political instability and
dictatorships make it hard to work with telecom service providers, and some
central banks are reluctant to cooperate with companies that could take away
their control over their citizens’ finances.
Even so, cellphones have broken through bureaucracies and are reaching many
who traditionally have been isolated from help. A basic phone that sends text
messages can cost $20. A family or village can share one phone, with each
person switching out cheap SIM memory cards for access. Kenya and Uganda have
mobile broadband networks rivaling those in the United States and Europe that
support the iPhone and BlackBerry.
“Mobile penetration is at almost every single level of geography and
income, and given that situation, we are asking how that technology can be used
to increase social and economic benefits,” said Chris Locke, managing
director of development programs for GSM World, a global wireless trade group.
Cellphones are being adopted faster than even the most basic services, such
as routine medical care and schools. GSM World predicts there will be 1.7
billion cellphone users by 2012 without a bank account. The nonprofit
Consultative Group to Assist the Poor estimates that 150 million people receive
regular social welfare payments but that fewer than 25 percent of them have a
bank account in which to deposit those funds, save and build assets. Much of
that is because bank branches aren’t available in rural areas and transaction
costs are high.
As such, the Gates Foundation is trying to replicate a popular electronic
banking program in Kenya in 19 other nations, including Cameroon and Tanzania.
Through M-PESA, a joint venture launched by a British development fund and
Vodafone, a Kenyan farmer can deposit a few dollars of cash with a local shop
owner who converts the cash into electronic currency through a mobile text
message sent to a city bank. A local telecom provider acts as the armored money
vehicle, circulating the money electronically, and a bank manages the deposits
so that even the poorest people can save money – a key to breaking out of
poverty, aid workers say.
“Savings is an option everyone should have but is not available to the
poorest because of the transaction costs and because there is simply no
business case for a bank to set up a branch where the poorest live,” said
Ignacio Mas, deputy director of financial services for the Gates Foundation.
“That’s where mobile technology comes in. It allows for even $5 to be
converted into electronic value without the high costs like never before.”
A bank branch transaction costs $2.50 in the Philippines, but if done on a
mobile phone can be reduced to 50 cents or lower, according to CGAP. The cost
to set up a village shop as a bank agent is relatively low, the group said, and
studies in Africa show that mobile banking agents at village shops are
generating more cellphone banking transactions on the continent than Western
Union.
Mobile phones have also spurred programs in health, agricultural and
educational development.
In the past two months, Grameen has registered 500 expectant parents in the
Kassena-Nankana area of Ghana, near the border with Burkina Faso, to receive
free, regular phone calls and text messages guiding them through pregnancy. At
week seven in the pregnancy, a parent receives a text reminder to take a
malaria vaccination. At week 37, the parent is told that contrary to myth,
eating fruits such as mango and proteins such as eggs is nutritious and won’t
harm the fetus.
Grameen’s founder, Muhammad Yunus, won the Nobel Peace Prize in 2006 for
micro-lending aimed at women in Bangladesh and other impoverished nations.
A former Microsoft executive set up Grameen’s technology lab in Seattle
three years ago and attracted two dozen high-tech veterans to come up with Web
and mobile phone solutions for the developing world.
In a partnership with Google and Uganda’s government-run wireless service
provider, Grameen launched a smartphone application last year that allows a
community worker on the ground to visit local farmers and deliver information
on crop disease and weather. That worker – an entrepreneur funded by Grameen –
also collects data on farming trends and sends it through a smartphone to
Uganda’s agricultural regulatory agency.
“Tech is an enabler, not the end goal,” said David Edelstein, vice
president of technology programs for Grameen. “It’s about putting
information into people’s hands and empowering them.”
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