What the Gates Foundation’s Focus on Mobile Banking Says About the Future of FIs
In recent years, “Melinda and Bill Gates” has become synonymous with charity, giving vast amounts of money to various charitable endeavors, such as polio immunization in the third world.
Add mobile payments and financial services to that list of charities.
Yesterday, the Melinda and Bill Gates Foundation, which is sitting on $36.4 billion of funds, took a major step toward improving the financial services for the world’s poor with about $60 million of grants. In all, the Gates Foundation has $530 million allocated to “charitable” financial services projects.
It is interesting to see where the Gates Foundation is allocating its millions. Here’s the most recent round of grants, announced yesterday:
World Savings Bank Institute (WSBI) (2010-2011)
Doubling Savings for the Poor: $600,000
WSBI will work with major savings banks in developing countries to double the number of savings accounts held by poor people. Building on a $20 million grant to WSBI given in 2008, the program will identify and define viable projects that could be supported to offer affordable, accessible, and sustainable savings accounts with approximately 10 additional WSBI member banks.
Vodacom Tanzania Limited (VTL) (2010-2012)
M-PESA Tanzania Acceleration Opportunity: $4.8 million
This program aims to increase awareness and usage of the mobile money service, M-PESA, in Tanzania, reaching at least 2 million people in 18 months. It looks to improve the lives of millions of Tanzanians, much like M-PESA is doing in Kenya.
ShoreBank International, Ltd. (2010-2012)
bKash Mobile Money Platform: $10 million
This project will work with BRAC Bank Limited to build bKash, a scalable mobile money platform that will allow poor Bangladeshis to store, transfer, and receive money safely via their mobile phones. Within five years, the project aims to bring 17.5 million poor people into the formal financial system for the first time ever.
Consultative Group to Assist the Poor (CGAP)/International Bank for Reconstruction and Development (IBRD) (2010-2013)
CGAP II Technology Program: $6 million
Building on a major grant in 2006, this program will promote the use of branchless banking to increase the number of poor people with access to financial services, particularly savings. Co-funded by the United Kingdom’s Department for International Development and the World Bank, the program includes an innovation fund to support promising approaches and advises banks, microfinance institutions, telecommunication providers, and financial regulators on effective design and regulation.
World Bank (2010-2014)
Global Financial Inclusion Survey: $11.4 million
This program will include 10 financial questions in an existing Gallup global poll to generate first-of-a-kind baseline data on financial inclusion levels across 150 countries. The survey will be issued every three years to measure and track specific data on people’s use and access to formal and informal banking, and financial tools.
The Gates Foundation is clearly being motivated by the mobilization of money, a trend that we see transforming the non-charitable financial services world, too. In fact, the Gates Foundation conducted a study that led it to this mobile-driven FI focus. From the Foundation:
Technologies such as mobile phones are already providing safe, reliable, and easy options for people to access financial services. Sixty-nine percent of the developing world already has a mobile connection, and this number is expected to climb to 98 percent within five years. “Technologies like mobile phones are powering a next-generation banking system,” said Chris Locke, managing director of the GSMA Development Fund. “We now have the opportunity to put this to work for the developing world, offering the poorest people tools to manage their assets and build financial security.”
And for not-poor, too. It’s a mobile world, folks.
Go here for details on the Gates Foundation’s financial services initiatives.
Please login to join discussion
