Monday, January 03, 2011

Bankers Trick? - Cell Phone Banking For The Poor

What stands in the way of global access to financial services? It may come as a surprise, but the single biggest obstacle is cash. In short, cash is expensive.

The poor tend to live in an entirely cash-based economy. But banks find it too costly to sustain branches in disadvantaged areas to collect the small amounts of hard cash that poor people can save. So poor customers have to travel miles just to make a deposit – wasting time and running up transport costs.

We can’t make cash go away. But we can make it easier to transform cash into electronic information, which is all a bank account is, really. Once money is “de-materialized,” it can be sent around electronically at very low cost. The fastest, most convenient way to achieve this transformation globally is to use the stores that exist in every neighborhood and every village as banking surrogates.'


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