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Guest editor Bill Gates
Can mobile banking revolutionize the lives of the poor?
By Ben Popper
We're excited to have Bill Gates as our guest editor in February. Throughout the month, Bill will be sharing his vision of how technology will revolutionize life for the world's poor by 2030 by narrating episodes of the Big Future, our animated explainer series. In addition, we'll be publishing a series of features exploring the improvements in banking, health, farming, and education that will enable that revolution. And while the topics reflect the bets Bill and his wife Melinda are ...view middle of the document...
The majority of Sori women interviewed for the study now keep their savings in M-PESA accounts, safe from criminals and wasteful purchases.
M-PESA also revolutionized how the women sold their goods. Prior to M-PESA, the women worked only in cash. To sell their fish, the women would have to travel by bus to markets, trips that cost them money and time. Since the adoption of M-PESA, the women send the fish to market by bus and receive payment remotely. "Where it may have taken a woman a week to sell two bags of fish in Nairobi, she now spends one morning buying and sending the fish on a bus to Nairobi for sale by her customers," reports the study. With their newfound savings, women reported being able to make long-term investments: sending their children to better schools and building themselves more durable homes to withstand seasonal floods.
When we asked Bill Gates to edit The Verge this month, he pointed to digital banking solutions like M-PESA as a technology that will revolutionize the lives of the poor in the near future. "In the next 15 years, digital banking will give the poor more control over their assets and help them transform their lives," he wrote in his annual letter. "By 2030, 2 billion people who don’t have a bank account today will be storing money and making payments with their phones. And by then, mobile money providers will be offering the full range of financial services, from interest-bearing savings accounts to credit to insurance."
Mobile money is a fast-growing industry across many parts of the developing world. But can it really transform the lives of those living on just a few dollars a day?
Of the 2.5 billion people in the world who have no access to a traditional bank, approximately 1 billion have a mobile phone. The widespread adoption of mobile phones has enabled some of the poorest economies on earth to leapfrog ahead of developed nations when it comes to tech-driven financial solutions. A report in The Atlantic noted that adults in Sub-Saharan Africa are three times more likely to use mobile money as their counterparts in Europe and the Americas. In fact, another recent report found nine African nations now have more mobile pay accounts than traditional bank accounts.
Sub-Saharan Africans are three times more likely to use mobile money as Europeans and Americans
Kenya is frequently cited as a successful example of how mobile money can dramatically transform a country’s economy. In 2006, less than 30 percent of adults in the country had access to formal financial services. Thanks to M-PESA, today that figure stands above 65 percent. Developed by telecom giants Vodafone and Safaricom with the blessing of the Central Bank of Kenya, by 2010 M-PESA was considered the most successful mobile money service in the developing world. In 2014, the service processed over $20 billion in transactions, a figure equal to more than 40 percent of the nation’s GDP.
Widespread adoption has bolstered Kenya’s economy, says Dr....