Just a couple days ago, Michael Diamond, Obopay’s SVP of Business Development, revealed to us all that he is a “community columnist” for his very own local newspaper. I, for one, would never have guessed! Anyway, he writes about 6 articles per year to send into the paper, and for his most recent article, he chose to write about our recent Bank A Billion partnership with Garmeen Solutions. It’s a little long for a blog I suppose, but if its good enough for a page on the Post-Crescent Paper, its good enough here.
The poet Emily Dickinson famously observed that “hope is the thing with feathers.” Perhaps if Ms. Dickinson were alive today, she’d agree that hope might also be a thing with a silicon chip and a ringtone.
There are now 3 billion mobile phones active around the world, according to the GSM Association. If that figure weren’t arresting enough, try this one: 85 percent of new subscribers today are located in emerging and developing economies.
The transformative impact of mobile technology and its ability to create “leapfrog” advantages for societies became apparent several years ago when many Latin American countries became the first where mobile phones outnumbered traditional land-lines.
Without mobile phones, many of these people would be further left behind by a world with more sophisticated and cost-effective access to communication. Instead, they leapfrogged the problem and aren’t looking back.
This same transformation is starting in other parts of the globe, and the next several years promise to be exciting as the poorest people begin to access many of the same services that you and I take for granted in our own lives.
Much has been written over the past few years about the challenges facing the world’s “bottom billion,” and how a number of systemic problems having to do with lack of services, education and responsible government keep these people mired in poverty.
The standard of living in the rest of the world is advancing, in some cases rapidly, while the poorest people are left further and further behind.
One of the greatest tools for transforming lives is access to basic financial services. This fact was powerfully demonstrated by Dr. Muhammad Yunus, an economist in Bangladesh who believed that extending micro-credit to the very poor would enable them to invest in their small businesses, and tap into their ambition and innate creativity. “Micro-credit” means making loans in very small amounts — perhaps only a few dollars.
Many of the loan recipients were poor women who were cut off from opportunity by local gender customs as well as geography. Because of the extraordinary gains many poor people experienced, plus his perseverance in the face of doubters, Dr. Yunus was awarded the 2006 Nobel Peace Prize.
Earlier this month, the company I work for and a company founded by Dr. Yunus announced an exciting initiative to marry these two powerful tools together: financial inclusiveness and the mobile phone.
My employer — Obopay — is a pioneer in mobile payments in the U.S. and India. Dr. Yunus founded Grameen Bank to cater to the poorest people in Bangladesh. Earlier this month, in India and Bangladesh, Obopay and Grameen Solutions announced the “Bank A Billion” alliance to use mobile technology to deliver banking services to a billion of the world’s poorest people by 2018.
There are early and exciting examples of how mobile financial services can change lives. Kenya is just one example where a visitor to most Kenyan cities will note the lack of banking services, but also will see the ubiquity of mobile phones and stores catering to mobile subscribers.
People literally bring their cash into the mobile phone store — not the bank — and turn their cash into digital money on their phone, which they use to purchase basic goods and services from others.
In recent years, we’ve all been hearing — and living — the ways in which technology can fundamentally re-order established channels of distribution. The mobile phone has the ability to re-order established financial systems, and in many of the poorest countries, those financial systems are frequently fraught with exclusiveness, expense and corruption.
I believe that, in the next few years, people will begin to leapfrog the system in which they live and transform their lives by leveraging their own creativity and ambition.
This alliance between Obopay and Grameen will attract many participants. The mission of the Bank A Billion alliance points to the fact that this is not about business as usual.
While there are strong commercial opportunities for Obopay’s mobile payments, we will keep our eye on one of the things that we find energizing about the business that we’re in — the power to change lives through a device that can be found on the belts or in the bags of people in every country.
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