In developing countries, most small farmers living in rural communities lack access to a local bank. Their business is often conducted in cash, which carries a number of risks and limitations. Mobile money — an emerging technology that provides convenient and affordable financial services through use of a mobile phone — is working to overcome the geographic and systemic barriers to financial inclusion.

Mobile money allows for person-to-person payments that decrease fraud that can occur in cash transactions, creating a positive investment environment for donors and businesses. FHI 360 programs use this technology to connect communities and entrepreneurs to previously unavailable markets and financial services. Mobile money systems are creating a new generation of entrepreneurs with a verifiable credit history by recording transactions that were previously cash only.

“Mobile money allows individuals to protect and enhance their economic livelihood in both immediate and lasting ways. Mobile money participants typically save more money and are better prepared for unexpected emergencies,” said Shailee Adinolfi, FHI 360 Project Director for two mobile money projects funded by the U.S. Agency for International Development. “FHI 360’s mobile money projects are grounded in research about the communities we serve.”

In Malawi, the Mobile Money Accelerator Program (MMAP) works to increase both the supply of and demand for mobile money products. By demonstrating a market for mobile money in rural areas, MMAP is bringing private-sector investors to communities that otherwise would be passed over. The project aligns the needs of the supplier and the recipient, bridging the competing demands of profit and low-cost access through pilot programs and financial literacy campaigns.

The Mobile Solutions Technical Assistance and Research (mSTAR) project utilizes partnerships at macro and micro levels to increase awareness and use of mobile technology as a tool for human development. The project brings together a coalition of more than 25 pioneers and industry leaders in mobile technology. At the country level, the project joins governments, donors, services providers and customers at the negotiating table to discuss the necessary regulatory environment for implementing mobile money programs and the benefits of adopting these technologies.

“Access to mobile banking and mobile money is growing faster than access to brick-and-mortar banks.” said Adinolfi. “It is important that everyone, especially rural communities, be included in the benefits of these emerging technologies and services.”

PHOTO: © 2004 David Alexander, Courtesy of Photoshare