Cell Phone Mashup: Mobile Microfinances to Eradicate Poverty

Today Grameen Phone has more than 10 million subscribers, connects 100 million people through 250,000 phone ladies, who buy phones on microloans from the Grameen Bank and lease air time to villagers to make a living after paying off their loans. Today a phone lady earns on an average $750 a year, which is double the average annual income of a Bangladeshi. Grameen Phone has revenues of $1 billion and annual profits of $200 million.

Despite the success of microfinance around the world, nearly two billion people still lack access to financial services. In several countries, technology approaches are emerging that have the potential to bring financial services to those that microfinance has found difficult to reach up to now. Brazil’s banks use 90,000 electronic terminals in retail outlets as a low-cost channel for hard-to-reach areas. Millions of people in the Philippines receive remittances and make purchases using their mobile phones. Banks in India are sharing their technology platforms with microfinance institutions (MFIs) to expand their product range and reduce costs. Mobile technologies can be used to serve those without access to formal financial services.

Mobiles will be the PC for the people who don’ t have the resources to get computers and connect to the Net. Some 70-80% of poor consumers in the world are still without mobile phones, but millions of subscribers are added each year as the price of handsets drops and coverage expands.

Research by the London Business School has shown that 10 phones per 100 people add 0.6% to the GDP of a country and the United Nations estimates that 0.6% growth cuts poverty by 1.2%. 4 billion people living on less than $2 at the bottom of the pyramid. A recently report estimates that these 4 billion people in poverty are a $5 trillion market.

Our inspiration is the notable story of Grameen Phone. The project will provide rural families in the Andes of Peru with access to microfinancial services in their communities for the first time. The project will in particular employ an extremely economical open source technology for cellphones, " OpenMoko ", which support all Web2.0 services and an unique, cost-efficient and effective way to deliver, commercialize and financing these services.

In lay terms, we want to be an open platform to make it easy to reach the lowest-income markets using cell phones as an input device and a sales channel for companies and organizations serving the bottom of the pyramid.