Press Coverage
WB body plan to deliver banking services to poor
WB body plan to deliver banking services to poor ISLAMABAD: The Consultative Group to Assist the Poor (CGAP), a 33-member, independent institution housed at the World Bank, will test cellphone banking, ATMs, card readers and other technologies in 40 developing countries, including Pakistan, to ensure the delivery of banking services to the poor. The CGAP and partner Bill & Melinda Gates Foundation set the plan in motion on Monday, Feb 5, with announcement that the Gates Foundation will contribute $24 million to the CGAP's $2 million technology and microfinance initiative. According to the CGAP, five years from now millions of people in even remote regions of developing countries could be doing their banking with cellphones or other high-tech devices. That's the goal of a $26 million programme that will use technology to deliver banking services to the poor around the world. If successful, the programme will help developing countries 'leapfrog' many stages of financial sector development and 'make it possible for people anywhere, anytime, to have access to all kinds of financial services,' says Elizabeth Littlefield, CEO of the Consultative Group to Assist the Poor. The CGAP programme will fund 20-30 experiments in 15-20 countries, each lasting 2-3 years. Nine projects have already been selected from 71 proposals from 40 countries and will test cellphone banking, ATMs, card readers and other technologies in Kenya, South Africa, the Philippines, Pakistan, Colombia, Mexico, the Maldives, and Mongolia. In the area of cellphone banking, the plan is to take advantage of an explosive growth in cellphones in the developing world to extend banking services to as many people as possible. The number of cellphone subscribers has doubled in the last two years to two billion. In Africa alone, it has jumped from seven million to some 80 million in five years, says Littlefield. Cellphone banking has already been tried in more than 10 countries and is taking off in places such as the Philippines, Kenya and South Africa, she says. 'Poor people are very willing to use cellphones as a basis for moving money around. In places like the Congo, cellphones are being used to transfer money around the country, circumventing the banking system as well as the more traditional money transfer.' The bottleneck in delivering microfinance services such as savings accounts, money transfers, and loans to poor people has been the cost of 'making tiny little transactions in sometimes rural areas' using traditional banking practices. Cellphones and other technology can cut the cost of such transactions and make widespread microfinance economically feasible. 'The bottom line is that there is no way you're going to reach the last mile with financial services unless you do it with technology, because it's always simply going to be too costly to do that with human service agents,' Littlefield says.
| ||||||||||||||||||||||
Press Coverage 
