Beyond Smartphones: Mobile Banking in Developing Countries

In 2010, the Bill and Melinda Gates Foundation announced a $500 million commitment to supporting technological advances in financial basics (Financial Services for the Poor program). Many of the initiatives that this program has been involved in have been for increased mobile banking — to make it possible for people to save their money, where previously they were entirely tied to cash.

In many poor, rural areas, there is no easily accessible bank. The resultant inconvertibility of cash means that there is no opportunity to save, and “it is nearly impossible to break the cycle of poverty without access to savings in a bank.” But with mobile banking systems, a cell phone can be used to deposit money in savings, to pay for goods and services, or to send money to family members. The dangers associated with cash (robbery, physical destruction of some sort, etc) are  nearly erased, and the positives of banking are gained even without access to a bank building.

This is what’s called a leapfrog scenario — in many of the places that these mobile banking systems have been implemented, there is no way to develop a solid telephone structure, but the more technologically advanced cell phone network can be set up easily and is incredibly accessible. The same goes for traditional banking and mobile banking — skipping over one step to take full advantage of the next advancement.

These mobile banking systems have been set up in Kenya (M-Pesa), India (Eko), Cambodia (Wing) and Haiti. When talking about electronic banking and a potential cashless future, it’s important to remember that mobile banking means more than the convenience of Google Wallet on an iPhone.

Haiti – MercyCorps

After the 2010 earthquake in Haiti, aid organization MercyCorps began using a mobile wallet system to distribute vouchers for food aid — rather than actual physical vouchers.

Printing, food distribution and security costs were expensive, amounting to 20 percent of the program budget.  Depositing the small monthly allowances directly into accounts set up on participants’ mobile phones eliminated overhead, Oakes says.

MercyCorps also began helping the Haitian government set up a mobile wallet program for banking as well, taking it into a larger financial realm than just food vouchers.

Kenya – M-Pesa

Over 50% of the adult population use the service to send money to far-flung relatives, to pay for shopping, utility bills, or even a night on the tiles and taxi ride home.


Graham, Fiona. “M-Pesa: Kenya’s Mobile Wallet Revolution.” BBC News Online. 22 November 2010.

Rosenberg, Jim. “Why has M-PESA become so popular in Kenya?” CGAP. 17 June 2008.

Wilson, Kimberly A.C. “Mercy Corps mobile wallet innovation brings purchasing power to Haitians’ cell phones.” The Oregonian, 26 December 2010.

Wolman, David. The End of Money: Counterfeiters, Preachers, Techies, Dreamers – and the Coming Cashless Society. (Boston: Da Capo, 2012).

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