Archive for: Maldives

Karuna Krishnaswamy works with the CGAP Technology Program.

One day each way – costing nearly US$10 total is what some Maldivians who have a bank account have to pay in order to exchange cash.   The archipelago of the Maldives is about 1,600 kilometers to the south of Mumbai. I was there recently – not for a vacation but to begin work on a nationally-representative survey of the 300,000 people who live there. Working with our partners, we want to know how people use banking services: What are the usage patterns, transaction costs, levels of mobile network penetration?

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Thursday, Dec. 11 from 2pm – 5pm Eastern we’ll have a live webcast from the World Bank in Washington and if you can’t join us in person, join us online here at the CGAP Technology Blog.

We thought it would be great to get some of our partners together to share what they’re doing with each other – and with you. Share your questions at the end of this blog post, as a comment. We’ll put  them to the panelists on Thursday. Here are the details:

Mobile Banking for Poor People: Pioneer Perspectives
a CGAP roundtable and webinar

Dec. 11, 2008 | 2:00pm – 5:00pm
World Bank Headquarters, Washington DC | online at http://technology.cgap.org

Join CGAP for a lively discussion on how mobile phone banking can deliver a range of financial services to poor people and change lives for the better.

By the end of 2008, the UN says there will be four billion mobile phone connections globally. Millions of air-time resellers and retail agents in developing countries make it possible to distribute financial services at far lower cost than through traditional channels.

Yet in many ways, it is still early days for mobile phone banking. Examples of successful large-scale implementations that target poor customers, and deliver products other than payments and transfers are rare. CGAP, with support from the Bill and Melinda Gates Foundation, is working to increase the numbers of such successful m-banking projects. CGAP has provided technical advice, market research and funding to the following organizations. The goal is to increase the reach and scale of financial services for poor people worldwide.

Panelists
-Nick Hughes, Vodafone Group
-Rizza Maniego-Eala, Globe Telecom (Philippines)
-Sam Kamiti, Equity Bank (Kenya)
-Ali Abbas Sikander, Tameer Bank (Pakistan)
-Ganhuyag Ch. Hutagt, XacBank (Mongolia)
-Brian Richardson, Wizzit (South Africa)
-Carl Johan Rosenquist, c/o Maldives Monetary Authority (Maldives)

Hear real-world experiences with implementing mobile banking solutions at scale, in multiple markets, with a diverse range of clients.

What do these countries have in common: Kenya, Pakistan, Mongolia, the Maldives? They share political challenges, conflict, as well as having highly dispersed populations across varied types or terrain.

They are also pioneers when it comes to mobile phone banking. Here’s why.

For financial services, there are few alternatives to cell phones. Banking infrastructure (branches, ATMs, POS at stores, internet penetration, etc.) in these markets is dismal and slow to change, but cell phone penetration is growing fast. There are four mobile operators in Mongolia, a country with the world’s lowest population density (1 person per sq km) and where 400 villages are spread across a vast geography the size of the lower 48 US states.

People incur high transaction costs to reach established banking services. Banking via cell phones at a local store can make a big difference in the lives of poor people who easily travel 20 or 30 miles just to get to a bank branch. In the Maldives, government employees and fishermen alike on one island must travel 4 hours by boat once a month to Male’, spending Euro 2.50, simply to deposit or collect their salaries.

High cost environments create demand for new ways of doing things. In countries like Kenya and Colombia, high crime and difficult geographies make it extremely expensive to move cash. In this context, technology-enabled banking channels that cut the cost in half can be game changing. Electronic means of moving cash are attractive when people are often vulnerable to theft. It is still quite common in Kenya and Philippines to hand an envelope stuffed with cash to a bus driver headed to family up-country.

Financial institutions are looking for alternatives in order to gain market share. Tameer Bank in Pakistan, Equity Bank in Kenya, and XacBank in Mongolia have staked their reputations and their business success on breaking the mould of doing business in their country. They are microfinance banks, but they want to reach millions of new clients quickly and it is not easy to do that with capital and labor intensive branch networks.

Political turmoil does not stop these companies that easily. In the past year, both Kenya and Pakistan experienced political violence. Almost a week after Tameer Bank found a telecom partner for mobile banking, two of its branches were looted and destroyed in rioting in the aftermath of Benazir Bhutto’s assassination. 72 hours later the branches were up and running again.

Happy Monday…this Monday is more auspicious than most because it’s the start of our three day conference looking at how technologies such as card-based networks and mobile phones could increase access to finance. IFC is a co-organizer, and Visa is a sponsor.

Want to know more? Visit here for the full agenda.

We’ll be posting presentations as we get them…and this link should take you to a live video stream of the event.