The Bill and Melinda Gates Foundation has granted US$1.7 million to PlaNet Finance to fund a mobile banking project aimed at providing microfinance clients with enhanced access to banking services. The project was co-developed with mobile operator Orange and is attempting to facilitate cost-effective access to microfinance services and products for microentrepreneurs living in remote areas who cannot afford the time or the money to travel to the nearest bank or microfinance institution.
The foundation’s grant will support PlaNet Finance’s efforts to include microfinance in the early development stage of mobile telephony as a tool for banking services. It will enable PlaNet Finance and its partner Orange to implement and evaluate its mobile banking platform and solutions for microfinance institutions in Senegal, and then expand this program to three other countries: Jordan, Egypt and Ivory Coast.
“With this Project, we will help bank the unbanked,” said Enzo Cicchirillo, IT expert for PlaNet Finance.
A The Consultative Group to Assist the Poor (CGAP) paper that Microcapital Monitor summarized highlighted some of the ways in which mobile banking benefits microfinance. The mobile phone can operate as a virtual bank card, a point-of-sale (POS) terminal, an automated teller machine (ATM) and a laptop for internet banking. These are all services that otherwise might be largely inaccessible to the poor by nature of their location and cost. The bank would incur higher investment costs pursuing internet banking and is instead able to ride the market penetration already made by the mobile phone companies.
The press release highlights that 1 billion people have a bank account, but 3 billion have a mobile phone; as such, the opportunity to do outreach is substantial. CGAP’s CEO Elizabeth Littlefield recently commented on mobile banking opportunities, “The brick and mortar bank branch system can only go so far. With cell phone service and a local shop handling the cash, mobile banking can reach every village and barrio in the developing world.”
PlaNet Finance was founded 10 years ago and has a history rooted in microfinance services including technical assistance and advisory, rating, funding, investment, micro-insurance and micro venture capital. PlaNet Finance Group has supported 1,500 microfinance institutions and financed more than 30 million microentrepreneurs.
Orange is the key brand of France Telecom, one of the world’s leading telecommunications operators.
Original press release available here.
Scott Everett, Research Assistant
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