Video: More mobile phone technologies to benefit the poor

Mobile phone use is growing rapidly, and this fact includes the poor people of the under-developed world. Techies are devising ways for the mobile phone technology to improve the live of those in poverty. Mobile banking is already proving to be a big benefit for the poor, as they no longer have to travel to a bank or wait for their money. Even simpler ideas like text messages with helpful health-care reminders are also being explored.

From the Washington Post, writer Cecilia Kang tells us about a couple of technologies being developed by the Grameen and the Bill and Melinda Gates Foundations.

The Grameen Foundation, a Washington-based group known for helping women with the smallest of business loans, has two dozen people in a technology lab here developing mobile Internet applications to help spread its microfinance model. It's warning farmers in Uganda about banana crop rot through text messages and collecting data on spreadsheet applications on smartphones.

And the Bill & Melinda Gates Foundation has dedicated $12 million to help village farmers in Tanzania, Cameroon and Rwanda save money through electronic mobile phone deposits. It has launched a $10 million contest in Haiti to fund the best mobile banking ideas to channel earthquake relief to people who would otherwise stand in long lines at overwhelmed bank branches to collect cash. (Melinda Gates is on The Washington Post Co. board of directors.)

In all, 5 billion cellphones are in use globally and the most aggressive adoption is coming from low-income and poor communities, where the low cost of phones and the availability of cell networks even in remote areas has fueled the rapid growth. The innovations in development programs are relatively new, and it's too early to predict their success. Political instability and dictatorships make it hard to work with telecom service providers, and some central banks are reluctant to cooperate with companies that could take away their control over their citizens' finances.

Even so, cellphones have broken through bureaucracies and are reaching many who traditionally have been isolated from help. A basic phone that sends text messages can cost $20. A family or village can share one phone, with each person switching out cheap SIM memory cards for access. Kenya and Uganda have mobile broadband networks rivaling those in the United States and Europe that support the iPhone and BlackBerry.
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Cellphones are being adopted faster than even the most basic services such as routine medical care and schools. GSM World predicts there will be 1.7 billion cellphone users by 2012 without a bank account. The nonprofit Consultative Group to Assist the Poor estimates 150 million people receive regular social welfare payments but fewer than 25 percent of them have a bank account in which to deposit those funds, save and build assets. Much of that is because bank branches aren't available in rural areas and transaction costs are high.

As such, the Gates Foundation is trying to replicate a popular electronic banking program in Kenya in 19 other nations including Cameroon and Tanzania. Through M-PESA, a joint venture launched by a British development fund and Vodafone, a Kenyan farmer can deposit a few dollars cash with a local shop owner who converts the cash into electronic currency through a mobile text message sent to a city bank. A local telecom provider acts as the armored money vehicle, circulating the funds electronically, and a bank manages the deposits so that even the poorest can save money - a key to breaking out of poverty, aid workers say.