February 19, 2009
Bill and Melinda Gates Foundation has teamed with the GSMA, a worldwide consortium of mobile industry players, to create the Mobile Money for the Unbanked (MMU).
The idea behind the project is to create economic opportunities through mobile banking in emerging markets by supporting mobile money deployments targeting the unbanked.
The Gates Foundation pledged $12.5 million in funding.
While it may seem an odd juxtaposition – bringing mobile financial services to regions before standard banking services are established – economists believe access to formal financial institutions spur economic growth. In addition to that theory, which is backed by the World Bank, economists also suggest there is a direct correlation between mobile communications and economic growth.
The MMU plans to unite industry players with a view to sharing market information, educating the market regarding economic opportunities for mobile banking, and supporting mobile money deployments targeting the unbanked.
The MMU says its goal is to enable 20 million un-banked consumers to have access to financial services by 2011 by brining together mobile operators in developing countries, banks, microfinance institutions, governments and development organizations.
The $12.5 million from the Gates Foundation is earmarked for supporting 20 individual projects in Africa, Asia, and Latin America. In addition, $5 million of the grant is being used toward expanding and encouraging mobile network operators to create new services for previously unbanked people.