It has been upon us for quite awhile now, but the cell phone and its potential to not only connect but serve as a medium by which to transfer and protect investments is groundbreaking for the developing world. The first biggest hurdle was getting the cost down. Once cell-phones became available for under $30 is when real growth began to boom. Second was pre rather than post-paying. As long as something is pre-paid background checks, collateral, and all of the red-tape that typically envelopes most financial/property transactions is rendered mute. Third was regulatory and government support in opening up this sector, but this has been and will continue to be a win-win for all.
So where are we now? Well, we have millions of individuals residing below the poverty line with access to a phone. The phone is used to link up small business transactions, communicate prices from local markets to rural farmers/producers, engender mobility thereby facilitating demand … and the list goes on. Even more remarkable are the money transfer services. Some companies have enabled subscribers to transfer money via the phone to outlets who dispense cash for a percentage of the transaction. Take this a step further and you can also retain “money” on your cell-phone which serves as a type of savings account.
This last point is critical as savings in the developing world is virtually non-existent amongst the poorest of the poor. Not only is banking access quite limited, but when someone does want to save they must find a physical place to hide the money or the asset. The possibility of theft is through the roof in cases like this.
It has long been touted that connecting the developing world to broadband will be critical. I agree, it is, but we then need to factor in a multitude of secondary issues, literacy being one of them. The internet and its power are magnificent if you can understand what is being communicated. Someone with even the most basic of education can utilize a phone and build assets which is not true as of yet with a computer and the internet.