Mobile Banking: Alleviating Global Poverty

We use it to store memories, jot down our thoughts, navigate cities, listen to music, and update our Facebook statuses. For better or worse, cell phones are an extension of who we are. Many cannot envision a day without their trusty mobile friend at arm's length. The tiny technological wonder that wakes us up in the morning and keeps us connected with our family, friends, and colleagues has changed the world, yet not in a way you think.

Every day 2.5 billion people in the world live on less than $2. Often institutional services that are readily available in developed countries, like banks, are usually not easily accessible in poorer countries. Amid the array of reasons that people live in poverty, not having accesses to a bank is one of them. Until now.

Mobile-based financial tools are increasingly available to the world's poor. According to a recent article in Foreign Affairs, mobile coverage now covers roughly 90 percent of the world's poor. Cell phones are commonplace in the developing world and this "presents an extraordinary opportunity: mobile-based financial tools have the potential to dramatically lower the cost of delivering banking services to the poor." With the aid of microcredit programs and banks many of the world's poor can now save and transfer money to love ones from the palm of their hands. As the authors of the article have noted, "[in] the right hands...access to financial tools can stimulate underserved economies and, at critical times, determine whether a poor household is able to capture an opportunity to move out of poverty..." Cell phones are more than just accessory: they are a force for good.