Friday, March 29, 2013
Mobile Technology for Human Welfare
The economies of developing nations are structured such that there are a lot of poor families who can barely afford the basic amenities required in life. To make their living, they need to start a business. Any business requires initial investment of money which these people do not have. Also, they do not have access to loans from banks and as such are caught in a vicious cycle of poverty. The economic principles of microfinance and microcredit have turned out to be a boon for these people. The principle of microfinance entails providing small cash loans to people in rural areas of developing nations to start a business with no or very little interest rate. Although this has turned out to be a great success, the principle did not penetrate the market as much as it was expected to. The social entrepreneurs turned to technology to address this issue, specifically mobile technology as explained below with Africa's example.
Africa has experienced an unbelievable explosion in mobile phone use over the past decade. In 1998, there were fewer than four million mobiles on the continent. Today, there are more than 500 million. In Uganda alone, 10 million people, or about 30% of the population, own a mobile phone, and that number is growing rapidly every year. The mobile devices are a way of life for the African people. The most dramatic example of this is mobile banking. Four years ago, in neighbouring Kenya, the mobile network Safaricom introduced a service called M-Pesa which allows users to store money on their mobiles. If one wants to pay a utilities bill or send money to a friend, one simply dispatches the amount by text and the recipient converts it into cash at their local M-Pesa office. It is cheap, easy to use and, for millions of Africans unable to access a bank account or afford the hefty charges of using one, nothing short of revolutionary. And the people deploying microfinance have utilized this simple technology to help millions of people earn their way out of poverty.
The use of mobile technology in Africa for solving century old problems is a refreshing advertisement for technology and its hand in human welfare.