By Gautam Ivatury and Mark Pickens, published by the Consultative Group to Assist the Poor/The World Bank and the United Nations Foundation, Nov 2006, 19 pages, download here: http://www.cgap.org/publications/mobilephonebanking.pdf
This paper reports on a study designed by the Consultative Group to Assist the Poor (CGAP), an NGO which was founded by several multilateral agencies, international financial organizations and interested private organizations to promote the development of financial services for the poor. The study was funded by the United Nations Foundation, a public charity which supports private-public partnerships, and the Vodafone Group Foundation, a charity founded by the mobile phone company Vodafone. The study was based on a survey of 515 low-income South Africans, 215 whom used the mobile phone-based banking (m-banking) service, WIZZIT, and 300 who did not. The first section of the paper introduces WIZZIT, which is a division of the South African Bank of Athens, specifically targeting South Africa’s “unbanked population.” It was launched in December 2004 and currently has 50,000 customers. The m-banking accounts allow customers to make bill payments, check their account balances, and make transactions using their mobile phones. Additionally, the customers are provided with debit cards which they can use to withdraw money from any ATM. Customers are able to make cash deposits into their account at all Absa Bank and Postbank locations. WIZZIT accounts have no minimum balance requirements and charge a per-transaction fee. The second section of the paper reports the findings of the survey. The authors note that low-income customers are pleased with WIZZIT’s service because it is safe, convenient, fast, and cheaper than alternative banking methods. The data also showed that WIZZIT’s low-income customers were better off, as well as more financially sophisticated than low-income non-users prior to using the service. Both customers and non-customers said they were willing to try new technology, but human interaction was still important to them. Finally, the study showed that most non-users had not heard of WIZZIT. The third, and final, part of the paper draws general conclusions from the research findings. It encourages other m-banking providers to build greater awareness of their services and emphasizes the ability of m-banking to provide financial services to the poor in developing countries.
By Drew Rifkin
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