PSD Blog - The World Bank Group

ICT stat of the day

The World Bank's handy annual Little Data Books were released earlier this month. I came across some interesting stats from the Little Data Book on ICT. Between 2000 and 2007, internet subscribers per 100 people in low-income countries grew from only .1 to .8, but mobile cellular subscriptions per 100 people grew from .3 to an amazing 21.5. If you want to reach the poorest countries in the world, it looks like mobile phones are your best bet. No wonder that mobile money and insurance via SMS have taken off.

Straight talk on combatting fraud in mobile payments

Some months ago I saw Nick Hughes of Vodaphone speak about the success of M-Pesa in Kenya. One of the lingering questions from the meeting was how secure a client's money is when it's en route. An interview (below the jump) with Simon Cavall of Mi-Pay Ltd. provides some insight into the steps mobile operators are taking to prevent fraud from tainting an innovative industry.

Conference envy...

I've got a case of conference envy - my colleagues over at CGAP are organizing the second annual Mobile Money Summit to take place in Barcelona June 22-25. I'd gladly fly economy class to attend! 

Mongolia’s landscape equals mobile money opportunity

Mongolia is about the size of Alaska and has a population of fewer then 3 million people.  This translates into one of the lowest population densities in the world.  With almost half the population living in Ulaanbaatar, the capital city, and the rest spread out across the country, it may seem that Mongolia is not the ideal landscape for mobile financial services.  Think again!  Because that's what the key players in the market are doing. 

Last month, I had the opportunity to visit Mongolia to assess the mobile banking landscape there, and I came away surprised by what I found—and excited by the possibilities.

What would Samuel Huntington say about Dev 2.0?

There is little question that the advent of technologies like the mobile phone have been a great boon to economic development around the world. But every new technology brings along with it the potential - or perhaps even the necessity - of disruption. Generally, this kind of disruption is usually a good thing, as it helps break up incumbent (and less efficient) firms, or at the very least forces incumbents to innovate. (I'm thinking, for example, of M-Pesa in Kenya.)

But there is no controlling this kind of process, and the disruptions are not limited to economic life. Social activism gets a boost from these kinds of technologies, and we see everything from an African bloggers conference to highly effective environmental activism. In other words, these technologies hold out a special democratic promise. But therein also lies the risk.

Creative destruction in ICT

If ever there were a moment to witness creative destruction in action, now is it. If I had to bet on a sector that would benefit most from this process in the current financial crisis, it's ICT. My colleage Oleg Petrov in e-Development points me to a recent note from the World Bank on the experience of ICT during the Asian financial crisis. The note argues that creative destruction is exactly what happened during that episode:

...the point here is that the Asian financial crisis was actually beneficial in creating a Schumpeterian "gale of creative destruction" that swept through the failed telecom investment schemes of the mid-1990s (in this case based on narrowband networks) and prepared the ground for a fresh round of investment. The Republic of Korea was arguably hardest-hit by the Asian financial crisis, but it was also in the vanguard of the broadband charge, with the Government taking a leading role, alongside private enterprises...

...financial crises also create openings for disruptive technologies, and here, small companies hold an advantage. Google was born in 1998, in the middle of the Asian financial crisis, while Skype was born in 2003 at the very bottom of the dot.com slump.

Big news in mobile banking

Zain has announced the roll-out of Zap, an initiative to bring mobile banking to millions in Africa. It looks like Safaricom will now have some serious competition. AllAfrica.com has the details:

Providing the most comprehensive and accessible package of mobile banking features currently available on the African continent, Zap will be initially available in Kenya and Tanzania prior to the launch in Uganda.

Zap represents the most comprehensive mobile banking service ever launched and will provide millions of people with access to banking for the very first time.

Another OLPC complaint

OLPC is looking for college students to take on summer internships setting up XO laptops in Africa. Chris Blattman is not impressed:

One thing is for sure, this kind of internship strains my patience. $10,000 for 10 weeks of work delivering laptops? (1) That's 100 laptops right there; (2) $10,000 goes a LONG way in Rwanda; and (3) this strikes me as a job an African would benefit from doing.

Mobile banking takes WING in Cambodia

One of the enterprises that IFC has been working with in Cambodia is WING, a subsidiary of the Australia and New Zealand Banking Group (ANZ). In late January, WING launched a mobile payments business that targets unbanked customers. Last week, I had the opportunity to visit WING’s offices, meet their team, participate in their rollout, and travel to remote areas to visit agent locations. I was impressed by the high energy and creativity of WING’s staff, their incredible progress in a relatively short period of time, their willingness to adapt to new lessons quickly, and the unique aspects of their solution. 

WING’s USSD-based service will allow customers to save, make purchases, transfer money to both WING and non-WING users, and perform a range of other financial services – all through mobile phones. Since WING account numbers do not have to be tied to a customer’s mobile phone number, the service is also available to people who do not own phones. In a country like Cambodia, this feature is extremely important because a large percentage of the population still does not own mobile phones but have easy access via family and friends.

Prior to designing their product, WING performed extensive market research to ensure that they understood the target market and its financial needs. The resultant service was developed in response to those findings. Product development occurred over a 9-month period during which the company performed iterative testing and redesign, mapping their solution closer and closer to the needs of the market.

From mobile banking to mobile money making

What can't a mobile phone do? First, it was mobile payments, then mobile banking, and now mobile phones have become a source of income, at least in rural Kenya. An article in The New Scientist describes a company called txteagle that pays people to complete short tasks via text message:

DAVID, a Masai herdsman from Kisumu in Kenya, answers a call on his cellphone. After listening to the message, he repeats a short phrase in his Masai dialect. He then listens to another short message, and repeats the new phrase. After 30 minutes, he ends the call, having earned enough for a week's worth of personal cellphone airtime.

David is working for txteagle, a service that allows rural Kenyans to earn airtime and money by performing small tasks such as translation and transcription using their cellphones.