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Cellphone Banking Helping To Fight Poverty In India
An anonymous reader writes "Technology Review is running an in-depth story about the way cellphone banking is transforming the lives of many poor people in India. By enabling users to manage a legitimate bank account and finance micro-loans, cellphones are a major force of social and economic change. It's perhaps not surprising, given that despite widespread poverty, India has the world's fastest-growing cellphone market and the second largest number of cellphone users (after China). The article mentions one Indian start-up, mChek, that is thriving as a result. There's also an excellent video report."
This mcheck service is super secure. From their FAQ:
Who else will get my Credit Card information?
mChek will NEVER disclose your Credit Card information to anybody, including to you.
(Emphasis mine)
Cell phones are like computers and the internet rolled into one for those poor people in India.
I bet in the next ten years, markets in India and Africa are going to be the hotspot for 3.5/4G wireless internet service through cell handsets. I imagine that their governments will encourage the building of cell infrastructure because they can see how cell access is helping people become upwardly mobile.
[Fuck Beta]
o0t!
despite widespread poverty, India has the world's fastest-growing cellphone market
I'm guessing that cellphonr technology must be a lot more affordable in India than it is in the U.S.A. Can anyone tell us what cellphone costs are in India, and, if I'm right, why someone can't offer a similar price structure in the United States?
I'm an American. I love this country and the freedoms that we used to have.
I know the mCheck people and they are doing great work. They face 2 major challenges :
1. Getting more and more mobile operators and banks on board.
2. Keeping their cost low. IIRC, each transaction costs them about Rs. 2-3 which is quite high if you think of transaction size of Rs. 20-30
However, mobile penetration is ever-increasing in India. It is one of fastest growing telecom markets in the world. And I've been told of places in India where there is no electricity but the people have mobile phones. (There is an awesome story about how they charge their batteries, but that for some other time).
So mobile is the way to go not just for for democratization of information but also for economic liberation of the people.
Cheers !!!
Of course China and India have the largest cell phone populations in the world... They have more then 1 third of the worlds population between them.
(Know why more people are using cell phones and not land lines? It's a shit load easier to throw up towers then to run cables. And a shit load easier to guard against people stealing the metal for raw materials.)
Cell phones are great for poor people, especially farmers. They can ring up potential buyers before travelling a day to market. (They might travel south instead of north.)
I've also read that they are used to send money back home for people (from the country side who live) in cities. They buy cell phone credit, then they ring a fellow in the home village and tell him the voucher number, and he types it into his phone and gets the credit, and then gives that amount of money (minus a small fee) to the family.
Innovation comes, so often, from necessity.
I wank in the shower.
... in India, they still have banks!!! They're RICH!!!
It does not make sense to you, because you are thinking of progress only in traditional way.
India does not work that way. It is a chaotic system, with a lot of entropy, and has lot of redundancy built in. Normally, you would expect a country/society/country to move bottom to top. i.e. improve life in terms of health, economy and education, then move on to develop better means to accelerate the progress. But it has not work in India. There are lots of social, economical, religious factions and factors why India can not operate that way. It is a country of conflicting priorities.
The result is that we have successful space programs, successful telecommunication infrastructure while still a lot people die of hunger. But somehow, we have still managed to get better - though not in very rapid/efficient way. There are less % of people below poverty line (even if you do not believe government numbers), life expectancy has improved. At the same time, villages are breaking up and cities are clogged.
So, its erratic, and it does not make sense. But we still have just launched our moon mission. Go figure.
Well then it's a good thing we have people like you who can tell poor Indians that they're too stupid to make their own decisions.
Somehow, I think that the person whose life is on the line if they don't spend their money on the right things is probably more qualified than you when it comes to knowing what decisions they have to make to keep them alive.
An "irresponsible lender" who makes loans nobody can pay back isn't really doing himself any favors, you know.
There was a Long Now Foundation talk covering the early stages of this story by Iqbal Quadir. (He was the guy who had the idea that the Grameen bank could fund cellphone purchase in small rural areas). Here's their written summary of the talk: Iqbal Quadir, "Technology Empowers the Poorest" (If you poke around on the site you can find the video of it, or listen to the mp3):
The only places in the world you see the need for microloans are in countries where there is too much bank regulation.
Here is what the Index of Economic Freedom says about Indian banking:
India's 28 state-owned banks control about 75 percent of loans and deposits, and 29 private banks and 31 foreign banks make up the rest. The government owns nearly all of the approximately 600 rural and cooperative banks and most other financial institutions. Banks must lend to "priority" borrowers. Foreign ownership of banks and insurance companies is restricted.
That's why there is microlending in India, the banking system is almost totally an inefficient government monopoly.