Waiting for the Call

US Banker: Waiting for the Call (Cellphone banking in emerging nations.)

Cellphone banking is emerging as an important link that could bring the most basic financial services to the globe’s billions of unbanked cellphone users. Bringing the unbanked into the formal economy is a key initiative of various players—payments processors, financial-services firms, telecommunications firms—but it, like the developing countries most affected, is a work in progress.

The obligation for financial institutions is to serve as the foundation on which such socio-economic progress can rest.

In battling poverty in the developing world with affordable financial services, there is nothing quite as democratizing as the ubiquitous cellphone. Few proponents of economic growth would quibble with the belief that banking integral to the foundation that society is built on, but a full one billion of the globe’s five billion cellphone owners have no access to financial services. That makes mobile banking the perfect way to bring the unbanked and underbanked into society’s fold, according to the International Finance Corp., the World Bank’s private-sector investment arm that is investing in a dozen mobile-banking operations in poor regions of Asia, Africa and Latin America.