Through the process of mobile transfer, recipients in villages have empowered themselves economically to pay for urgent health care delivery, education of their children and wards, clothing, accommodation, travel and sundry other needs that village dwellers have. Village dwellers in the developing world have one common problem when dealing with daily survival tasks like health care delivery, food, travel, trade, education and more. That common problem is access to cash. Long distances separate them from banks and automated teller machines (ATMs). Therefore, they need help paying for urgently needed products and services. This situation compounds their poverty.

Farmers, craftsmen and producers often have to wait for designated market days to sell their products for badly needed cash. During days in between, they have to endure extreme lack and deprivation and sometimes, the conditions of sick persons get worse and in some cases may lead to death. Even when relatives living in cities or abroad have the means and desire to assist their kin, they cannot do so due to the non-existence of rural banking or cash points/ATMs. However, the situation is now improving. The introduction of mobile money transfer technology enabled by widespread ownership of mobile phones in rural areas and the emergence of several network providers has brought relief to village dwellers. In Nigeria, Mobile Telephone Network (MTN) introduced MTN Mobile Money, popularly called MOMO and its impact on the villagers is like a miracle.

The MTN mobile money transfer launched in Nigeria on August 29, 2019. Although it had been operating in smaller African countries including Ghana and Cameroon, its potential to affect a larger population and therefore be able to lift more people out of poverty on the continent is bigger in Nigeria.

Definition of Mobile Money

The Centre for Economic Policy Research (CEPR), Europe’s leading network of Economic Research defines Mobile Money as follows: “Mobile money refers to financial transaction services potentially available to anyone using a mobile phone, including the unbanked global poor who are not a profitable target for commercial banks.”

A blog on the World Bank website further defines mobile money as “……Services whereby customers use their mobile device to send and receive monetary value – or more simply put, to transfer money electronically from one person to another using a mobile phone.”

For the village dweller, the rapid transaction that results in ready cash for his immediate needs is a miracle. Relatives and buyers of products and services across the globe can remit money home or pay for services rapidly. Through the process of mobile transfer, recipients in villages have empowered themselves economically to pay for urgent health care delivery, education of their children and wards, clothing, accommodation, travel and sundry other needs that village dwellers have.

What is the Attraction of Mobile Money Transfers?

• Lower Costs of Transactions: To the village dweller, the costs of transportation, time and risks going to the cities and towns to receive or deposit money in banks are drastically reduced.
• Ready Availability of Cash: The ready availability of cash to meet urgent needs is the most significant attraction.
• Empowerment and Ability to Save: Women and young people will empower themselves when they receive money through their phones. The privacy of transactions enables them to save.
• Economic Growth: The village economy grows with the ability of recipients to engage in buying and selling, especially during harvest seasons.
• Earning Money: Mobile money transfer agents earn money from their charges and can meet their immediate family needs.

The Impact

In a study conducted on the impact of mobile money transfers on rural dwellers in the Niger Delta region of Nigeria. The conclusions found that: 

1. It empowered rural women to become economically independent of their male counterparts in critical decision-making about themselves as well as increasing their capacity to save. Similar studies in Kenya and Bangladesh validated this as well.
2. Mobile money enhances the informal insurance in the community against natural disasters through sharing.

Looking Ahead

The full impact of mobile money transfers on alleviating global poverty in rural areas continues to unfold as new studies into the technology and its application emerge. Many more countries in the developing world are now catching up to the miracle of mobile money transfers. It enables governments to put into practice the policy of financial inclusion that international financial institutions have advocated for as the gateway to alleviating global poverty.

– Friday Okai
Photo: Flickr