It can send texts and it can make calls, but can it save the world?
It might seem far stretched, but considering that poverty is often instigated by isolation and the accompanying lack of access to markets, emergency health services, education and governmental representation, it makes sense that economists are starting to pinpoint cell phones as a potential “weapon against global poverty.”
Renowned economist Jeffrey Sachs claims that “the cell phone is the single most transformative technology for development,” positing that providing developing countries with cell phones and widespread mobile network coverage can be instrumental in lifting regions out of poverty.
In the last 8 years, the United Nations Millenium Villages Project has aimed to improve 14 rural villages across 10 African countries by providing the framework for mobile connections. They have found that countries’ GDPs increased in a way that mirrors the nearly 400% increase in cell phone use in Africa over the last 5 years.
Kenya may be the poster child for the mobile movement with its tremendous GDP growth and innovative M-Pesa or “mobile-money” concept that has the country on an economic upswing. Researchers found that “70” was the magic number: 70% of the Kenyan population owned a cell phone while 70% of the population also reported no access to a bank. Hence, the concept of mobile-money was born.
Beginning in 2007 as a way to send people microloans, M-Pesa’s mobile-money became the main way to send money instantly from urban to rural areas. Mobile-money allows people to digitally transfer cash and utilize other banking services via mobile phones, thus facilitating trade and boosting business in a way that is vital for the country to thrive.
This mobile-money concept is great for Kenya’s large informal economy sector by releasing the flow of money that is often stagnant in developing countries with unstable infrastructures.
What’s more, cell phones are now the least expensive they have ever been, thanks to Safaricom, a Kenyan telecom provider that set up business models for selling services to the poor and thus made cell phone use more affordable. Thanks to the low cost of setting up mobile towers and the decreasing cost of cell phones, Kenya now may have more widespread cell phone coverage than many regions of Europe.
Some may argue that the best part about the cell phone solution is that businesses, rather than the government, drive the movement’s momentum. Having businesses like Safaricom at the center of the progress curbs the chance of corruption and unequal access that usually accompanies governmental initiatives, particularly in developing countries.
Other countries around the world are starting to take interest in the transformative power of the cell phone. From its success in Kenya, Safaricom is now bringing its mobile banking model to areas like Bangladesh, Uganda, and Gambia with the hope of expanding more in the future.