Leveraging Opportunity In Africa Though Mobile Banking

Social enterpreneurs help build businesses and strengthen skills, but the people who are running these businesses need a host of "support" services to continually improve what they do and how they do it. One of the issues that business people in the developing world point to as a serious constraint on their growth is access to capital. For example, how might a start-up business in Rwanda get access to capital to help improve their facilities, create marketing products, hire a manager, etc.?

They may or may not go to a bank. Most of Africa's rural poor are unbanked. In part, this is because the banks aren't there for them, in part it's because banking costs can be high, especially burdensome for the poor, and other issues, such as comfort level, also factor in. This leaves options like family and friends for loans, moneylenders and, increasingly in Africa, microcredit. But microcredit hasn't spread as far and as fast in Africa as it has in Latin America and Asia (more on this in another post).

That's why the development of M-banking (mobile banking) services are potentially so exciting. M-banking allows people to receive and move money through their cellphones. And, because cellphone use has grown so rapidly in Africa (much more rapidly than the use of microcredit), the technology has the potential to reach millions of people quickly, making it easier, safer, and less costly for them to do business and establish credit histories with vendors. I'm not sure if people are classifying M-banking as "social enterpreneurship" but it certainly helps to leverage the work that social entrepreneurs do.

Here is an interesting report on this growing field.

- Karol