A Mobile Money Revolution in the Developing World

Every day, business headlines tell us that mobile is the future of commerce, education, advocacy, and … fill in the blank. To put this into perspective, today, 85 percent of the world’s population has access to a mobile phone with voice and text capabilities, according to a recent report from Ericsson. India and China are growing most rapidly, followed by Brazil, Indonesia, and Bangladesh. By 2018, voice traffic will be very small compared to data, which will grow about 20 times from today’s consumption levels. Although growth varies by region, global data usage doubled in 2011.

This is good news for the developing world, where access to mobile phones is widespread and people are increasingly using them to create new livelihoods, manage their finances, stay informed, and engage with government. For instance, grain traders in Niger compare market prices across the country using their mobile phones, cutting the cost of traveling to different markets, which can result in a 30 percent profit increase. And in Kenya, rural AIDS patients receive SMS reminders to take their anti-retroviral drugs. Not only is this less expensive than in-person reminders, but it is leading to higher rates of medication taking, according to a recent report, Maximizing Mobile, from the World Bank.

Source: Ericsson (June 2012)

There are many exciting mobile innovations geared towards improving lives in the developing world, some based in their local markets and others developed internationally. Here are four noteworthy innovations focused on improving access to financial services and fair wages:

Labor Link

Developed by California-based nonprofit Good World Solutions, Labor Link allows companies to easily communicate information—via SMS and voice recordings—to workers across their entire supply chain, and to collect real-time data from them on satisfaction, working conditions and social impact. This is accomplished via mobile phones and is free to the participating workers. The tool launched in Peru in 2010, having expanded today to India, Brazil, China, Dominican Republic and Sri Lanka. Working so far with brands like Eileen Fisher, Marks & Spencer and Patagonia, Labor Link has served 10,000 workers to date, and is hoping to expand that to more than 100,000 by 2015.


Three quarters of the world’s poor are unbanked, with no hope of accessing basic financial services because of lack of credit scores. This is why InVenture, with offices in Bangalore, has set out to help low-income individuals and small businesses track their daily accounting via mobile phones. This allows them to better manage their finances, and InVenture to collect the data to calculate their credit scores, which will ultimately help them secure better loan terms and be considered bankable. InVenture also offers the data to lending institutions (e.g. microfinance institutions, or “MFIs”) so that they can actively monitor the health of their portfolios to improve visibility into their lending performance. The organization has five lending partners in India, thousands of users, and is growing about 30 percent a month. It’s planning to expand to Kenya in 2013.


Formerly called “Mobile Transactions,” this Zambia-based company allows people to send and receive money quickly and easily through their mobile phones. The vast majority of financial transactions in Africa are done with cash and paper, because in countries like Zambia, more than 80 percent of adult income earners are unbanked and have very limited access to computers. This is a problem, because dealing in cash is expensive, inefficient and insecure. Besides transferring money, Zoona allows people to securely store savings on their phones, receive insurance payouts, and receive and repay loans. It uses a distributed network of agents who serve as live ATMs, collecting and distributing cash for transfers and other transactions. The company is currently processing $5 million a month, with 75,000 active users in Zambia, Zimbabwe, Mozambique, and Malawi.

For another example of a wildly successful application of this type of technology, check out mobile money service M-Pesa, used by at least 70 percent of the Kenyan population and operated by Safaricom, Kenya’s leading mobile network provider.

Kopo Kopo

In the U.S., there’s PayPal; in Kenya, there’s a PayPal-like up-and-comer—Kopo Kopo—also working to solve the inefficient cash economy of Africa. With backing from venture capitalist superstar Vinod Khosla, the 2-year-old startup (which started as a nonprofit serving MFIs) allows Kenyan consumers to pay merchants via their mobile phones, while providing a web-based application that enables small- and medium-sized businesses to accept and track these mobile transactions.  It also allows businesses to analyze buying trends and communicate with their customers—about upcoming sales, for instance—via SMS. The company has recently partnered with Safaricom to enable Kopo Kopo merchants to process M-Pesa transactions. Currently operating only in Kenya, Kopo Kopo hopes to expand into all of East Africa within five years.

The mobile money future of the developing world is promising, but there’s work to be done to ensure that the people who need mobile financial services most—the poorest of the poor—aren’t neglected because telecom companies have little interest in building out infrastructure in rural markets and because mobile services providers’ transaction fees are prohibitive.

Does anyone know of other organizations that are working to resolve these problems? If so, please leave a note in the “Comments” section below.

[Image credit: Nemo, Pixabay]





Lonnie Shekhtman

Lonnie Shekhtman is a Massachusetts-based writer covering sustainable business, food systems, social enterprises and impact investing. Stay in touch by following Lonnie on Twitter: @kuurlyq.

2 responses

  1. Lonnie, what are some of the technological pitfalls that companies and their clients are running into in rural or remote areas? We are in arguably the most stable, protected, and regulated e-commerce environment in the US and Europe… are these companies experiencing any difficulties protecting their accounts?

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