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50 for 50: History of Mobile Banks

By Opportunity International

Opportunity International has been at the forefront of mobile banking for decades. As technology has developed over time, so has our ability to reach and serve those living far from urban centers—those who are often most in need of resources and support.

Research estimates that 80% of people living in extreme poverty live in rural regions, primarily in sub-Saharan Africa and parts of Asia where low population density and poor infrastructure make it difficult for individuals to access traditional financial resources. Historically, without access to brick-and-mortar banks, families in rural communities were cut off from critical services like credit and savings accounts—and therefore unable to easily plan for and invest in their futures.

Reaching Rural Communities: Introducing Mobile Banks

To propel widespread financial inclusion, Opportunity began its mobile banking program in the early 2000s, first with large mobile vans and then with smaller trucks and 4x4 vehicles that provided rural areas with secure, accessible banking technology. In partnership with global leaders like The Mastercard Foundation and The Bill & Melinda Gates Foundation, we brought banking to communities that had historically been excluded from formal financial services.

Working in tandem with our emerging Agricultural Finance initiatives, these early mobile banks served rural clients, the majority of whom worked as farmers. Operating much like an ATM on wheels, they traveled from village to village all week long, serving between 1,800 to 5,000 clients in rural communities. For families who couldn't travel to a bank, these mobile banks brought all of the essential resources and services directly to them.

Often, these mobile banks provided a client's first-ever experience with banking.

Leveraging Mobile Technology: Introducing Cell Phone Banking

In the early 2000s, mobile access exploded in Africa. The African Development Bank noted that it is the "fastest emergent continent" for the Information and Communications Technology sector, with a 2000% growth rate in mobile phone ownership between 1998 and 2009. By the late 2000s, continued limited access to traditional banks and exponential growth in mobile phone use encouraged an innovative and widespread solution to financial inclusion: cell phone banking.

Some of the earliest mobile banking service providers like M-PESA, which launched its pilot program in 2005, allowed users to make minor, secure financial transactions through their mobile devices. Using text message technology, individuals could pay bills or transfer money—no smartphone required.

The proliferation of basic-feature phones throughout Africa and Asia over the last decade also unlocked new ways for Opportunity International to connect vulnerable families to vital services. With generous support from our corporate partners, including the John Deere Foundation and Cisco, we began to transform rural access to more sophisticated and convenient financial systems.

In 2009, we received a grant from the Omidyar Network to develop an "electronic wallet" strategy that would create and implement new electronic and mobile banking technologies. In 2010, Credit Suisse helped expand this strategy, and they continued to grow mobile access with a generous grant in 2012.

Thanks to exceptional partners like these, Opportunity has become a leader in mobile banking, eventually growing the e-wallet strategy into a comprehensive Digital Financial Services program designed to leverage technology to better serve clients. With high-touch, high-tech solutions, Opportunity continues to provide reliable financial tools and services to the individuals most often disenfranchised from formal institutions.

Continuing to Improve: Introducing New Features

Since the early days of mobile banking, Opportunity has been a leader in innovation—adopting and developing new programs to better serve clients. Today, people in developing economies can not only use their phones to complete basic transactions and payments, they can also apply for loans through a mobile form or receive loan disbursements directly on their phones. Through a simple menu-item interface, clients can even check their balances, transfer funds, and sometimes pay bills. Opportunity International also offers Interactive Voice Response (IVR) services to serve clients who cannot read or use text prompts on their phones. These voice recordings allow us to include even more marginalized groups in the financial services we offer.

In addition, we have helped financial institutions build women-focused agent networks who use tablets or phones to help more women connect digitally to their bank accounts. Agents operate in rural communities and are trained and supported by financial institutions to accept cash deposits and withdrawals on behalf of the bank. With a trusted local woman as the agent, female clients are often much more at ease conducting digital transactions.

As technology continues to advance, Opportunity International will continue to grow with it—working to make mobile banking increasingly secure and accessible to the clients that need it most.

When individuals have access to quality and consistent financial services, they can plan for their futures. And by committing to creative, powerful technological solutions to mobile banking, we can make those reliable services—and better futures—available to even more families.

Each week for the next 50 weeks, we will share a piece of Opportunity's history—major or minor, sobering or inspiring. We have gotten to where we are today by facing some of the world's greatest challenges, with you by our side. Please join us in celebrating the many significant moments that have built the foundation on which we will embark on our most audacious vision yet: ending extreme poverty.

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