One important aspect of mobile money that has still not been sufficiently addressed is its ability to increase consumption smoothing among those at the base of the pyramid who need this the most. Indeed, the poorest need consumption smoothing because they have less savings nad so can be affected by things out of their control — such as a sudden illness or crop failure — more than others. Indeed, groups in the social enterprise space are working on increasing the ability of mobile applications to help those who want this. For example, Grameen Foundation’s AppLab is investigating offering group savings options in an electronic format because many right now do group savings in a non-electronic manner.
However, for any of this to be effective, institutions need to start accepting payments electronically. Bridge International Academies in Africa has started doing this but it also needs to be linked to electronic savings to allow people to store money specifically slotted for school fees. This concept is spreading though. Equity Bank, through M-KESHO, is allowing people with SIM cards to build credit profiles so then they can receive microloans. The space for the linkages between mobile money and its use for spending as well as savings and consumption smoothing is growing, register for SOCAP10 to get into the cutting edge of this emerging market.
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