The concept of providing mobile technology to assist the global poor is proven to be effective. There is currently a project already being developed that demonstrates the importance of providing the less fortunate with better access to financial services. If it works properly, the development project in India, called SHARE (Society for Helping to Awaken Rural Poor through Education), can help the underserved and increase productivity. SHARE helps serve about 400,000 women clientele. SHARE’s main goal is “provide financial services to poor women in the state of Andhra Pradesh for viable productive income-generating enterprises.” (Vereijken 53) By providing the vital education that they have never received, the women are inspired and ready to partake in the world of finance with full competence.
To exhibit the project’s success, “An impact study conducted in 2002 demonstrated that 76% of SHARE’s clients who remained with them for more than two years, experienced significant reductions in poverty, and one-third of them are no longer in the category of the poor.” (Vereijken 53) Aside from educational programs working to solve the issue, other companies are attempting to penetrate the market for financial growth in underdeveloped countries. One particular development experiment has demonstrated the positive effects providing banking services to the poor can have. The service is M-pesa.
M-pesa has been successful at providing banking abilities to Kenya, Tanzania, and Afghanistan. According to the NY Times, “more than 70 percent of adults are using a digital money system known as M-Pesa that started less than a decade ago.” (Popper 2016) Therefore, the widespread growth in Kenya, an underdeveloped country, demonstrates the opportunity and potential success of creating a mobile financial platform for the global poor. M-pesa acts as a closed system that allows people in this country to store balances, send money and make payments on their cell phone. Customers can take cash to an M-pesa agent who will then credit their account. In Kenya, the use of M-Pesa mobile money services made it easier for households to face financial hardships and health shocks. While M Pesa users were able to retain the same level of consumption throughout the shock, “Non-M-Pesa users’ household consumption fell by 7-10% during hardships.
” (Money of the Future 2015) Aside from the benefits to consumption and overall economic development, data also suggests that financial inclusion can have benefits to individual’s health. An example is that in Niger in Africa, “households in zap villages used their cash transfer to purchase a more diverse set of goods, had higher diet diversity, and grew more types of crops, especially marginal cash crops grown by women”. (Aker 1) Additionally, the expansion of banking opportunities in underdeveloped countries has led to benefits to an individual’s health in other ways. If the assumption that people with higher incomes live healthier lives is made, the income growth in Mexico can act as a plausible example. Furthermore, according to financial insights website called Lets Talk Payments, “When banks in Mexico expanded access by opening terminals in retail stores, the average income in those population centers rose by 7% while employment grew by 1.4%.
” (Sofia 2016) By supporting the process of creating an environment of financial revolution in the underdeveloped world, not only would we allow helpless citizens with the opportunity to thrive through individual sustainable existence, but would contributing to development worldwide. While the results of providing the global poor with mobile technology to thrive with financial capabilities might be beneficial, the economic feasibility of the solution brings up questions. Subsidizing and providing the masses with mobile technology may seem highly costly when evaluating the staggering population in these underdeveloped countries. The OECD or Economic Co-operation and Development, an organization which works to enhance the economic and social well-being of people around the world, did a study on the use of subsidies in developing countries.
Among the many conclusions they reached, one included, “Input subsidies need to be contemplated with caution, with a clear consideration of the costs and benefits compared with conventional best practice of addressing market failures directly and using social policies to address social objectives with respect to poverty and food insecurity.” (Wiggins 20) Before implementation of the proposal is planned and designed, a thorough analysis is necessary to determine whether the cost will be worth the benefit of providing the global poor with subsidized mobile technology solutions.