Bill & Melinda Gates Foundation Seeks Mobile Money and Financial Education Solutions
by FinancialCorps, 03 February 2015
Just days after the closing of the broad call for applications for the Bill & Melinda Gates Foundation’s Grand Challenges Explorations initiative, which seeks innovative solutions that address the world’s most pressing problems, the focus is turning to measures that could help enable universal acceptance of mobile money payments and financial education as critical means of improving the lives of unbanked and under-banked populations.
The Foundation’s high profile call for mobile phone-based solutions for payments by smaller merchants, service providers and others serving the poor is widely believed to be sparking greater awareness and interest in ways to assist the estimated 2.5 billion adults globally who are “unbanked,” as well as the millions of individuals and families how possess detrimentally low levels of financial literacy. In fact, a study by McKinsey & Co. estimates that effective new strategies could drive a 90% reduction in transaction and other financial services costs for the poor.
This move by the Gates Foundation to find solutions for the unbanked, under-banked and financially illiterate is part of its larger global financial education and inclusion strategy for which the Foundation has teamed up with the World Bank and a consortium of governments, private sector providers and development agencies to formulate and promulgate a strategy on global financial education and inclusion.
Interest in financial inclusion and financial education has skyrocketed not only because of the need to assist the unbanked and financially uneducated populations, but also given the economics involved with identifying successful solutions. Specifically, many economists estimate that nearly $10 trillion in “dead capital” assets are owned by poor individuals who cannot leverage or use such capital given the lack of access and affordability of relevant products and services.
Governments also are taking notice, with representatives from over fifty developing countries meeting periodically in brainstorming sessions to focus on how to drive greater awareness and improved solutions that utilize financial inclusion innovations to increase financial literacy and provide broader financial inclusion. Industry observers anticipate that this trend will continue with force in the months ahead.