Cellphone Banking Helping To Fight Poverty In India 76
An anonymous reader writes "Technology Review is running an in-depth story about the way cellphone banking is transforming the lives of many poor people in India. By enabling users to manage a legitimate bank account and finance micro-loans, cellphones are a major force of social and economic change. It's perhaps not surprising, given that despite widespread poverty, India has the world's fastest-growing cellphone market and the second largest number of cellphone users (after China). The article mentions one Indian start-up, mChek, that is thriving as a result. There's also an excellent video report."
Re:despite widespread poverty (Score:3, Interesting)
Well India has got so many cellphone users because:
1. People may be poor but the cellphone compnies arent :) Here are a few mobile operators:
TATA
Airtel
Reliance
Vodaphone
and the list goes on. Reliance operates the world's biggest CDMA network. These companies have the financial capability to lay there own fiber network accross India and opera PAN india mobile networks.
2. Competition: Well, unlike other countries, there is a lot of competition among these mobile operators. They will install a mobile tower in the most remote location of India if they can acquire a few more customers.
3. Openness : People are used to buying mobile phones and SIM separatelly. Most people will have more than one companies SIM. It's cheap afterall, you can get a new SIM for just around 100 Rs ( 2 dollars ). So open GSM system has helped the mobile network grow a lot.
4. Culture: Japan is mobile crazy, so is India. Don's ask me why, but almost everyone wants a mobile phone. It's not fashion, it's considered a requrement in India.
Re:Super security (Score:3, Interesting)
Iqbal Quadir Long Now talk (Score:3, Interesting)
There was a Long Now Foundation talk covering the early stages of this story by Iqbal Quadir. (He was the guy who had the idea that the Grameen bank could fund cellphone purchase in small rural areas). Here's their written summary of the talk: Iqbal Quadir, "Technology Empowers the Poorest" [longnow.org] (If you poke around on the site you can find the video of it, or listen to the mp3):
Microloans = Too much banking regulation (Score:3, Interesting)
The only places in the world you see the need for microloans are in countries where there is too much bank regulation.
Here is what the Index of Economic Freedom [heritage.org] says about Indian banking:
India's 28 state-owned banks control about 75 percent of loans and deposits, and 29 private banks and 31 foreign banks make up the rest. The government owns nearly all of the approximately 600 rural and cooperative banks and most other financial institutions. Banks must lend to "priority" borrowers. Foreign ownership of banks and insurance companies is restricted.
That's why there is microlending in India, the banking system is almost totally an inefficient government monopoly.