Making Change Work on a Mobile Phone

IT IS 11 p.m., and Grace sends her last WhatsApp message of the day. She checks the money balance on her phone, texts her father, then drifts off to sleep. The next morning, at 5.30 a.m., she meets the other girls from the village, fetching water from the well a mile away. Then she must get a fire going, sweep the yard, and then prepare porridge for the children before school.

In Africa, some things change, and some things stay the same. One thing that changes only slowly is the expected place of women in rural society. The 2014 report Levelling the Field by ONE - the global organisation founded by the rock star Bono to fight poverty - identified mobile phones and social networks as two of the five things that could unleash the potential of women across the poorest parts of rural Africa.

Relationships remain the primary focus of life in most parts of Africa. In countries where institutions are weak, strong relationships help you survive.

Some organisations, including Five Talents (a charity that trains people to save and borrow money for community enterprises), are able to use this web of relationships to help people. Many of those with whom it works have a web of relationships that is much larger and stronger than some of the best-networked business people I know in London. Unlike many in the West, however, they are less likely to be able to make their money work for a living.

Often earning less than £1.50 a day, they have very small amounts of loose change, hidden in "safe" places - under a mattress, or tucked into a chitenge or bra. These small pockets of "dead money" do not earn interest, and are held to meet emergencies, of which there can be many in a typical week.

"Dead money" is also vulnerable money, and likely to be stolen. The successful pairing of banking and mobile telephony is best viewed in the light of opportunistic crime that robs people of their investment just because they have nowhere else to put it. Mobile banking, using text messages to transfer money, combined with paying in and drawing out at kiosks, works well because of widespread internet access, and the data in mobile-banking technology's use of low band width.

ORGANISATIONS such as Five Talents are distributing tablets preloaded with simple banking software for church and community groups - small circles that are accountable to each other - to bank with each other using cloud technology. The tablets are also used to deliver small-business training and for individuals to share their learning across the web.

What mobile banking offers is simple but powerful. People can be shown how to pool those small pockets of dead money, build up cash in a group of trusted friends, and then get that money working. It means that small-business owners who, in the past, could not afford to expand by buying a chicken or a bicycle can now borrow from the group.

It also means that grandma can become an investor. While her modest savings are earning nothing in a jam jar at home, she could be getting interest on her investment when people who have borrowed from the group pay back their loans with modest interest.

People save, people borrow, and their money works for them. It is a small-scale, unsophisticated banking system that works, and can be sustained as access to the web expands and costs of ever more sophisticated mobile phones continue to fall. A third of sub-Saharan Africans have a mobile subscription, but the growth rate of new subscriptions is faster than anywhere else in the world.

  Growing a trade: Hamida, who uses mobile technology to expand her fruit-and-vegetable business, near Iringa, in Tanzania

Growing a trade: Hamida, who uses mobile technology to expand her fruit-and-vegetable business, near Iringa, in Tanzania

It can take only a few short weeks for someone to operate their own mini bank or credit union. Unlike the banks of the past, these companies can now operate using mobile money and mobile phones, keeping costs down and saving time.

The money comes from the people themselves, sourced from friends in their intimate social network. The financial literacy, business training, and access to specially developed technology come from charities and NGOs. The resulting partnership is effective.

AT ITS Final Reading in the House of Lords, the International Development (Official Development Assistance Target) Act 2015, which comes into force next Monday, was described by Lord Purvis as being "simply about a girl who wants an education . . . a mother who wants to feed, wash, and nurture a child".

It is indeed women who feature most prominently in mobile-money programmes in Africa because they tend to be more financially excluded than men and they are responsible for feeding their family, and so are more motivated.

They also make better clients than men. Care Norway found that women reinvest 90 per cent of their income in their families; men, less than 40 per cent. Other studies report that businesses run by women are less likely to fail.

Simple business videos, many filmed by other women in the network on their tablet computers, describing their successful businesses, give people like Grace the confidence they need to try new ideas. This is not a foreigner telling someone what to do: it is the sharing of hard-won experience.

IN HIS annual address for the Bill and Melinda Gates Foundation, Bill Gates spoke about the progress that would be made around the world over the next 15 years - longer lives, fewer diseases, more productive crops - and, he said, mobile phones would be key drivers in helping the poor to transform their lives.

Over the next five years, Five Talents seeks to link people like Grace to more than 240,000 others across Kenya, Uganda, and Tanzania, who between them will bring benefits to more than 1.2 million people through their businesses, the jobs these create, and the children who now get better food and education.


(This article first appeared in the Church Times and is reproduced here with permission.)