The introduction of new technologies is an everyday occurrence here in the developed world, but how are these innovations being utilised in countries where poverty is rife and survival rather than entertainment is the name of the game?
More than driving from A to B
In West Timor, Indonesia, many poor families live in isolated, rural areas – long distances from organisations offering valuable financial services. To combat this remoteness, Opportunity’s partner TLM recently purchased two mobile ‘banking vans’ to travel to strategic locations in remote areas (such as markets), offering access to savings and loans for people who live out of reach of TLM’s standard microfinance branches.
The vans play educational videos, teaching the importance of savings and addressing local issues. The project will also see a number of Electronic Delivery Channels (similar to EFTPOS machines) placed with loan officers or in strategically selected locations so that locals can deposit and withdraw money easily. So far, the vans have taken deposits from 219 clients like Amos (pictured below).
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Amos' story
In an isolated area of West Timor, Amos supports his wife Yumince and their three children, Gerson, Dorancy and Leni, with a small farm of just 30x30 metres. Totally dependent on the plot of land, Amos’ income fluctuates throughout the year. Sometimes there isn’t enough money to afford the basics, like food, while a well next to his bamboo house only supplies water during the wet season. At other times, Amos has to walk a kilometre to fetch water from a spring.
Poverty is a reality for Amos and his family, but microfinance is helping him break the cycle. He has recently opened a savings account with TLM’s mobile banking van (pictured above), and is putting money away to ensure that he always has enough money to feed his family. So far he’s saved Rp.15,000 (A$1.65) – not a lot in Australia, but for someone who has never had the ability to save before – this savings account symbolises a world of new opportunity and security.
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A different kind of smart phone
Estimates suggest that 41% of the Indian adult population don’t have access to traditional banking services. Microfinance bridges this gap, offering services to people who can’t access traditional banking because they have no collateral, identification or regular income. In India, our partners are providing small loans to more than 1.5 million people, but regulations prevent the country’s microfinance institutions from offering another valuable facility to their clients – savings accounts.
For people in poverty, savings accounts with traditional banks are too far out of reach. Instead, they ‘save’ by hiding money in holes, or transfer cash through unsafe hand-to-hand networks. Eko, a low-cost, mobile phone banking platform, is a new initiative working to bring formal savings accounts and remittance capability to the poor in India. Eko offers mobile savings facilities using a standard (not smart) mobile phone to connect people with an account at a traditional bank that is allowed to offer savings. Clients are able to make small-value deposits, withdrawals and money transfers to family members living in different areas of the country.
The client’s mobile number acts as their account number, and because the software utilises digits rather than words, it doesn’t require the client be able to read or write.
For the physical exchange of money, small grocers found on many of India’s street corners act as agents, with shopkeepers becoming neighbourhood bankers. At the grocers, clients hand over rupees for deposits or receive cash after making a withdrawal. The transaction is initiated using the shopkeeper’s or client’s mobile phone, and a confirmation is received in real time. Family members can also send and receive remittances.
A number of Opportunity’s Indian microfinance partners are looking to introduce Eko’s service to their clients, helping them access the savings accounts they need to keep their hard-earned incomes safe.
Microfinance in multimedia
Microfinance is an effective tool to help people out of poverty, but only if clients know how to make the most of their loans. It’s for this reason that Opportunity’s partners provide our clients with financial literacy training. In the Philippines, three of our partners are utilising technology to do just that – designing a suite of multimedia educational resources that aim to empower poor households to make informed financial decisions and plan for the future.
Currently in its pilot phase, the multimedia project is set to explore using a range of different technology to engage and educate clients – short videos in a ‘game show’ format with animation commercial breaks will be supported by materials such as comic strips, board games or SMS-based financial tips, either via text or voice mail depending on the recipient’s literacy levels. Topics will include financial products, the importance of savings, wise management of credit, financial planning and negotiations. The pilot phase aims to reach over 18,000 low-income individuals; including family members, more than 90,000 people will be impacted.
Software meets slums
In the state of Madhya Pradesh, India, a new initiative aims to improve the computer literacy of microfinance clients in poor slums and villages. Currently being developed by Opportunity’s partner Samhita, the program plans to set up computers in local community halls, offering one-hour guided access to microfinance clients and their children.
Users will be trained on how to use a computer, how to search the internet and how to utilise online educational resources. For many, it will be their first time ever in front of a computer.
Of the program, Samhita’s CEO Praseeda Kunam notes, “We conducted an informal survey on the educational and health needs of communities. Although schools existed in the area, the quality of education was not satisfactory for our clients. The schools even in the city do not provide any computer training. By training the children and clients on working with computers, we hope to provide them with access to educational materials that are available for free online.”
Once the computer centres are established, Samhita plans to also use them to share information on healthcare, financial literacy, arithmetic and English.
For more information about how you can support people living in poverty through Opportunity, call 1800 812 162.