IFC promotes mobile phone banking

The Jakarta Post, Jakarta

The International Finance Corporation (IFC), a private sector arm of the World Bank Group, is promoting mobile phone banking for people who lack access to banks to make financial transactions.

A. Bido Budiman, IFC associate operation officer for advisory services, told The Jakarta Post last Friday the so-called transformational mobile phone banking would make it possible for people without bank accounts to make transfers from phone to phone, to load cell phone airtime credits and to send or receive remittances locally and internationally, all by means of text messages.

"This is different from mobile banking services that are available at major banks where people must first have bank accounts," he said.

He said many people in rural areas did not have accounts in banks with large networks for reasons of demographic and financial difficulties, while many others had accounts only in small banks or Bank Perkreditan Rakyat (People's Credit Bank), which do not have ATMs, he said.

"Based on our initial research, only 40 million people currently have banking accounts as compared to 80 million people who have mobile phone subscriptions out of the country's total population of 230 million people."

He said IFC would conduct a study next month to gauge market acceptance of the phone banking idea.

"IFC will support the partnership between banks and telecommunication operators and/or third parties who will execute this program by providing experts in mobile phone banking and investment," he said, adding IFC could just become a sub-investor.

"What is more important (is that) we need supporting regulation from the government to turn this idea into reality," he said.

The IFC in December held a seminar for representatives from banks, telecommunication operators and the government to hear about mobile phone banking and some of its success stories in the Philippines and South Africa.

He said users of G-Cash, a mobile phone banking service of Globe Telecom in the Philippines, for example, just needed to register their mobile phone numbers and identities and then pay a small sum to open a phone banking account.

He said regulations in that country permitted people to have a wallet limit of US$230 and a daily transaction limit of $930. (ind)