Another FT on Africa.
How mobiles fuel banking in infrastructure-hostile environments in Africa: Better to pay over the phone than carry the cash or waste time going to branches that do not exist. All sorts of everyday transactions are suddenly greased to the point of actual convenience!
That growth in e-banking, in turn, fuels the ambition of local banks to expand services locally and expand the reach of their operations geographically—an incredibly virtuous trend generated primarily by sheer connectivity.
The key dynamic is the spread of banking services to the previously “underbanked.” The extension of short-term credit to individuals makes capitalism work—as in, I will gladly pay you by mobile for a hamburger today.
Credit to ODA (official developmental aid) where it is due:
Vodafone, the British telecoms company, with a local partner and the backing of Britain’s Department for International Development, launched one of the most celebrated mobile banking initiatives: M-Pesa of Kenya.
This is basically telecoms moving into banking.