Another article about mobile finance... just one month after Orascom announced they'd be pushing mobile banking in the MENA region, this interview of Vikram Akula on Wharton's weekly newsletter, talks about the potential of mobiles in bringing microfinance (as illustrated by the Grameen Bank) to the masses.
The mobile phone is a central piece of the delivery of his value to his user base, and cutting the costs of a real-world presence, although I imagine these costs will appear in the mid-term. Quote the article:
Clearly, we think, mobile banking is the future; it doesn't make sense to try and build a retail brick-and-mortar infrastructure in rural India. From a cost perspective, it makes no sense at all. Mobile technology today is robust enough that you can actually very easily do banking[...] Mobile banking could be the future of microfinance.
Backed by Sequoia Capital, the head of SKS Microfinance is - according to Wharton - India's fastest growing and largest microfinancier with 2m borrowers offering an apparently reasonable rate of 24% p.a., and is looking to overtake the Grameen Bank on a for-profit angle, as opposed to Muhammed Yunus whose Grameen Bank is non-profit.
If you ask me, the jury is out on which one of the two approaches bear fruit both in terms of positive impact on the borrower's livelihood, broader local economic development, and sustainable business profits for SKS. Point-source functions are unlikely to provide the data necessary to give us a clear answer, but if a blanket, viral or community approach is used, there will be enough data in a few years for a few case studies that will give us a foretaste of the business model to come.
