Mobile money transfer to benefit the poor: Study | The Daily Star
12:00 AM, March 29, 2010 / LAST MODIFIED: 12:00 AM, March 29, 2010

Mobile money transfer to benefit the poor: Study

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The poor will benefit from the mobile money transfer system, which enables clients to send a small amount of money through a short message system (SMS), said a study.
Mobile phone companies will have to set necessary arrangements with local banks or money transfer companies to help deliver the service, a regional ICT policy and regulation think tank suggested in the study released in Dhaka yesterday.
The system will reduce the cost of money transfer by up to 10 percent compared to conventional channels, LIRNEasia found in the study titled 'Teleuse at the Bottom of the Pyramid'.
Headquartered in Sri Lanka and active across the Asia Pacific, LIRNEasia said 43 percent of the Bangladesh's poor own prepaid mobile phones.
Around 96 percent of these users recharge their accounts by electronic reloads, while 41 percent through scratch cards, said Dr Erwin Alampay, a researcher at LIRNEasia who led in conducting the study.
“So the true potential for mobile money in Bangladesh lies among the poor,” Alampay said.
This also indicates their high-trust rating for the system, which can be exploited when the second wave of mobile applications such as mobile money are introduced in Bangladesh, he said at a press briefing at Sonargaon Hotel.
“It'll also help the government's move to prevent money laundering and encourage people to remit through formal channels,” he said.
Mobile money is a form of electronic money, where real money is converted into e-money, and put into mobile devices. This mobile currency can then be transferred from one mobile subscriber to another, making funds transfer among individuals easier, said Alampay.
“In cases where transfers require cross border transactions, the central bank have to bring some changes in regulations,” he added.
He said this potential can largely be attributed to the innovations by telecom operators like Grameenphone.
“While Grameen is better known for introducing banking through microfinancing to the poor, they have also redefined the mobile usage among the poor through the 'phone ladies',” said Alampay.
“Now by merging the banking and mobile technologies they are ready to offer mobile payment schemes which the Bangladesh's poor are certain to benefit from,” he added.
The study was conducted in six countries including Bangladesh, Philippines, India and Pakistan.
Tahani Iqbal, another researcher at LIRNEasia, also spoke at the briefing.

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Grameenphone and Robi:
Type START <space> BR and send SMS it to 2222

Banglalink:
Type START <space> BR and send SMS it to 2225

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