Innovations in Identity

mobile phone reducing poverty

Innovations in Reducing Poverty: How Mobile Phones Can Change the World

mobile phone reducing poverty

There are many approaches on how to reduce global poverty. Some focus on encouraging greater entrepreneurship and self-sufficiency through financial inclusion initiatives such as microfinance and mobile money. Others attempt to provide more opportunities for the poor by building structured educational systems. And still others try to tackle a lack of basic infrastructure through construction projects to improve living conditions. These are, of course, only a few of the many ways that organizations and governments try to address poverty.

One unorthodox take on poverty reduction comes from the likes of Internet industry giants Google and Facebook. Google’s Project Loon is an ambitious project that is launching giant specially-engineered high-altitude balloons to provide Internet service by tapping into existing LTE mobile phone networks. Facebook’s Internet.org initiative aims to connect the two thirds of the world that doesn’t have access to the Internet by using solar-powered flying drones that transmit and receive data. By connecting those who still aren’t able, both companies hope to create new opportunities for people in developing countries to participate in the growing knowledge-based economy, which will then address the issue of poverty.

In order to make access to the Internet affordable in developing countries, it’s not enough to provide a free signal. The vast majority of people in emerging markets do not have access to a computer, thus the primary means of getting these people online is the smartphone. It’s small, portable, and basic models are far more affordable than computers.

mobile phone reducing povertyThe Wall Street Journal recently published an article that focused primarily on Indonesia, a country with the world’s third largest population of non-Internet connected people. Given that 100 million people here earn less than $2 per day, there is huge potential for building brighter futures for Indonesians through higher levels of Internet adoption.

Ruma, a startup company based in the Indonesian capital of Jakarta, has as its primary mission to help people out of poverty through the use of mobile phones. The social enterprise company empowers poor Indonesians by teaching them how to run a business selling airtime credit using a basic feature phone. Once they have gained the necessary skills, Ruma then loans them money to upgrade to a smartphone and shows them how to use it. Once people have mastered the basics, they learn how they can use Ruma’s mobile app to sell airtime and also accept payments for third parties such as utilities and motorbike lenders.

The fruit of Ruma’s labors has been impressive. In the case of one particular Indonesian woman in a small agrarian town, she was able to increase her daily income from just $2 to $10 a day, a five-fold increase. This was all thanks to the skills that she had learned from Ruma as well as the loan that they facilitated that allowed her to buy her own smartphone to manage and grow her own business.

When asked how her phone has changed her life, she responded, “I’ve become more worldly. Now the information comes to me.”

Another example of social enterprises making effective use of mobile phones is Bodhi Health Education in India. Bodhi delivers a low-cost, efficient training system for rural health workers on tablets, smartphones, and computers. Although Bodhi’s software runs on multiple hardware devices, smartphones are definitely the most popular choice.

mobile phone reducing poverty“Android phones with a large screen are the flavor of the day,” said co-founder Abhinav Girdhar.

As Internet access and use continue to rise in developing countries, will there be any fallout from all of this growth?

With more people in emerging markets continually gaining access to the Internet for the first time, verifying their identities will become a greater challenge for eCommerce and mobile commerce businesses. In these countries, many do not have any form of government-issued identity documents, and without any formal financial or credit history, traditional methods of identity verification fall short.

All of these new Internet users will undoubtedly create online accounts for social media networks and other websites. Although they may lack formal identity records, these new accounts have created digital footprints, known as cyber ID data, by which they can be reliably verified.

The global Internet community as we know it keeps getting bigger each day, and as it grows, building and maintaining trust will become ever more important. Trust is the foundation of a strong relationship, and this is especially true when it comes to buying or selling goods and services.

How do you see mobile phones changing the world for good?

The information in this blog is intended for public discussion and educational purposes only. It does not constitute legal advice.

1 Comment
  • Graeiosi Ascanio

    Financial inclusion providing people with an electronic device could be a mere illusion for the customer, a disillusion for for the financial provider and financial implosion for both MFI and communities, unless we accompany it with the economic inclusion, namely a real improvement in his income. We have discussed the subject in our Papper “MICROFINANCE & POVERTY, Give people a job not a loan”https://independent.academia.edu/AscanioGraziosi/Papers
    Dr. Ascanio Graziosi
    Owner, 2015 MICROFINANCE PRACTICE

    August 19, 2015 at 12:00 am Reply
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