Calling it a “wild adoption of technology” in his keynote, Mr. Gates said 13 million customers are “getting financial services, transferring money, paying in shops,” The Wall Street Journal reports.
He reasoned, “bKash exploited the ubiquity of cellphones to deliver a needed service.”
The Gates Foundation, of which Mr. Gates is co-chairman, has invested an undisclosed amount in a company, bKash, that lets customers in Bangladesh pay bills or transfer money using their cellphones. As in many other low- and middle-income countries, only about 15% of the south Asian nation’s population has access to formal financial services. However, nearly 70% of Bangladeshis have mobile phones.
Traditional banking services don’t often reach the poor because banks consider it uneconomic. It’s not always feasible for a bank to build a bricks-and-mortar outpost in a rural area. Mr. Gates said his foundation, the world’s largest, with a $40 billion endowment, was targeting people who save less than $1,000 annually and for whom the average transaction isn’t more than $5.
Digital transactions, he said in the interview, can be processed at a fraction of the cost of financial services offered in the developed world.
Bill Gates is banking on digital technology to bring financial services to the world’s poor.
“Rich people take for granted loans, insurance, banking” and other financial services that poor people have little access to, Mr. Gates said in an interview Thursday before delivering the keynote address at Sibos, a banking-industry conference in Boston.
Mr. Gates, the world’s richest man and a philanthropist, said that digital technology provides a low-cost way for people in developing countries to send money to each other, buy and sell goods, borrow and save as long as the financial-regulation environment is supportive.
The Bill and Melinda Gates Foundation, which has made financial services for the poor one of its priorities, supports services that enable digital payments and charge fees as low as 1% of the transaction, he added.
The foundation began making financial-services-related grants many years ago and has given tens of millions to similar efforts in Haiti, Tanzania and other countries. It is arguably better known for its efforts to improve education and global health.
With about 2.5 billion people globally who have no access to bank accounts and other financial services, the Microsoft Corp. co-founder said there is a big waiting market as well as the opportunity for technological innovation. Many of the world’s poor keep their savings in cash or physical assets such as gold or farm animals, sometimes at significant risk.
They aren’t always able to transfer money to family members in need, or receive remittances from their kin working abroad. Cash meant for one purpose often gets used up for emergencies, while the lack of borrowing options frequently sends them into debt.
“Money lenders rule your life,” but low-cost digital payment systems provide a compelling and secure alternative, Mr. Gates said. “People will have money problems, but they should have options.”
Other companies have launched similar initiatives in emerging markets, and Mr. Gates said he is broadly supportive of any attempts to provide these services affordably to the poor.