SEATTLE — There are some 4.5 billion cell phones in use in developing countries — a number that tripled between 2005 and 2010, as reported by the International Telecommunications Union. The cell phones are put to good use; in Kenya alone, $1 billion worth of transactions are carried out per month using banking applications on cell phones. A 10 percent increase in cell phone use can boost economic growth as much as 1.2 percent. Interestingly, in areas where cell phones are not available for women, market growth may decrease significantly.
Of course, cell phones have other uses outside of economic development. USAID supports a program that enables people in Kenya, Gaza and the Democratic Republic of Congo to report ethnic violence via text, in order to map trouble areas others should avoid. Haitians and Tunisians can receive information about polling locations via text, and the Afghan government cuts corruption by paying employees electronically, through their cell phones.
Poverty is largely a problem of isolation, and cell phones are built to connect people — whether to request medical assistance or to open a bank account. And, indeed, of the women who own cell phones, 93 percent said they felt safer, and 85 percent said they felt more independent.
According to Michael Joseph, former CEO of the Kenyan cell phone provider Safaricom, cell phone use has spread because cell phone towers are relatively cheap for companies to set up, and cell phone prices have dropped precipitously. Safaricom originally provided coverage for 17,000 people in 2000, but in 2010, Safaricom had 18 million customers.
However, despite the proliferation of cell phone use, men in developing countries are 21 percent more likely than women to own a cell phone.
Even on a strictly economic level, when cell phones – and the independence and economic agency that come with them – are available to women, one likely result is community development.
In Bangladesh, for example, only one in five people use a traditional bank account, but banks that operate via cell phone are becoming more popular. Thus, only 13 percent of Bangladeshi women have used a cell phone application for banking, while 33 percent of Bangladeshi men have. In the absence of a physical or mobile bank, saving money comes with the risk that someone else will take it, so it is difficult to plan for the future.
When cell phones for women are not available, it effectively constrains 50 percent of the market – a huge portion of the population that could otherwise contribute to community development. Furthermore, women more often invest in their families, and may spend as much as 10 times more than men on healthcare, food and education for their children. When the family’s budget is controlled by the mother, a child is 20 percent more likely to survive.
Melinda Gates reports that “One thing we need is more information about why women are less likely to own mobile phones or use mobile money services,” in order to figure out how to improve cell phone availability and mobile bank usage among female economic actors.
Furthermore, Gates says, “Governments, nonprofit organizations and the private sector are working together to dismantle the barriers we already know exist — like committing to digital payroll and social service payments and exploring creative financing options to help make cellphones more affordable for women.”
Additionally, Telesom ZAAD, a cell phone banking application based in Somalia, has found that hiring women to help female customers register for the program increased the number of cell phones for women from 17 percent of their total customer base to 24 percent in one year.
With continued dedication to providing economic opportunities like that of online banking–particularly to women– whole communities will flourish.
– Madeline Reding