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The roots of mobile banking in Africa


04 September 2012

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Ken Banks, founder of kiwanja.net in his blog post speaks about how mobile technology is helping in bringing African grassroots innovation to limelight.

Talking about the mobile solutions, he wonders if the new technology should be allowed to help people in replacing the traditional economic activities of indigenous African societies, or let them prevail.

In Ghana, it’s popularly known as susu. In Cameroon, tontines or chilembe. And in South Africa, stokfel. Today, you’d most likely call it plain-old microfinance, the nearest term we have for it. Age-old indigenous credit schemes have run perfectly well without much outside intervention for generations. Although, in our excitement to implement new technologies and solutions, we sometimes fail to recognise them. Innovations such as mobile banking – great as they may be – are hailed as revolutionary without much consideration for what may have come before, or who the original innovators may have been.

The image of traditional African societies as predominantly “simple hunter-gatherer” is more myth than truth. The belief that Africa had little by way of economic institutions and processes before the arrival of the Europeans is another. As Niti Bhan pointed out during a fascinating “Life is Hard” presentation at the Better World By Design Conference a couple of years ago, many rural communities today are familiar with concepts such as loans, barter, swap, trade, credit and interest rates, yet the majority remain excluded from the mainstream modern banking system and have never heard of things like ATMs, banks, mortgages or credit cards. It’s not that people don’t understand banking concepts – it’s just that, for them, things go by a different name.

In Kenya, as few as one in 10 people may have a bank account, but that doesn’t stop many of them from using a number of trading instruments or running successful businesses. Technology can certainly help strengthen traditional trading practices, and we know this because when technology is made available, the users are often the first to figure out how to best make it work for them. Mobile technology is today showcasing African grassroots innovation at its finest.

To read the full blog post, click here

 
Source : kiwanja.net

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