You wouldn’t think that poverty stricken lands in the huge continent of Africa are actually rich with communications technologies, and in particular mobile phones. Below, Michael Brown at Credit Angel sheds a light on what this looks like, and how in fact, the proliferation of mobile technology is helping eradicate poverty in some areas.

The mobile market has thrived for some two decades now, and all signs point to further expansion. The industry will continue to grow globally, as consumers seek further convenience in their day-to-day lives.

It’s also a lucrative market financially, for banks, monetary institutions and innovators. Alongside mobile growth, financial technology (FinTech) is thriving alongside it as a natural consequence of increasing users and use. And payment systems that prove both convenient to the consumer and profitable for the providers will only expand until the next big innovation comes along.

However, alongside the global appeal of profit and convenience, the mobile market is thriving as an enabling tool in parts of the world where profit does not come first.

Background

It may surprise people to learn that mobile phones are thriving in parts of rural Africa. In villages distant from major towns and cities, where most people do not have bank accounts or secure ways of storing their money, it’s here where perhaps the biggest benefit of mobile use can be found. In fact, whilst the West has been dipping its toe into the combination of mobile and FinTech, rural African communities have been miles ahead in their acceptance of the new technology.

The lack of a bank account is clearly a security concern for all individuals. Any income made by those in rural settings once had to be carried or guarded by the individual. Cash, as we know, is perhaps the least secure of currency forms worldwide. It’s easy to steal, and virtually impossible to claim back once lost. Such a rural economy makes life incredibly difficult for everyone. Not only is there little money to go around in the first place, but any amount lost or stolen can quickly mean extreme poverty for individuals.

The Contactless Revolution

Whilst the West has been debating the safety of contactless cards in recent times, the United Bank of Africa (UBA) had already mobilised the facility across much of Nigeria. Most of us have reaped the benefits of contactless payments when we’ve found ourselves short of cash and far from a bank. But the UBA extended the benefits to include the likes of public transport and even taxis, and all this whilst Western buses remained cash-only, and Uber was nothing more than a German word meaning ‘above’. The gradual shift from contactless cards to mobile payments is simple common sense – why carry two devices when one will do?

The African economy as a whole is reaping the benefits of making its citizens mobile. In a society without landline telecommunications, it’s estimated that the continent gains a 0.5% rise in gross domestic profit, every time it enables a further 10% of its population to access mobile technology.

Beyond FinTech

The mobile market is thriving in rural Africa, and not just for directly-financial reasons. As farmers the world over know, the weather plays a huge part in their success. Instead of having to play a guessing game and potentially losing one’s whole crop and income, rural African farmers are using their mobiles for weather reports via the internet.

With such information at their fingertips, farmers know the best times to plant crops, sow seeds and harvest. The situation of families having no products to sell and thus no food for themselves has been greatly reduced as a result. Judge this against a rural economy in which around half the people are small-scale farmers and the difference mobile phones have made in fighting poverty is clear to see.

The introduction of mobile devices to the region have also helped with healthcare. Many people are too distant from hospitals and surgeries in emergency situations, meaning a high mortality rate, particularly amongst the young. Infections and diseases that are easily-treatable often claim lives in rural Africa, and it’s often for reasons of accessibility and remoteness. Many can now contact healthcare professionals for diagnoses and advice thanks to their handheld companions.

It’s a similar situation regarding education. There are now apps set up allowing teacher-pupil communication online, as well as online course, not dissimilar to the Open University. The economic opportunities for those living in rural economies have been increased tenfold, and the figures say it all. Mobile payment app M-Pesa is one company that has invested in rural Africa, and its innovations have brought nearly 200,000 Kenyans alone out of poverty over the last decade.

The Future

The relationship between FinTech and mobile tech is inexplicably linked, and the two are set to continue to grow together. Given that the number of mobile users will increase as time ticks on, this naturally means an increase in app-users and all other mobile mod-cons.

It’s estimated that 90% of smartphone users will have made a mobile payment by 2020. The world as a whole is moving away from cash-based transactions towards more convenient, secure and profitable ways of paying.

FinTech in Africa shows how a cashless society can work, as well as the untold benefits and freedoms such a set-up can provide for the individual. As it stands, the introduction of mobile phones to rural Africa ranks highly amongst factors credited with reducing poverty in the region, and it may well prove to be the number one factor in years to come. Discover more about mobile innovations and the future of spending.