For those in developing nations, a mobile phone is more than a communications luxury. These tiny handsets act as hubs for mobile banking, entrepreneurship, fact-checking, and public health announcements - and they may be the key to women's economic equality.

Currently, the market for cell phones is exploding as the technology proves to be both accessible and useful:

Entrepreneurs and development organizations are eagerly seizing the opportunity presented by such growth. They are creating mobile phone applications for profitable and nonprofit ventures across the continent. Millions of Africans, for example, now use their mobile phones to transfer money, turn on water wells, learn soccer game scores and buy and sell goods.

The penetration of the mobile phone is far greater than that of the Internet in Africa, especially in rural areas, making it the most accessible communication tool, said Jon Gossier, founder and president of Appfrica, a technology company with headquarters in Uganda.

The recent completion of the first of several planned undersea cables connecting East Africa to broadband Internet has raised hopes that high-speed Web access will increase here. But Mr. Gossier said he expected mobile-phone messaging applications would be needed for several more years. The development of useful, local Web content will lag after falling Internet prices, which will quite likely take longer than a year, he said.

"I don't think the development being done now for mobile phones is going to stop," Mr. Gossier said, "but I think we'll see a whole new generation of applications coming out of Africa, including mobile applications that utilize the Web."

The innovations in technology have been able to provide women with various ways to make a living. Last week's Economist held a special report on mobile phones. In the section on Mobile marvels, they report:

BOUNCING a great-grandchild on her knee in her house in Bukaweka, a village in eastern Uganda, Mary Wokhwale gestures at her surroundings. "My mobile phone has been my livelihood," she says. In 2003 Ms Wokhwale was one of the first 15 women in Uganda to become "village phone" operators. Thanks to a microfinance loan, she was able to buy a basic handset and a roof-mounted antenna to ensure a reliable signal. She went into business selling phone calls to other villagers, making a small profit on each call. This enabled her to pay back her loan and buy a second phone. The income from selling phone calls subsequently enabled her to set up a business selling beer, open a music and video shop and help members of her family pay their children's school fees. Business has dropped off somewhat in the past couple of years as mobile phones have fallen in price and many people in her village can afford their own. But Ms Wokhwale's life has been transformed.

In 2008, the New York Times Magazine had a large feature, asking "Can the Cellphone Help End Global Poverty?" The story followed "human behavior researcher" Jan Chipchase in his Nokia-sponsored quests to understand how people use their cellphones in a variety of environments. The article makes some interesting points about how a cell phone is the most effective tool to effectively stimulate both official and unofficial economies:

Jan Chipchase and his user-research colleagues at Nokia can rattle off example upon example of the cellphone's ability to increase people's productivity and well-being, mostly because of the simple fact that they can be reached. There's the live-in housekeeper in China who was more or less an indentured servant until she got a cellphone so that new customers could call and book her services. Or the porter who spent his days hanging around outside of department stores and construction sites hoping to be hired to carry other people's loads but now, with a cellphone, can go only where the jobs are. Having a call-back number, Chipchase likes to say, is having a fixed identity point, which, inside of populations that are constantly on the move - displaced by war, floods, drought or faltering economies - can be immensely valuable both as a means of keeping in touch with home communities and as a business tool. Over several years, his research team has spoken to rickshaw drivers, prostitutes, shopkeepers, day laborers and farmers, and all of them say more or less the same thing: their income gets a big boost when they have access to a cellphone. [...]

Some of the mobile phone's biggest boosters are those who believe that pumping international aid money into poor countries is less effective than encouraging economic growth through commerce, also called "inclusive capitalism." A cellphone in the hands of an Indian fisherman who uses it to grow his business - which presumably gives him more resources to feed, clothe, educate and safeguard his family - represents a textbook case of bottom-up economic development, a way of empowering individuals by encouraging entrepreneurship as opposed to more traditional top-down approaches in which aid money must filter through a bureaucratic chain before reaching its beneficiaries, who by virtue of the process are rendered passive recipients.

For this reason, the cellphone has become a darling of the microfinance movement. After Muhammad Yunus, the Nobel-winning founder of Grameen Bank, began making microloans to women in poor countries so that they could buy revenue-producing assets like cows and goats, he was approached by a Bangladeshi expat living in the U.S. named Iqbal Quadir. Quadir posed a simple question to Yunus - If a woman can invest in a cow, why can't she invest in a phone? - that led to the 1996 creation of Grameen Phone Ltd. and has since started the careers of more than 250,000 "phone ladies" in Bangladesh, which is considered one of the world's poorest countries. Women use microcredit to buy specially designed cellphone kits costing about $150, each equipped with a long-lasting battery. They then set up shop as their village phone operator, charging a small commission for people to make and receive calls.

In addition to the entrepreneurial aspects of mobile technology, the phones can be used to provide financial stability through more concrete ways like saving. In areas where the currency is destabilized or banks are unreliable, mobile money allows for people to store their savings somewhere they trust - in their devices:

M-PESA (a mobile money system) is also used as a form of savings account, even though it does not pay interest. Having even a small cushion of savings to fall back on allows people to deal with the unexpected, such as suddenly having to pay for medical treatment. "An awful lot of people climb out of poverty every year, but a lot drop back in because they have no savings, no buffer, so when something bad happens they have to sell assets and lose a lot of ground," says Mr Christen. Poor people tend to save by buying livestock, which can get sick or die, or buying gold, which can be stolen, or investing in community-based schemes that may be fraudulent, says Timothy Lyman of the Consultative Group to Assist the Poor (CGAP). Mobile banking offers a more reliable alternative, he says, and could have economic benefits comparable to those of mobile phones.

I am both excited and cautious about embracing innovations in mobile technology as the solution to poverty. Many of the causes are structural in nature and cannot be solved simply by providing people with electronics. But I must admit that the possibilities opened by mobile companies and researchers are truly exciting, and have made impoverished areas the forerunners in new, people oriented solutions. And that's worth celebrating.


In Rural Africa, A Fertile Market For Mobile Phones [NY Times]
Can The Cellphone Help End Global Poverty? [NY Times]
Mobile Marvels [The Economist]
Beyond Voice [The Economist]