Malnutrition and famine plague many parts of the world. Africa has been in the media spotlight for years due to it's continuing problems with hunger. Disease, civil wars, corruption, and poverty have decimated several African nations. However, we never hear about the success stories across Africa. In 2007, the National Bureau of Economic Research launched the African Successes Project. The Bill and Melinda Gates Foundation funded the $4 -million dollar project with the goal of identifying success stories in Africa. Economist David Weil is leading the project and is examining the impacts of a large scale anti-malaria campaign in Zambia which became a model in sub-Saharan Africa. The initiative, which involved mass distribution of insecticide-treated mosquito nets, preventative treatment for pregnant women, indoor residual spraying, rapid diagnostic testing, and artemisinin-based combination therapy, contributed to decreasing the death rate from malaria in Zambia by 60 percent since 2003.
Weil's second project under African Successes looks at the impact of an enormously popular cellphone-based money transfer system in Kenya, called M-Pesa ("M" stands for mobile and "Pesa" means money in Swahili). Launched in 2007 by Kenya's major cell phone company, M-Pesa allows individuals to deposit, send, and withdraw funds using mobile phones. Here's how it works: A young man working in Nairobi wants to send 1,000 shillings to his mother in their far-away village. Prior to M-Pesa, he would take a 15-hour bus ride to give his mom the money in person. Now, he can pay 1,000 shillings at an M-Pesa outlet, where the clerk will send him a text message informing him that the money has been deposited in his account. The young man can then text his mother, telling her that the money is available, so she can visit her local M-Pesa outlet and receive the cash. There are approximately 18,000 M-Pesa outlets in Kenya — compared to only 1,000 bank branches. Fast, cheap, and safe, M-Pesa has already revolutionized the country's financial system. Can this system be implemented elsewhere? Light it up!
If they only make a few hundred dollars a year how do they afford cell phones?
ReplyDeletePoor people are financially challenged and have less access to life’s basic necessities. If they can barely pay for food, shelter, and medicine, then how can poor people afford anything else, especially something like a cell phone? In some countries, there are some government run programs that can help them get free cell phones.
ReplyDeleteNow you may be wondering why the government would sponsor a free cell phone for people. It is basically the primary mode of communication for many people in Africa, South America, and other continents. Since cell phone plans are expensive, poor people aren’t able to have access to them. This puts them in a more vulnerable position. And this is why some governments sponsor the free cell phones for poor people program.
Bangladesh is often used as the case study for the impact that mobile telephones can have on the economically disadvantaged. In the late 1990s Grameen Bank, a Dhaka-based for-profit enterprise long known in Bangladesh for making microloans to fund microenterprises by villagers, set up Grameen Telecommunications, a non-profit organization that provided low-cost phone services in rural areas. Using money borrowed from Grameen Bank, village entrepreneurs purchased mobile phones which they then used to sell phone services to customers -- other villagers -- by the call. The result: mobile phone entrepreneurs -- 95 percent of whom were female -- made a tidy profit while villagers reaped the benefits of instant communication. These benefits included communicating with distant family members, making it easier to find employment opportunities, having more options during emergency situations, enabling farmers to check prices in different markets before selling produce, and eventually allowing the quick and easy transfer of funds. The mobile phone microenterprise platform spread rapidly through the country and stimulated other economic activities among the rural poor, who have proven to be much more technology-savvy than many originally anticipated.