Gates pledges 500 million dollars to bring banking to poor

Bill Gates, left, smiles with his wife Melinda Gates, during a ceremony honoring the couple with the 2010 J. William Fulbright Prize for International Understanding at the Library of Congress in Washington, on Friday, Oct. 15, 2010. – AP Photo

WASHINGTON: The philanthropic organization set up by Microsoft co-founder Bill Gates and his wife Melinda Tuesday pledged 500 million dollars to help give the world’s poorest access to financial services.

Melinda Gates announced the five-year pledge at the first ever Global Savings Forum in Seattle, which has drawn 200 global leaders in development, banking, technology and government, and a member of the Dutch royal family, Princess Maxima, for talks on the role of savings in the developing world.


Six grants totaling 40 million dollars, which are part of the 500-million-dollar package, were announced Tuesday at the forum hosted by the Gates Foundation.

Several of the projects are aimed at finding ways to help the poor to save, using systems like branchless banking and mobile phones.

Many of the projects that will receive grants have been inspired by projects that are already up and running in developing countries, said Bob Christen, director of financial services for the poor at the Gates Foundation.
He cited the story of a 17-year-old who sells snacks at a street market in Kenya and who is trying to save money to pay for his education.

“His inventory is about two, three dollars a day, and he is saving 100 shillings a day, which is a little over a dollar. He has a goal to save 20,000 shillings,” Christen told AFP.

The young Kenyan uses the east African country’s M-PESA mobile banking system “because how else could someone save a dollar a day?” said Christen.

Mobile banking allows banks to sidestep the transaction costs that make small-balance accounts unprofitable for them.

Clients like the teenage Kenyan snack vendor, meanwhile, overcome the sometimes costly barrier of getting to a bank to deposit their savings.

“If someone like this Kenyan kid is going to save a dollar a day he sure isn’t going to spend a dollar to get to the bank to deposit his savings, and the bank doesn’t want him there because it costs them a dollar just to have him standing there,” said Christen.

Among the grantees receiving a share of the funds announced by the Gates Foundation Tuesday is Vodacom Tanzania’s M-PESA program, which will receive nearly five million dollars to bring mobile money services that are so successful in Kenya to two million people in neighboring Tanzania.

Another grantee, ShoreBank International, will build a mobile money platform for poor Bangladeshis.
The company aims within five years to bring more than 17 million poor people into the formal financial system for the first time. – AFP