The explosion of information technology especially mobile telephony has enabled an enormous potential for wealth creation for individuals and communities. ICT has become a catalyst for innovation and wealth creation for the youth, and most especially for the rural areas where opportunities abounding in the urban communities are lacking. Mobile telephony technology has become a powerful catalyst in fighting poverty and aiding rural poor communities to shift from subsistence living to improved educational delivery, modern agricultural practices, and health and market awareness.
Poverty and Financial Exclusion
Poverty in Ghana as in many other developing countries is a largely rural phenomenon. Most rural communities lack access to traditional banking services. They also lack reliable access to food, health facilities, good quality and affordable education among other basic social amenities. These are the key drivers for productivity and income generation. Access to information technology especially mobile technology could improve agricultural practices, health delivery, and education. It can improve productivity in small-scale businesses and services.
Banks and other financial institutions can use mobile telephony technology to reach out to these socially and financially excluded communities by mobile telephony applications to offer them tailored financial services. Financial exclusion refers to the processes and policies that serve to prevent certain groups or individuals from accessing the formal financial systems. It is the inability of a section of society to access financial services in an appropriate manner helpful to their station. Financial exclusion is not limited to the poor in rural communities but also the poor in the slums or urban centers in many developing countries. These excluded people are compelled to rely on moneylenders to finance their economic and other income generation activities.
Mobile Telephony in Ghana
Ghana has experienced a phenomenal expansion in the last few years. According to the latest statistics released by the National Communications Authority, the total number of subscribers as at February 2015 stood at 31 million, about 6 million handsets more than the population of Ghana.
This present a huge opportunity for banks to take advantage of and roll out products to tap into the great potential of mobile telephony banking. Almost every household has access to mobile phones with about 80% internet enabled that could be tapped into to bring in every one into the banking stream. There is some growth in e-banking facilities such as ATM cards, and internet banking in Ghana but these are largely limited to the large traditional banks such as Barclays, Standard Chartered Bank, Ecobank among others. Other online internet banking service include balance enquiries, statement generation, check status, bills payments, inwards remittances and fund transfers. Rural and Community Banks, which have over 650 branches mostly in the rural areas, do not have such facilities. However, the Rural Banks in Ghana lack the necessary capacity to take advantage of the technology to bring financial inclusion to the rural poor.
Mobile Phone Banking and Financial Inclusion
Mobile phone banking refers to access to banking services and products offered by financial institutions such as account based savings, payment transactions and other services such as utility bill payments by the use of mobile telephony. There are two major characteristics of mobile banking: additive and transformational. In additive mobile banking, the mobile phone only provides an interface to an existing account. The mobile phone becomes an addition to the various channels existing clients of a bank use to access their accounts. Transformational mobile phone banking involves developing a financial product linked to the use of the phone targeted at persons who do not hold formal bank accounts with the conventional banking institution.
In Ghana, the banks are not involved in the transformational mobile banking business. The service is being provided by the mobile phone service providers. Airtel, Tigo and MTN are the three operators that are providing the mobile money services through registered service providers dotted around the country. According to the Bank of Ghana the mobile money transfer business has grown from GH¢ 2.4 Billion in 2013 to about GH¢ 11.6 Billion in 2014.Even though the growth of the mobile telephony banking business has seen astronomical growth there are still areas that can be explored to rope in all into the banking system. The Bank of Ghana must look for ways that would enable transactions across networks. The system must also enable the conversion of call credits into money for business transactions. Presently a client has to visit an authorized dealer to load their wallet, effect transfers, or receive payment. Mobile phone users should be able to convert their call credit into money for transactional purposes.
E-Learning and Poverty Reduction
E-learning is the application of technology to facilitate the learning and disseminate knowledge. The availability ICT in remote rural communities helps learners to undertake the learning activities every time, everywhere as long as they have access to mobile telephony. Mobile telephony technology makes learning very simple and convenient to the rural people and helps bridge the division between knowledge acquisition and application in the urban areas and those of the rural areas. In India cloud schools, that is schools without teachers, are offering new access to education for poor in rural communities. Rwanda is determined to put all its schools in an ICT enabled environments where educational information and other resources are accessed via the internet and other SMS services. The problem of mass deployment of e-learning facilities is the limited deployment of data connectivity in most rural areas by mobile telecom operations due to the high cost of coverage. The government can ease this by helping to deploy broadband facilities in the rural areas to enable a lot more people to connect to it.
Mobile Telephony and Agriculture Development
Knowledge and information are the catalyst for improvement in agricultural productivity and increased incomes for the poor. Mobile telephony can contribute to the dissemination of information on weather, technology application, veterinary advices and agricultural extension services to the rural farmers. Simple SMS alerts could be sent to farmers on weather conditions and rainfall patterns to enable them plan their planting season. Kenya instituted an SMS service known as the iCow services through which veterinary services are brought to the farm gates of the farmers. Mobile phones are used to educate farmers resulting in increased milk production by about 40% since its inception (Brookings Institute, How Mobile Technology is Driving Global Entrepreneurship, 2012). The Kenyan agricultural ministry in collaboration with other stakeholders such as the FAO has been able to educate farmers on the use of simple text messages to seek information on their agricultural practices. Periodic SMS messages are also broadcast to farmers on market conditions and farm produce prices thus enabling them decide when to store farm produce or take them to the market.
Socio-Political Awareness and Integration
The application of mobile telephony technology can aid in creating socio-political awareness among rural people. This helps in breaking down taboos and doing away with practices inimical to development. The deployment of mobile telephony technology is a catalyst to opening up the rural areas for investment and thereby attracting people from other culturally diverse areas.
Political awareness is enhanced as people are able to read news and follow issues on their mobile telephones in the absence of internet-enabled computer. Many news media outlets have short-codes that one can subscribe to enable them follow the happenings in the country.
Governments and their development partners, aid agencies should provide the internet backbone to aid service providers to provide data services to rural communities to help provide opportunities to them as part of a broad strategy of alleviating poverty in poor rural communities and promoting sustainable development. The Government of Ghana e-governance portal must be developed into a mobile friendly one-stop center for accessing public services. Services such as births and death registry, land title administration, and general information about the local government should be readily accessible through ICT mobile technology to help open up public or local government administration. Local government field staff can then serve their communities via mobile applications developed specifically for the purpose.
For ICT and particularly mobile technology to become the catalyst for eradicating rural poverty government must recognize ICT implementation as key factor in providing smarter strategies in promoting equitable and sustainable development in the rural poor communities in Ghana.
Author: Francis Enimil Ashun (B.Com MA) has over 16 years’ bankin experience in Credit Administration and Branch Operations. He is a researcher in current trends in Human Resources Management and Development.
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