Friday, June 19, 2009

Micro-financing via Cellular Phones

Entrepreneurs in developing countries have had difficulty bridging the technological divide between their countries and the technologically advanced western world. Innovative attempts to catalyse development in poor countries through the use of computers; in initiatives such as Kiva and C4 world have failed. These initiatives are aimed at bridging the gap between Western and African entrepreneurs by offering mentorship and micro-financing via websites.

There are more budding entrepreneurs with cell phones compared to those with computers. Mobile Movement has introduced a mobile phone solution that will enable entrepreneurs in developing countries to gain access to micro finance and mentoring from western donors by using their cellular phones.

The process works as follows: potential financiers and mentors view the profiles of entrepreneurs and business ideas from developing countries through a central secure website. The financiers can place a comment and the system then sends that message directly to the entrepreneur’s cell phone. When the entrepreneur replies, the system notifies the interested financier. The final steps are done entirely via cell phone, the financier can transfer money to fund the entrepreneur via paypal and continue mentoring them via sms. The system is a solid attempt in establishing a stronger relationship between businessmen in the western and developing countries. Lets all hope the criminal element, which is a virus for development, does not spoil the party.