The lack of access to financial services is one of the hindrances to improving the living conditions of the poor. “Mobile money” can help address this problem and could possibly be “a breakthrough” in combating global poverty, says New York Times columnist Nicholas Kristof.
“Most poor people around the world don’t have access to banks. In particular, one of the biggest challenges for the poor is how to save money,” Kristof writes in his column for NYT.
He argues that microsavings, not microloans, is the “most powerful idea” in microfinance. Banks, Kristof argues, usually won’t accept tiny deposits, prompting the poor to “establish their own savings accounts in the form of chickens, goats or jewelry.”
“[M]obile phones offer a low-cost way to make microsavings feasible and extend financial services to the poor,” he notes.