I would like you all to take a moment
and think about what your lives would be
like if the only tool available to you
before things was cash you can start
with your wallets which you probably
have one right now take out your debit
cards your credit cards any gift or
reward cards take out your driver's
license any ID
you only have cash now you can go
through a day in your life and probably
imagine buying your morning coffee
paying for lunch and probably buying
groceries on your way home with cash but
think bigger how do you buy your house
how do you pay for a car how many kids
do you have how do you pay for their
college remember you only have cash so
if we think beyond our wallets then you
probably don't have access to credit or
loans so that probably means you don't
even have access to ATMs so you might as
well leave that cash shoving a mattress
at home this may be hard for most of us
to imagine but this is - the reality for
millions of people around the world now
some who may see access to financial
services as a first-world privilege that
will eventually spread to the rest of
the world as it develops they would
argue that financial services access is
a product of development well I can tell
you from both personal and professional
experience that the opposite is true I
argue that development is a product of
access to financial services there are
millions of people around the world
especially in the developing economies
who are living below their potential
because they are constrained by the
present financial situation if they had
access to credit then they would be able
to propel themselves by being more
economically productive beyond the
constraints of your personal cash flow
when people can save it means they can
prepare themselves for future expenses
like education and healthcare
and when an entire population has access
to these services
it means nations can tap the full
potential of millions of the population
who feel free and secure to pursue their
goals without the worry of unexpected
financial shocks or being unable to meet
future financial needs so let's go back
to the beginning I'm an African who
spent many years living in other parts
of the world so I know the archetypal
stereotypes about the poor state of
governance economies that are
dysfunctional and the accompanying tales
of disease and disorder this may have
been true in the past and there's still
pockets where it's still the case but
I'm here to tell you that the African
narrative is changing for the better and
technologies at the heart of this
transformation over the next decade
Africa's GDP is expected to rise by an
average of 6 percent per year in
parallel with this economic growth an
explosion in mobile technology is
propelling Africa to become the mobile
continent today approximately 2,000
households have at least one mobile
phone and in many African countries it's
over 80 percent by 2020 it's estimated
that there will be at least one billion
mobile phone subscriptions on the
continent roughly equal to the
continents population this is important
Africans can now access financial
services on these tiny low-cost
computers in their pockets so one
billion mobile phones on the continent
potentially means 1 billion financially
connected individuals that's huge I'm
Kenyan and that's lucky because the
quintessential African success story in
the mobile and financial services sector
up in in my country eight years ago the
leading mobile operator kick-started a
mobile money revolution by starting a
money transfer service that you can use
to send each other small amounts of
money and pay merchants using good old
mobile phones all kinds of people use
this service to buy groceries to pay at
restaurants go to the movies you name it
it's venerable
in personal freedom and at the same time
drives economic productivity and growth
other services of since followed
innovations like mobile banking mobile
enabled health insurance and mobile
powered pay-as-you-go solar energy
systems I think we can all agree that
these innovations are pretty impressive
especially when we think about the fact
that here in the States
similar innovations like Google Wallet
have not yet gone mainstream but here's
the catch despite all these mobile money
transfer innovations access to regulated
credit access is still not there for
most people it's easy relatively to send
50 bucks to Grandma in a flash but it's
a lot harder to borrow a large sum of
money to pay for college or buyer buy a
house sure it's easy to enable one
person to another person's money but for
a bank to make an informed decision
about who to lend money to especially if
that person doesn't have a banking
history or a credit worthiness profile
it's a lot harder I'd like you to meet
someone
this is mama Ali mama Ali runs a
roadside stand selling groceries and hot
meals to construction workers in Kampala
the capital of Uganda one of Kenya's
neighboring countries her customers are
construction workers I say so they get
lunch and they pick up groceries for
their families every day but they pay
her at the end of the week when they
receive their own weekly wages but Molly
trust him because she knows them she
knows they have a job she knows where
they work in fact she's placed her stand
the Liberty near the construction site
however mama Ali bhai's Hass talk from a
variety of wholesalers who only accept
immediate cash payments and don't take
credit so every day she has to have
enough cash to restore cast and but if
for example she's a really good day
let's say our stock is running fast at
11:00 a.m. she realizes oops I'm gonna
run out
she doesn't have cash because she spent
at all restocking a stock she's not
being paid yet but she can not take a
loan either because she doesn't even
have a bank account
and even if she had one it would take
forever to process a bank loan the team
I work with in my research organization
in Nairobi Kenya is working on using
technology to drive Financial Inclusion
so that people like Muhammad Ali and
others can access financial services for
example instant loans you may be
thinking how can you possibly tell
without ever meeting Muhammad Ali that
she can pay back a loan well from a
mobile data we can tell that she talks a
lot on the phone
that means she can afford a lot of cell
minutes we can see that she's receiving
a lot of mobile payments from a lot of
different people this means that she has
probably running a business and has a
diverse customer base we can see that
she has a consistent mobile money flow
every day every week she's accepting
payments and she's net positive now
isn't this the ideal customer profile
that a bank should be thinking about
lending money to we are working with one
of East Africa's largest commercial
banks to pioneer system that uses such
mobile data to create creditworthiness
profiles for people like Muhammad Ali so
that without ever asking her to set foot
in a bank branch without requiring any
paperwork asking for a password in
history the classic catch-22 of Western
banking with the cooperation of a mobile
operator and with her permission a
banker can pull such mobile data and
determine that she's the perfect
candidate for a loan so where we had no
credit profiles we managed to use
Mobile's and mobile data to create
creditworthiness profiles mama holly is
not alone there are thousands of user
stories ranging from handyman who could
do twice as much work by buying
expensive battery power tools to single
working moms who spend all their savings
on a child's midnight hospital emergency
instead of using that money to pay for
college so these stories they inspires
at our research lab in Arabi we know
that credit scoring technologies you
know developed for mature markets cannot
keep pace with the innovation and growth
happening in the developing countries
mobile money proves that in less than a
decade we have a robust platform low
cost ultra high speed that reaches even
the most remote villages my team
leverages that innovation and builds on
it so that we can keep pace with ever
improving an environment around us a new
Valachi outpace it modern financial
services do not have to remain a fast
world privilege we have the tools and we
have the creativity to give every person
the access to credit that they deserve
thank you