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Globe partners with Gates-funded body to study marketing to the poor

abs-cbnNEWS.com | 11/18/2008 2:26 AM

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A Globe Telecom unit has partnered with a microfinance body linked to the Bill and Melinda Gates Foundation to analyze how the rural poor can enhance their earning capacity by coursing their financial transactions through the low-cost mobile phone technology.

G-Xchange Inc (GXI), a wholly-owned mobile commerce arm of Globe, and The Consultative Group to Assist the Poor (CGAP), which has a microfinance technology program co-funded by the foundation of Microsoft founder and philanthropy leader, Bill Gates, have begun a study that will pilot affordable mobile commerce services in Bohol, Surigao and Palawan.

CGAP will provide technical assistance and has allocated $600,000 for the project, which ends in 2010. CGAP and GXI will then publish the results of the study and contribute it to the growing global body of knowledge on how to use wireless technology to facilitate affordable financial transactions in emerging markets.

"Alternatives to traditional banking services are growing quickly around the world. Cell phones and other technologies will change the way we use financial products everywhere. But few understand how the poor will use them, and what ultimately determines how these services flourish. Working with GXI in the Philippines makes it possible for us to figure that out in an unprecedented way," said CGAP microfinance analyst Kabir Kumar.

The poor usually conduct their financial transactions outside the banking system, which tends to charge fees or require balances that are prohibitive to the poor.

The project seems to show that a social service can be married with a commercial interest.

Globe hopes to access 90 percent of the combined 1.9 million population of the three pilot provinces who are earning $2 a day, the traditional global poverty threshhold.

By offering a service--a financial transaction at the price of one text message coursed through Globe's mobile technology--to low income Filipinos including farmers and micro-business owners, Rizza Maniego-Eala, president of GXI, said they hope to reach and enlist at least 80,000 new GCash subscribers in those three areas by 2010.

Faced with stagnant growth levels, mobile phone operators like Globe have been mining ways to expand their subscriber base and encourage customers to use their phones more frequently.
 

as of 11/18/2008 2:26 AM