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Rodger Voorhies, director of financial services for the poor at the Bill & Melinda Gates Foundation in the United States, talked to Larry Reed, director of the Microcredit Summit Campaign, for the 2013 State of the Campaign Report.
Larry Reed: What opportunities do you see for digital transactions making a difference in the lives of the very poor?
Rodger Voorhies: Like most of us, poor people live their lives through a lot of different kinds of financial connections, and payments are really the connective tissue that hold those financial transactions together. Unless we can figure out ways to help poor people transact in a way that is profitable for them and profitable for providers, we’re really not going to see large-scale financial inclusion take place.
Now, one of the most exciting things that’s going on for us is the ability of mobile money to reach down into really poor households, and so right now in a country like Tanzania 47 percent of households have a mobile money user. An exciting bit of that is not so much, okay, there’s one person in the household sending money to friends, but it might open up all kinds of innovations that before were previously unavailable.
So, let’s think about savings, because we know savings have a big impact on poor people. Well, it’s really hard to save, and poor people have to take a lot of self-control and we expect a lot of self-discipline out of them if they’re going to be able to save. If I can actually begin to transact digitally and I had defaulted into commitments accounts and savings accounts for school fees or whatever the mental maps are that work for me, I think we can see large scale inclusion that actually has a big development impact. And we know that the empirical evidence around these pieces work, so we know commitment accounts work, but poor people just don’t have a way to get those commitment accounts.