Mobile Phones and the Rise of the Microentrepreneurs

A simple and widely available tool -- the mobile phone -- is creating substantial impact in the developing world, changing the lives of low-income individuals, especially in rural communities.
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The simple idea that people can improve their livelihoods when provided with the right tools and opportunities has been transformative in developed and emerging markets alike. A simple and widely available tool -- the mobile phone -- is creating substantial impact in the developing world, changing the lives of low-income individuals, especially in rural communities. Cellphone use has experienced its greatest growth in emerging markets, where much of the community has bypassed traditional land-line telephones. Today, six billion mobile phones are being used throughout the world, with approximately 75 percent of users living in developing countries. Mobile technology provides unparalleled opportunities to break the cycle of poverty by providing access to markets, information, financial services and viable business opportunities that were previously unavailable.

Not only is the pervasiveness of cell phones striking in the developing world, but so too is the way they are being used. Consider Indonesia, where 80 percent of the population uses a cell phone and 96 percent of those users text regularly -- even though nearly 75 percent of citizens live on less than $2.50 per day. Many people in rural Indonesia are embracing mobile technology as a strategic business tool. Farmers are now able to access information about weather conditions and market pricing for their cash crops, the unemployed can search for job opportunities electronically, and the unbanked can engage in secure financial transactions. In this way, mobile phones are empowering users to gain control of often volatile financial conditions, particularly in informal markets.

Recognizing the opportunity offered by this technology, Grameen Foundation and eBay Foundation began working together this summer to build solutions that address market challenges facing microentrepreneurs in Indonesia. Our joint effort will support Grameen Foundation's Mobile Microfranchise initiative, which currently works with a network of more than 10,000 women microentrepreneurs, heavily concentrated in the West Java region. A 2010 study found that 47 percent of participants in the Mobile Microfranchise program doubled their income by their fourth month of participation.

The success of this initial endeavor led Grameen Foundation to explore ways to drive even greater impact. In the same way that mobile has been critical to the development of Grameen Foundation's initiatives in Indonesia, it has been a core area of focus for eBay as well. In 2011 alone, eBay transacted $5 billion through mobile devices and 60 percent of mobile purchases came from outside the U.S. We quickly realized this remarkable shared strategy and alignment of need and expertise between our two organizations. Our subsequent conversations led to a $750,000 grant from eBay Foundation and a concept to develop the Mobile Transaction Platform and the Mobile Marketplace, as well as a commitment to engage eBay staff throughout the life of the project.

Through these two new applications, we aim to extend the existing efforts of Grameen Foundation's technology platform to give Indonesia's rural poor a wider range of services and opportunities to improve their lives. We expect our work will contribute to the growth of the Indonesia-based network from 10,500 to 60,000 entrepreneurs over the next three years. And the microfranchisees -- a majority of whom are women who sell airtime minutes in their communities -- will soon be able to provide an estimated 4.5 million customers with access to a mobile marketplace and transaction platform.

Through our efforts, microentrepreneurs will gain access to the tools and opportunities needed to support their enterprises and gain greater financial independence. By combining our unique areas of expertise -- eBay's mobile capabilities with Grameen Foundation's poverty alleviation strategies -- we are able to achieve much more than either of our organizations could individually. Not only are we able to expand Grameen Foundation's impact as the organization works to build technology solutions that empower the poor and end the cycle of poverty, but we are also able to provide a powerful new blueprint for engaging with pro-poor organizations moving forward. In fact, other collaborations have already begun in India, the Philippines and Kenya.

We believe that by bringing together the right mix of resources, expertise, and employee talent, we will be able to make remarkable progress in Indonesia and beyond. We look forward to all the positive impact we will be able to drive together through the development of these new mobile technologies, and we hope this program will serve as an example for future collaborations between the private sector and social innovators.

Alex Counts is the President and CEO of Grameen Foundation.

Lauren Moore is the Head of Global Social Innovation, eBay Inc., and President, eBay Foundation.

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