Understanding the volatility of cash flow of poor people is important in assessing the mass appeal of Mobile Money. M transfers must be used to smoothen consumption and expense. We need to consider how a poor person who skips meals can use technology to avoid it.
The urban poor live in congestion while another group lives in rural isolation. The estate poor are institutionally dependent i.e. on their plantations. All these three groups are desperately poor. But they all share a common goal; the need to save whatever money they possibly can for their children, if that were only possible.
One method of smoothening this state of volatile cash flow is by enabling credit transfers. i.e. borrowing money in lean times from someone who may have it momentarily in excess. Thereby smoothening the common cash availability of the whole.
Kenya, South Africa and the Philippines have already executed models based on such thinking. To make such a venture possible though, awareness is needed among the bottom of the pyramid. Without awareness people will never use it, and therefore no positive effects will materialize. The regulatory framework must step in to provide security and trust to enforce this. Market infrastructure such as agent networks can be used to bring market control closer to the people.
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