Mobile-related micro-enterprises offers hope to cut poverty in RP

October 15, 2010 10:55 am 

MANILA, Oct. 14 — The Internet and mobile-related micro-enterprises are offering more hope for escaping poverty in the Philippines and other developing countries, according to the United Nations Conference on Trade and Development (UNCTAD).

In a study titled, "Information Economy Report 2010: ICTs, Enterprises and Poverty Alleviation," the UN body said on the back of the ever-wider diffusion of information and communications technologies (ICTs) –especially mobile telephones – new micro-enterprises are mushrooming in developing countries, creating new livelihood for the poor.

This microenterprises include selling airtime on the streets, refurbishing mobile phones, repairing personal computers and running cybercafés.

In some developing countries, the report said mobile phones now allow people without bank accounts to make person-to-person payments, money transfers, and pre-paid purchases.

UNCTAD cited Globe Telecom and Smart Communications Inc. as pioneers in mobile money offering GCash and Smart Money, respectively.

With some three out of four Filipinos without traditional banking services, UNCTAD said mobile-money has stepped in to fill the void with 10 million subscriptions in 2008.

"Around half of mobile-money users in the Philippines do not have traditional banking services and almost one in four live below the poverty line," UNCTAD said.

UNCTAD said the country's poverty rate in 2005 stood at 22.6 percent or 19.13 million poor Filipinos.

"Mobile-money services seem to have been taken-up quickly by farmers and are used extensively to facilitate trading in rural areas," UNCTAD said.

Citing a study from the Consultative Group to Assist the Poor (CGAP) mobile-money services were on average 19 percent cheaper than formal banks.

Moreover, the lower the transaction value, the cheaper mobile services were. In addition, mobilemoney transfers were as much as 54 per cent less expensive than informal options.

"Mobile-money has also been credited with reducing the risk of theft since users do not have to walk around with large sums of cash," UNCTAD said.

Rizza Maniego-Eala, president of G-Xchange, the wholly-owned mobile commerce subsdiary of Globe said the company has a monthly value transaction of P5 billion for its GCash service.

Globe on Thursday launched GCash Card, the first customizable ATM card linked to a mobile wallet in the country, giving its subscribers 24/7 access to GCash.

"With the launch of the GCash Card, our customerrs are given an additional 9,000 locations to cash out their GCash using almost any ATM nationwide. On top of the online community sellers and buyers who benefits from this new and convenient channel for cash-out transactions, this is also our way of bridging the gap between the underbanked and banked markets serviced by rural bank partners," Eala said.

UNCTAD, however, said that one barrier has been limited distribution outlets to process cash transactions from mobile-money accounts.

In the Philippines, the Bangko Sentral ng Pilipinas approved the process of mobile money transactions in a wider number of outlets.

In the case of GCash, this covers some 18,000 outlets including sari-sari stores, pharmacies, Internet cafes, food establishments, rice dealers, farm and poultry stores, gas stations, and multi-purpose cooperatives.

CGAP estimated that there are around 4 billion unbanked around the world and that 1 billion people who do not have a bank account have a mobile phone.

UNCTAD also said that the business process outsourcing (BPO) has the potential contribution to poverty reduction.

The report said outsourcing and offshoring is a potential sources of employment and export revenues.

In the Philippines, BPO export revenues rose from 0 million in 2001 to $ 6 billion in 2008.

While BPO sector employed about 400,000 people in 2008 and expectations are for this number to grow to more than 900,000 by the end of 2010.

In addition, the country's ICT manufacturing industry employed some 222,000 people in 2005, corresponding to about 22 percent of the entire manufacturing workforce, and 23 percent of total wages and salaries paid in the manufacturing sector.

ICT goods exports have soared, amounting to $ 27 billion in 2008, or more than half of the country’s total merchandise exports. (PNA) LOR/DGA/utb

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