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IRVINE — The Bill & Melinda Gates Foundation has awarded UC Irvine a $1.7 million grant to create a new research institute focused on the growing use of mobile technology in providing banking and financial services to people in developing countries.
The Institute for Money, Technology and Financial Inclusion will be the first to explore how the world’s poorest people spend, store and save money. The institute will study how these habits are affected by the emerging mobile banking industry, known as "m-banking," which could make financial services and the security they provide available to millions of poor people for the first time.
It also will fund research in developing countries, host conferences and provide scholarships to those who conduct such research. An archive on the emerging m-banking industry for use by researchers in the U.S. and around the world also is being planned.
"This kind of research is critical to informing the design of financial products and services that meet the needs of the poor," said Amolo Ng’weno, senior program officer for the Bill & Melinda Gates Foundation’s Financial Services for the Poor initiative. "We need to understand ways that the poor think about and use money so that new banking models can become relevant for the population with the most need. Convenient, low-cost, high-quality savings and other financial services can help the poor transform their lives."
UCI anthropologist Bill Maurer will serve as the institute’s founding director.
"More and more people, including the world’s poorest, have some kind of daily access to a cell phone, though few in many developing countries have access to banks," he said. As a result, a number of new mobile technology-based money and payment systems have emerged, including Safaricom Kenya’s service, which provides phone-to-phone fund transfers via secure text message. Other companies and development agencies are exploring the use of mobile phones, plastic cards, chips and mobile point-of-sale terminals to provide access to banking and financial services.
While there is increasing activity in the m-banking industry, there is surprisingly little known about the impact of these new systems, Maurer said. This is especially true among poor people and the so-called "last billion" who are hardest to reach because they live in remote areas.
The explosion of interest in mobile banking and new money and payment systems that use information and communication technology has not been matched by an increase in rigorous academic research, Maurer said.
The foundation will provide funding for the institute through August 2011.
About the Bill & Melinda Gates Foundation: Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to ensure that all people – especially those with the fewest resources – have access to the opportunities they need to succeed in school and life. Based in Seattle, the foundation is led by CEO Jeff Raikes and co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.
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