How poor people solved a problem no one reading this ever had: Creative use of cell phones as, well, a bank!

This is a problem of being poor you likely never thought of.  

Poor people--especially those in developing countries have a special dilemma--how to save money and, in the process of doing so, still keep it safe.  If you think about it for a minute, having the problem makes perfect sense: How does one preserve capital earned and not spent and keep it from being lost or, more likely, stolen?  

This difficulty confronts billions of people who lack a documented identity or who do not have access to modern banking services in the small towns and villages where they live.  You see, if you are poor and want to save money for the future, you have to quite literally hide it someplace--in the ground, under your bed-roll, in a jar, stash it in a box on the shelf.  But all of those places are very vulnerable to the reach of thieves, making saving money either a formidable challenge or an unappealing endeavor--yet one of paramount importance to breaking out of the poverty trap.  

Making money is hard--keeping it safe is even more difficult.

Poor people don't lack the inclination to save, they just lack the tools to do so--and thus, miss the opportunities of being an entrepreneur and breaking the bounds of poverty!  That is, until the advent of the cell phone.  Several years ago researcher in Africa noticed that the poor people were taking advantage of the ability to transfer money by cell phones and turning the device into a bank of sorts.  

In Kenya the mobile phone provider Safaricom introduced a plan whereby 14 million Kenyans can transfer money to each other by texting; it was soon after that that the poor figured out how to make that kind of system work for them as a way to keep their excess money safe.  

A $20 mobile fone becomes a safety deposit box.

The program is known as M-PESA and at local offices of the mobile carrier, customers there can deposit cash for transfer, which about 70 percent of that country's adult population actually does.  But inherent in that process, the $20 phone, though becomes a "banking" device; this occurs when less money is transferred "out" than is actually deposited "in"!  Then, presto, the mobile phone becomes a device to keep money safe from loss and thieves!  "I couldn't have designed something as elegant," said Jan Chipchase, a former Nokia employee was quoted as saying in a recent Bloomberg Businessweek article on the topic.  

Move over Steve Jobs!

It just goes to show how technology designed for one purpose quickly evolves into another.  Steve Jobs and the smart people at Apple are credited in our part of the world for turning "dumb" phones into "smart" ones--changing the world of such hand-held devices in the process.  Well, this story just goes to show how the huge banking need of billions of people is solved by a device that was originally intended for another purpose; but this time, the credit doesn't go to Mr. Jobs or any of the bright people who work for him.  Instead, it goes to the resourceful-but-poor people who found a way to solve a big headache they've had to grapple with for a long time.  

Who said that poor people aren't smart?  No, they're not stupid--they're just poor.  But today because of programs like those offered by Safaricom they've turned the corner and are taking the first steps to make a break with the past and the chronic problems of poverty.  Good for them and their resourcefulness!  

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Follow Keith's biz blog on Twitter for updates and see more of what he's reading about on his Facebook Page. If you are inclined, you can write him at kmurray@bryant.edu.