London — Mobile financial services are projected to improve the lives of nearly two billion people in developing countries by 2020, according to a study from a Boston Consulting Group reported by Reuters.
The report looked at five countries with a broad development range, including Pakistan, India, Malaysia, Serbia and Bangladesh.
According to the study, nearly 72 percent of the population does not have access to credit cards or banks — typically relying on borrowing money from friends, short-term credit from employers or seeking moneylenders which can lead to uncertain results. Mobile banking services, however, would alleviate this problem and improve the economic conditions in these countries.
“Overall, mobile financial services can reduce financial exclusion by 5 percent to 20 percent through 2020 and increase gross domestic product (GDP) by up to 5 percent, with Pakistan, for instance, potentially seeing a 3 percent uplift,” the study said, released by Norwegian telecom group Telenor on Tuesday.
Companies like Telenor have begun to invest in mobile payment systems in third-world countries, hoping the outcome helps economic shocks from unexpected natural disasters and emergencies.
“We believe that mobile financial services will be one of the key drivers for financial inclusion going forward and thus has the potential to be the most powerful tool for economic and social development in emerging economies,” said Telenor Chief executive Jon Fredrik Baksaas in a statement on Tuesday.