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Today, 1.7 billion people with mobile phones do not have bank accounts. Taking this into account, the growing phenomenon of mobile banking is widening access to financial services in Cameroon and throughout Africa. Financial experts suggest that just a mobile phone and a SIM card have the potential to erode poverty.

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by Comfort Mussa, Reporter, Thursday - March 15, 2012

“It’s very efficient and cost-effective,” Pascaline says.

Pascaline subscribed to the service at the MTN Cameroon mobile service provider in her town and received a code to text to her mother. She bought airtime worth 10,000 francs ($20) and transferred the money to her mother via cell phone. Using the code, her mother collected the money at the MTN Cameroon service center in her village.

For this transaction, Pascaline paid a fee of 100 francs (20 cents), which she says is cheaper than transferring the money using a bank account.

“With local banks, the transaction costs 500 francs [$1],” Pascaline says.

Mobile phone companies and banks are teaming up to provide mobile financial services to the citizens of Cameroon, enabling them to use their cell phones to transfer money and pay bills. In addition to increasing convenience, financial experts say that the growing phenomenon of mobile banking has the potential to erode poverty by connecting citizens without bank accounts to financial opportunities. The development of these services faces challenges though, such as poor network connections, power outages and low awareness.

This year, about 1.7 billion people will have mobile phones but not bank accounts, according to predictions by the Consultative Group to Assist the Poor, an independent policy and research center housed at the World Bank that is dedicated to advancing financial access for the world’s poor.

Petipe Paterne Aimé, a microfinance expert who lectures on the topic at the Catholic University of Cameroon, says Cameroonian banks, like Banque Internationale du Cameroun pour l’Epargne et le Credit, are forming partnerships with mobile phone operators to provide mobile financial services. Paterne applauds this step as mobile phone operators have a wider reach than banks because more people have cell phones than bank accounts.

Local phone operators have launched various mobile money services thanks to this partnership. MTN Cameroon has introduced MTN MobileMoney, an electronic wallet that enables users to send and receive money via their cell phones. Another mobile phone service provider, Orange, has launched Orange Money, its mobile money service that allows customers to pay bills through their cell phones.

One such customer is Ndi Apollinaire. Working from 5 a.m. to 8 p.m. daily as a taxi driver in Bamenda, he says he does not always have the time to go and wait in line at Applied Energy Services-Société Nationale d’Electricité du Cameroun, the electricity service provider, to pay his electricity bill. He says he is excited about the new option to pay his electricity bills through Orange, his mobile phone service provider.

“I have paid my bills through Orange once,” he says.

He says there are still a few kinks to resolve, but he is confident in the future of this system.

“The second time I tried it, the transaction did not go through, and I lost some of my credit money,” he says. “The service is new and am sure Orange and AES will work on it so that it is more efficient.”

In addition to being efficient, finance experts here say that mobile banking could be a key solution to help people out of poverty.

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