Gates Foundation Working to Bring Banking Services to Poor Overseas

The Bill & Melinda Gates Foundation, well known for its work in combating malaria and AIDS in Africa, have announced an effort to bring financial services, such as savings accounts, to the poor.

In a recent interview, Bob Christen, the director of the Gates Foundation’s financial services initiative, said, “It may be hard to understand how savings is even an issue for the people who live on less than $2 a day. However, access to a safe place to store money is a top priority of poor people around the world.”

In order to help develop financial services in impoverished countries, the gates foundation announced that it would be providing a $35 million grant to help facilitate agent banking services that are already being developed in Africa, Asia, Central America and South America.

Christen said that the grant provided by the Gates foundation will provide assistance to a number of organizations through the Alliance for Financial Inclusion, which has embarked on historic efforts to help people climb out of poverty, helped the poor save for their children’s education and has helped people in third world countries and develop businesses and plan for the future.

Bringing savings accounts, insurance products and other financial services to the poor will happen in a number of innovative ways, including transferring money by cell phones and setting up banking kiosks in public markets and at post offices.

Christen stated that savings accounts are a very basic need of many people and an estimated 2.5 billion people, more than one half of the world’s total adult population, do not have accessto savings accounts and other basic financial services. Instead, people in third world countries are forced to buy and pawn jewelry and make other less than desirable investments to keep their money safe.

The Gates Foundation has allocated more than $350 million in giving to help develop other financial services in developing nations. One of their major efforts has included micro-credit, which involves giving small loans to poor entrepreneurs to help them develop their businesses. Kiva.org is perhaps the most well-known of the micro-financing non-profits. Kiva is an organization that is pioneering in this fledgling industry of micro-credit by allowing individuals in the United States to lend money to entrepreneurs overseas that

Christen continued, “It became very obvious that the single service that is least developed that most people need is savings. People really want to be able to save in a safer place.” The alliance has a goal of reaching 50 million of the world’s un-banked population by 2012.