www.epaynews.com reports that,
Aug 01 2008 : Up to 300,000 Mongolians will be reached by a new cellphone banking service to be launched by Mongolian microfinance firm XacBank. The Consultative Group to Assist the Poor (CGAP ), a Washington, DC-based microfinance body, is supporting XacBank with technical assistance and funding.
The new service will enable people living in rural areas to make cash deposits and withdrawals, take out loans, send remittances, and make cash transfers. Cash-handling services will be provided by merchants.
“By offering banking services on cellphones via a network of local merchants who will handle the cash (transactions), XacBank will make it affordable for Mongolians who use only cash today to take advantage of secure financial services,” Gautam Ivatury, Manager of CGAP’s Technology Program, says. “This means farmers and nomadic herders will have a safer place to store their money.”
About 40 percent of the Mongolian population use cash exclusively, Ivatury says.
The project will launch in 2009, Jim Rosenberg, Communications Officer for CGAP’s Technology Program, tells ePaynews. “We anticipate that the project will provide insights on customer uptake in dispersed areas that are applicable beyond Mongolia.”
“Mongolia has one of the lowest population densities in the world – about one person per square kilometer,” says XacBank CEO Ganhuyag Ch. Hutagt. “So cellphone banking services will have a considerable impact in offering wider access, convenience and cost-efficiency, as well as increased speed and reliability for transactions.”
CGAP says that XacBank’s initiative will help to identify viable business models that can overcome the constraints faced by banks in reaching low-income customers.
XacBank is Mongolia’s largest microfinance institution, according to CGAP.
CGAP provides banks and governments with resources such as information, advice and technology to help them provide banking services to poor people around the world.