GSMA and Gates Foundation target the 'unbanked'

A billion people in emerging markets do not have a bank account

The GSM Association (GSMA) has teamed up with the Bill and Melinda Gates Foundation in a bid to use mobile phone technology to help bring financial services to people in the developing world.

Speaking during his opening keynote at Mobile World Congress in Barcelona, GSMA chief executive Rob Conway announced details of the Mobile Money for the Unbanked initiative, which will use a $12.5m (£8.7m) grant from the Gates Foundation to launch around 20 projects in Africa, Asia and Latin America.

The project aims to bring financial services over some form of mobile connection to at least 20 million people who are unable to access them reliably by 2012.

"There are over one billion people in emerging markets today who do not have a bank account but do have a mobile phone," said Conway.

"This represents a huge opportunity, and mobile operators are perfectly placed to bring mobile financial services to this largely untapped consumer base.

"Based on the initial findings of research conducted with the Consultative Group to Assist the Poor and McKinsey & Co, we believe that mobile money for the unbanked has the potential to become a $5bn [£3.5bn] market opportunity over the next three years."

The grant from the Gates Foundation forms part of its Financial Services for the Poor initiative, which is involved in a range of similar projects aimed at helping people in developing nations and rural areas to better manage their finances.

The programme provides ways of setting aside small sums of money in a safe place to help guard against risks, build assets and provide opportunities for the next generation.