How Cell Phones Can Democratize Banking for the Underserved

The Vision Behind from Carol Realini Speaking at Women 2.0 Founder Labs

10 – 5 – 3 – 1  is Carol Realini’s Law for raising capital, a skill she has in spades. Carol is an entrepreneur who “eats nails for lunch”  starts companies and raises capital to fund them. After retiring she became intrigued by the work of an NGO group teaching peace to war torn parts of the world. This led her to Africa, Congo and Burundi where she witnessed that everything was broken except for cell phones that worked brilliantly.  If pre paid cell phone minutes could be converted to currency,  people could send or receive payments through their mobile phones. 

This is Carols dream to use cell phones to make “payments” and democratize banking in the world. Her dream became a reality in 2002 with the start of  “Obopay”. Today Obopay operates in emerging markets around the world. Her dream is to narrow the gap between the haves and the underserved of the world by using cell phones to accomplish this. Here are the numbers she that informed her dream.

  • 6.6 billion – the number of people in the world
  • 5.billion – the number of cell phones in the world
  • 1.6 billion – the number of bank accounts
  • The undeserved

She predicts that by 2015 there will be nine hundred million people using mobile banking. Most will be in Africa, Asia, Latin American and India. What made Carol fearless about asking for funding was keeping the higher goal in mind and remembering the people who worked for her. Carols law is a best practice for raising financing goes like this:-

  • 10 refers to the number of venture capital meetings you should secure when making the ask.
  • 5 refers to the number of companies that will perform due diligence on the idea you pitched to them.
  • 3 is the number of term sheets describing the material terms and conditions of the proposed business agreement.
  • 1 is the number of money transfers into your bank account from investors.

With the funding raised, she built relationships with operators and phone carriers in the countries she wanted to deploy Obopay. In India this was Nokia running Nokia Money as the platform behind the transactions. Mobile handsets and carriers have massive distribution through local stores in towns and villages. This is traditionally where people come to top up minutes and buy their phones. Obopay trains the people who cell minutes to be banking agents and accept physical currency payments.

To work around the lack of electric the agents “banking” terminal is the mobile phone. To make a payment a client hands over cash to the agent and the agent texts the clients phone digitally uploading the cash to the device.  A virtual ATM in effect. They agent makes a small amount of money on each transaction that with high volumes, create an incentive to learn and honor the payment system.

Carol spoke about Obopay at Women 2.0 Founder Labs, she was the last star speaker in the program and left a great impression on what it really takes to be an entrepreneur.

  • You have to have confidence in your direction to stay the course.
  • You can’t be a pleaser to build a company.
  • You Don’t back down because people are rude or reject you and your ideas.
  • You have to be passionate about the idea.
  • You have to be unreasonably committed, knowledgeable and smart about your idea.

I am grateful to Carol and Women 2.0 for the opportunity to learn what it takes to be an entrepreneur and create a successful startup company. Two things stand out :  Yes, the vision really does have to be that big and yes, it really does have to meet the unmet needs of people.

As Women 2.0 wraps up and I head out to Barcelona for the World Mobile Congress I am excited to discover who in the mobile arena has the vision and who is meeting the unmet need.

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