Washington: The Government of Maldives would be soon launching a mobile phone banking project that will enable subscribers to transfer funds using their telephone-based bank accounts.

The project is designed to improve access to financial services by allowing users to access any bank account using their mobile phone.

It would also help the country create a single currency payment system, which offers a set of mobile telephone-based accounts, enabling subscribers to transfer funds to and from bank accounts and to and from telephone-based accounts.

In addition, the project aims to build an enabling environment and the capacity to support successful mobile phone banking systems.

According to sources, the country has also got an approval from the World Bank for a US $7.7 million credit through the International Development Association. The credit has a 40 year maturity term with a 10-year grace period.
 
"The widely dispersed population in the Maldives makes delivering financial services through traditional branch banking networks very difficult," World Bank Country Director (Maldives) Alastair McKechnie said.
 
But given its highly literate population and high coverage of the mobile phone network, he said that the country has a great potential to use technology in overcoming the barriers of geography and low population density to deliver financial services at low cost.
 
McKechnie further added that the project would help reduce the vulnerability of people living in remote areas who currently have little access to formal bank outlets.
 
"The target group that will most directly benefit from this project is people who live and work in the widely dispersed islands," he said.
 
The concept of the project was prepared in collaboration by the Maldives Monetary Authority (MMA) and the microfinance industry body Consultative Group to Assist the Poor (CGAP).
 
As part of the project, CGAP will provide parallel funding of US $1.5 million for policy advice to the Maldives Monetary Authority on the establishment of a regulatory framework for mobile banking.
 
According to CGAP CEO Elizabeth Littlefield, the initiative by the Government of Maldives aims to show that remote locations need no longer be barriers to accessing convenient and affordable financial services.
 
The Mobile Phone Banking project is consistent with the government's Country Assistance Strategy objective of improving access to finance to enhance the private sector development in the Maldives.
—iGovernment Bureau