Despite having more than 550 million subscribers, the Chinese mobile market still has a lot of room to grow. Except that it won’t take place where you’d expect it: penetration in rural areas is still around 20% compared to 40% in cities.
Thanks to a 3-year project backed by Ericsson and the United Nations Development Programme (UNDP), lower-income farmers in remote villages are expected to be able to use their mobile phones soon to gain access to rural financial services – financing SME in China is one of the growth bottleneck. The project aims to overcome geographical isolation in the countryside, which has made access to rural financial services such as getting credit, sending remittances or making deposits expensive and difficult for people in rural China. China Mobile already offers an agricultural information service with advice on how to raise crops and animals, weather forecasts, news, and information on market prices for various products – for USD 0.25 per month per information category.
Developing a mobile rural bank system will also allow Chinese banks to save a lot of money in comparison with having to create a physical infrastructure. The success of catering to lower-income population has already proven a success – bith for operators and for the citizen - in a number of developing countries (like Grameen Phone in Bangladesh).
So, the future is in the countryside!