May22

TC105: Thoughts on Mobile Money for Development

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TC105: Thoughts on Mobile Money for Development

A few weeks ago, I had the pleasure of supporting the TechChange Mobiles for Development (TC105) course as a moderator.  I was interviewed for the course by co-founder Nick Martin, which stimulated a interesting conversation with many of the highly experienced and knowledgeable course participants.  Excerpts from that interviews are below.

The course itself was an amazing opporunity to interact with experts across the ICT for development field, and to dive into specific areas of interest including mobile financial services, mobile health, and mobile education.  I highly recommend checking out their upcoming course on the same topics – early registration is now open on their website.

1. Just so everyone is on the same page can you walk us through the difference between mobile money transfer, branchless banking, and the other various terms used in the industry?

  • Branchless banking is simply banking outside of bank branches (retail outlets) – it doesn’t need have to use a mobile phone.  As @yoe [course participant] mentioned in the Zambian case study,  “retailers on any small town could be potential small bank branch.”
  • Money money is an umbrella term for anytime you are using mobiles to conduct financial transactions.
  • Money transfer is the movement of electronic value from one phone to another.  This is the basis the of peer-to-peer (P2P) transactions, which are driving the growth in Kenya, and can be the base for other, more complex products such as microfinance loan repayments or microinsurance.

2.  You just got back from Haiti.  Can you talk about some of the projects and work that MEDA is hoping to do in the country?  How have you seen use of mobiles evolving over time in Haiti since earthquake?

  • MEDA is working with Fonkoze to help them develop a comprehensive strategy for leveraging mobile with minimum risk to the MFI and to their social goals.
  • In terms of mobile money in Haiti, the conversation for a while after the earthquake was all about cash-for-work payments, which is a post-disaster mentality because  cash-for-work is a short-term response mechanism, not sustainable job creation.  Now, there seems to be a lot more momentum in thinking about how to use mobiles for long-term empowerment & job creation. For example, the local tech company Solutions is looking into how to use mobiles with NFC to map agribusiness throughout Haiti, and there has been great progress in starting the Ayiti Living Lab, which will incubate local innovation to make tech more relevant to local communities.

3. You worked on the launch of mobile money in Haiti at Digicel, and now are supporting the growth of the field more broadly. You mentioned in the chat that there are 121 deployments of mobiles for financial services around the world but only 11 have over 250k active users.  Where do you see the field heading?

  • I see a broader recognition in the development field that the excitement around mobile money is really about branchless banking and that the mobile phone is only one delivery method – there has to be flexibility to consider ATM cards, paper vouchers, and over-the-counter transactions depending on the context.  The goal is to provide safter and more convenient alterntives to cash and to the traditional bank branch.  When we start from this premise, it is much easier to build products based on user preferences and to drive active use.


5. We’ve talked about the village phone ladies in this course, many are also familiar with one laptop per child. How do NGO work in the space of mobiles and innovation while taking on the risk of unplanned obselesnce is raised and working against evaluation frameworks, donor cycles, etc.?

  • This will be the new paradigm of aid, which will be more “opensource” and harder to measure.  Impact will be less about meeting pre-set goals and more about stimulating innovating thinking and social change in less quantifiable ways.


5. Question from Janita (one of the course participants): “Hello Chrissy. I am very interested in knowing more about the SMS technology to help deliver vouchers electronically to health clinics. How do you keep it fraud free? Do you work with all telecoms or have you chosen one telecom to work with? Do you have one short code?”

  • Fraud starts with proper identification of participants.  If you can get each person registered with one phone number, you’re probably good.  If your participants share phones or don’t have phones to begin with, this might be more of a challenge.
  • If you are sending vouchers, you need to work with at least mobile money provider (telecom or other)  They should send a voucher with a one-time code redeemable at specific location.  In this type of a program, you would’t need a short code.
  • If you need a  short codes from all of the main telecoms, this would be great, but can be a challenge and the time for negotiations needs to be built into your program plan.


6. What advice would you have for folks wanting to do work in mbanking sector?

  • Pick something to specialize in where there is a currently a lack of expertise (in other words, don’t do what everyone is doing)
  • Develop a technical expertise – content knowledge is rarely enough
  • On-the-ground implementation experience is important in any field; in mobile financial services, private sector experience can provide an extra edge since this field is really an intersection of multiple sectors (private, public, and non-profit)
May9

Mixing in patience & and a little sweat…Thoughts on Community Development part 2

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Mixing in patience & and a little sweat…Thoughts on Community Development part 2

In my last post, I wrote about creating community ownership of projects, and focused on the need to ground truth innovation in the design phase.   Now, moving onto my second observation from Cite Soleil, I will discuss sweat equity in the implementation process.

What is sweat equity?  I chose this term to depict the fact that ownership does not necessary mean that communities have to pay for it.  It does, almost always, mean that the project will take more time than planned.  One example provided to me by my friend Sabina:  An NGO decided to build a school in the community.  They purchased the materials, but made it clear that the school must be built by the community themselves, and by members of multiple blocs to overcome trust issues (see previous post.)   The building of the school started, and stopped, started again, and stopped again.  Each time, the NGO did not step in to continue the building, and their consistency made it clear that the community alone was responsible for the completion of the school.  When it was finished, the community did not only use the school, but it became a full community center, voluntarily used for community events and social gatherings.  On the contrary, a child nutrition center right next door cannot seem to get anyone to come to the center.  Why?  They built the center without any community buy-in, and failed to recognize that it would have been much more sustainable to provide income-generating activities within the area (which offers very little formal employment) so that parents could afford to feed their children on their own.

Another example is this Eiffel Tower.  The picture was started by a young and humble graffiti artist, Snake, who will paint upon request for little to no commission, as long as the procurer provides the spray paint.  However, spray paint is relatively expensive, and this Eiffel Tower, unfortunately, is not yet finished because the community members who asked for it have run out of money for paint, for the time being.  And yet, they still find pride in the picture, which is for the community and by the community, and they are confident that it will be finished someday.  Sabina, who still has some American sensibilities despite being integrated with into the Haitain community, has been tempted to simply buy the paint and get it finished.  Hwoever, she knows very well that if she did, the picture would be ruined, and would no longer have any meaning for the community.  So she’ll just have to wait, too.

Apr25

Working in the Red Zone…Thoughts on Community Development, part 1

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Working in the Red Zone…Thoughts on Community Development, part 1

Community development takes time.  I think we all know this, to some degree, and yet the message often gets lost in the world of development aid with our funding cycles, program goals, and an understandable desire to scale quickly.  I recently had a chance to reflect on the necessity, and difficulty, of creating community ownership of development projects during a trip to Haiti. I had the privilege to spend time with a good friend, an American woman living in Cite Soleil.  Cite Soleil is an area made famous by the documentary film the Ghosts of Cite Soleil, which depicted a violent gang warzone.  The area, made of up possibly 400,000 residents and including both rural and urban areas, is still considered one monolithic neighborhood and a “red zone” by many organizations, (meaning that they consider it not safe for international staff.)  And yet, development organizations continue to work in the area, many realizing that these negative depictions do not reflect the reality of a community that may have systemic problems but that also has families, children, entrepreneurs, schools, and incredible amount of potential.

Helping Cite Soleil, however, is not easy.   It is not one community but an area made of up many blocs.  There is a lack of trust between blocs, and a general lack of trust of outsiders – paint an NGO logo on a school and you can almost guarantee that no one will enter.  This lack of trust stems, in part, from the history of politicians favoring certain groups at certain times, providing gifts and money to some in order to cause conflict with others (a text-book example of the classic divide and rule tactic often used by rent-seeking states seeking to control a population.)

I’m reminded of a blog post I wrote a while ago on the message of the movie Where the Wild Things Are, which is a story about the “risks of making promises you can’t keep and of trying to solve the problems of people you don’t understand.”  Outside projects, no matter how well-planned or funded, will easily fail when faced with the reality of community dynamics, since “relationships and human emotions are complex and messy,” in any society.

So how can well-intentioned outsiders help in such an environment of mistrust?  Although I won’t claim to have all of the answers, I will share two lessons that I observed clearly during my recent visits.  The first, ground truthing innovation in the design phase, is discussed here, and the second, sweat equity in the implementation process, will be discussed in the following post.

Ground truthing innovation in the design phase:   Brilliant people in the developed world can conceptualize and develop a seemingly infinite number of interesting products to help poor areas such as Cite Soleil, and our tendency is often to build, make sure it works, and then scale.  However, testing products within the community (much like the concept of rapid prototyping in product design) can avoid costly deployments of technologies that simply won’t be accepted by the community.  A good example of this idea being implemented is the work of Haiti Communitere, an organization that provides a space for international organizations to test new ideas with the community before they are deployed.   One idea, to improve shipping containers that have been used as UN offices since the earthquake, was rejected by the community members who tested it and simply stated, This is not a house.

On the other hand, a house being built out of recycled materials from around the area is being embraced by those Haitians who are participating in the building of the house.  This house is built out of the 1000s of styrofoam containers left in canals and roads all over Port-au-Prince, and yet through clever design and involvement of the community, it is becoming a real home.  Therefore, it is not only well-designed to be sustainable and earthquake-resistant, but it will also be an comfortable place for a family to choose to live in with dignity.

This process of ground truthing innovation serves multiple purposes: it involves the community in the design process which helps to create community buy-in & ownership; it helps to avoid costly deployments of technologies that will be rejected by the community that we are intending to help; and it stimulates further innovation by providing (in the case of Haiti Communtere) open-source ideas that can be modified and adapted to work in other communities.  This creates a low-cost scaling mechanism which can create a larger amount of impact, over time, by creating a ripple effect of innovation in communities across Haiti.  Of course, this may also prove to be difficult for organizations to accept since it will be harder to take credit for and to evaluate the impact of open-source development projects, especially if the real impact will come from other people implementing your idea without you even knowing about it.  Yet, if our goal is to create sustainable change with limited resources, then we may have to challenge some of ideas of how to evaluate impact.   I would love examples or thoughts on how your organization is handling these challenges.