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Is Mobile Money Relevant to Refugees?

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My first professional experience in the international development field was at the International Rescue Committee in Charlottesville, part-time while at the University of Virginia.  Working in a resettlement organization provided  me with a unique chance to interact closely with refugees from countries including Iraq, Uzbekistan, Burma, and the DRC, and to hear their incredible stories of fleeing terrible situations and eventually finding themselves in Charlottesville, a safe, comfortable place where they could send their kids to schools for free.   Of the many things I learned from this experience, there was one thing that struck me the most.  Despite the fact that many of these people had been professionals in their own countries before being forced to flee, they started out their new life in debt.  Unable to take any assets with them, they had no money or belongings – only a plane ticket to America which the US government asks them to repay, eventually.

Credit: IRC Charlottesville

Now, I know that resettlement is an incredibly complex issue and that there is a seemingly endless stream of challenges in dealing with refugee populations.  At the same time, this idea of loss of assets struck me as one challenge that we should be able counter, fairly simply, in our modern world where electronic money is becoming the norm.  I was so interested in this concept that I considered writing my Masters thesis on it; unfortunately, there simply wasn’t enough literature or activity in this area to do so, at the time – and this was just a few years ago.  Now, with mobile and electronic banking spreading throughout the developing world, and with organizations testing the use of new financial tools for a variety of development and humanitarian, purposes, I am excited about the possibility to revisit this topic.

There is a fair amount of work and interest being focused on how to use e-transfers – whether through mobile phones, ATM cards, or vouchers – to send people money quickly when a disaster hits (see this recent article which provides an overview on some of the projects being carried out by Concern Worldwide.) This is a great start.  However, from a resilience perspective, we have a lot more work to do to make sure that people can build assets over time and access these assets from anywhere.  In order to do this, there are are three steps that I see as critical, which cover the  financial education, regulatory environment, and quality of service.

First, people in vulnerable areas need to have a permanent account that they know how to use – voucher programs are a good initial step but do not provide this; therefore, we should be pushing to transition cash transfer programs from vouchers to accounts as quickly as possible (note: this applies to paper or mobile voucher programs.)

Second, regulations need to be in place that ensure that people can access their accounts even if they lose their official form of identification – this was a major issue after the earthquake in Haiti, and is true of many of the types of situations that create refugees in the first place.  Regulations and services also need to be in place in order to allow these accounts to be accessed in any country – in the current situation, I can access my Citibank account worldwide, but a Kenyan can only access their M-Pesa account in Kenya, which would leave them without access to those funds in a refugee situation where they were not able to return to Kenya, for any reason.

Thrid, people have to trust the organizations that provide these accounts, so they feel comfortable converting non-liquid assets, such as livestock, to electronic stored value.  While all individuals and households should make their own decision about how to diversify between liquid and non-liquid assets, it is important that they understand that only assets held in electronic form will be accessible to them in the event of a crisis where infrastructure is destroyed or where they cannot return home.

These are a few of the factors that I think are critical – I would love your thoughts on what else would be required to make mobile money relevant to refugees.

Looking Forward: Mobile Money in Haiti

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From July 2010 to July 2011, I worked at a cell phone company in Haiti, Digicel, where I designed, tested, and implemented the first mobile money product in Haiti, TchoTcho Mobile.   Digicel had explored the idea of launching mobile money before the earthquake occured in January 2010; however, the impetus to launch when they did was in large part due to the Haiti Mobile Money Initiative, a $10 million incentive fund launched in partnership between USAID and Gates Foundation.



The scaling phase of this award is still in process, and it was recently announced that the two existing mobile money products, TchoTcho Mobile and T-Cash, have reached 1 million transactions combined (press release here.)  Despite this impressive achievement, for those carefully watching the progression of mobile money in Haiti, it has clearly not reached a tipping point where a significant percentage of Haitians are using the product.  As Dalberg put it in their recent report, ‘there is more to be done in establishing these services,’ and operators are still grappling with the challenge of ‘build[ing] a critical mass of active users around a well-designed and well-supported service delivery model.’  The same report outlines many of the challenges that the operators have faced in terms of consumer education, regulatory, and partnership issues.  Digicel’s specific operational challenges were very openly and honestly discussed by the former CEO Maarten Boute at the GSMA Mobile Money for the Unbanked Working Group in Barcelona in February of this year, and the video of that interview can be found here.

So what can be done?  With the incentive prize coming to an end, there is a question of how the development sector can continue to engage with mobile money in Haiti and to support the adoption of the product throughout the country.  I am often asked this question: What can we do? because of my experience, and one of my first answers is: Everything in Haiti takes longer than expected, and a little patience goes a long way.  However, with deeper thought, I have come up with a few ideas that I believe can be practically implemented, and which aren’t the commonly cited solutions – which include more customer education and lower the legal transaction limit of 10,000HTG (250 USD), both of which are critical parts of the equation.

  1. Build products that address the need for security – I truly believe that mobile money in Haiti will be a success because I saw in my time at Digicel that there is real demand for the product.  This demand first and foremost came from the need for secure ways to store and send money, which do not yet exist in a country which has a high amount of theft.  I saw that many of our customers were using TchoTcho Mobile to save small amounts of money on a weekly basis.  In another situation, we interviewed market retailers who were using the service to immediately deposit cash after making a large sale, so that they were not targeted by thieves due to the visibility of the sale.  This real demand is there and can be accessed with proper communication of the value proposition, and with well-trained and accessible agents.
  2. Encourage the platform providers to open up their systems –  Allowing 3rd parties to build apps on top of the existing platforms is the quickest way to expand products and services  – think Twitter, Facebook, and the iPhone – 3 of the most successful products in recent years, all of which have driven usage through 3rd parties (think Farmville!)  Currently, it is extremely hard to integrate the TchoTcho Mobile back end (provided by Yellow Pepper) with any other system, even a bill payment system for say, a water company.  This change would take time and a bit of resources, but could make a substantial difference.
  3. Conduct research on how to make retail payments (or bill payments, etc.) work – I recently met with FinMark Trust who are doing a similar study in Zambia in order to try to jump start the mobile retail payments industry there. Research is a good use of donor money in this situation because the operators are short-staffed (per Maarten’s comments in the above video) and therefore having an outside party provide research on how to enter new markets with value-added services (VAS) can help to kick-start new projects.
  4. Recognize the potential for a non-MNO actor to enter the market – This is absolute blasphemy coming from someone who spent a year working at the MNO and fully believing in the strength of the MNO to drive mobile money.  I still believe that Digicel can drive TchoTcho Mobile and that the product will be successful.  At the same time, I am now working with innovative start-up companies such as Mobile Transactions in Zambia, and I see that they can create different, creative products for new market segments (more on this on the CGAP Technology blog.)  MNOs are great at delivering mass-market products, such as airtime or peer-to-peer transfers, which are accessible and useful to almost everyone.  There is less evidence that they are able to successfully develop and provide services to smaller population segments, such as smallholder farmers or savings groups.  Development actors can help MNOs do so, as is the case with Grameen app lab in Uganda, while at the same time companies such as Mobile Transactions are proving that a 3rd party can find a viable business model in serving these different markets.

So despite the challenges, mobile money is and will continue to move forward in Haiti.  There are already many exciting new initiaves which are using mobile money to rebuild houses (with UNDP), to provide funds to purchase food (Food for Peace), and to help parents in Cite Soleil send their kids to school ( Ti Manman Cheri ).  These current initiatives show the potential of the service to grow through partnerships, which can help to address each of my points above by encouraging innovation from a wide variety of actors.  I personally will continue to support growth of mobile money in Haiti through on-going support for Fonkoze through my current position at MEDA, and as an active observer, consultant, and a passionate believer that Haiti can and must be supported with sustainable, lasting solutions.

TC105: Thoughts on Mobile Money for Development

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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)