The last several months, in my spare time, I’ve been consulting with the ND Haiti Program on a number of initiatives related to Information and Communications Technologies (ICT) to assist their program and mission. Most recently I’ve been investigating how mobile usage and ownership can be leveraged for a positive impact. In particular, looking at mobile money and how it can be used to improve cash flow and transfer in an economy where so few of the population have bank accounts or traditional financial services.
Facts about banking in Haiti —
-only 10% of Haitians had used a commercial bank prior to the 2010 earthquake (according to USAID).
-two bank branches per 160,000 people.
-54% of Haitians live on less than US $1 per day, 78% live on less than US $2 per day.
-one-third of bank branches in Haiti were destroyed in the 2010 earthquake.
-35-40% of Haitians own a mobile device. Though I have reports this number is much higher.
Mobile money services are new to Haiti and their presence opens a number of new opportunities for the largely unbanked Haitian people. In June 2010, the Gates Foundation and USAID sponsored the Haitian Mobile Money Initiative, to drive innovation in the field of mobile money/banking. A $10 million effort, the program challenged the local telecommunications firms to innovate and come forward with a competitive, viable mobile money solution. In January 2011, the Gates Foundation and USAID awarded $2.5 million, the First to Market Award to Digicel, for becoming the first mobile network operator (MNO) to launch a mobile money service in Haiti.
As of today, there are two competing mobile money systems in Haiti that I know of, with the Digicel Tcho Tcho Mobile being the first and most recognized. The other mobile money service is T-Cash offered by Voila`. Voila` T-Cash is being utilized by MercyCorps for a cash-for-work program. In addition Nick Kristof from the New York Times recently wrote a blog post on “mobile wallets” and banking in Haiti. From the research we’ve conducted, with our teams at Notre Dame and on the ground in Haiti, we seem to think Digicel Tcho Tcho would be the best fit for what we’re considering. The NGO World Vision has had success in making use of Tcho Tcho Mobile for a cash-for-work program.
The idea we are discussing with the NDHP includes using a mobile money system to make payments for cash-for-work (CfW) programs. The first step would be to run this as a pilot with a local factory that produces fortified salt, where there are roughly 15 employees. Eventually we’d like to see if and how this would scale to a much larger group of community health workers (CHWs) and volunteers that assist with a mass drug administration (MDA) in and around Port-au-Prince.
Using mobile money and payments for the NDHP would accomplish a few key goals.
1) Security/Risk mitigation – Decrease in security and theft risks involved with cash distributions to the workers, many of which still live in temporary camps.
2) Funds management – better understanding of financial management, an ability to ‘save’ money in their mobile wallets, as opposed to cashing out immediately upon payment.
3) Efficiency of payments – a more efficient method of distribution, without the need to wait in long bank queues to cash checks, etc…
4) Timeliness of payments – improve payment delivery times which currently stand at 4-6 weeks.
Much more to come with this, and I’m enthusiastic to see this effort move forward.