Archive for the ‘Africa’ Category

Our Work in Mobile Financial Services

Friday, June 24th, 2011

Elizabeth Berthe is the Director of Mobile Financial Services at Grameen Foundation

Grameen Foundation’s Mobile Financial Services team is working in several regions around the world to help make mobile financial services simple, affordable and accessible to the poor.  We are working to innovate on three fronts:

  • Overcome technology barriers to facilitate integration of mobile solutions for microfinance institutions
  • Research to inform and influence the development of financially inclusive products as well dissemination of best practices
  • Implementation projects focusing on processes, evolving business models and relevant products.

Around 2.5 billion adults around the world do not have access to formal or semi-formal financial services – nearly 90 per cent of whom live in Africa, Latin America, Asia and the Middle East yet more than half the world’s population have access to a mobile phone and nearly a quarter use the internet as developing countries rapidly adopt new communications technologies. Access to financial services provides poor people with much greater resilience to economic shocks and increased capacity to increase or stabilize their income. Mobile phones can play a vital role in financial inclusion.

Through our work with Village Phone we discovered early on that many users sent pre-paid airtime as a form of money transfer saving the fees to travel to transport funds.  Airtime would be purchased then sent to a broker for example who in turn would resell the airtime for cash and pay for goods or services such as school fees and this transfer would take place via text messaging.

In 2007, Safaricom, Kenya’s leading mobile network provider, formalized this process with the creation of M-PESA.   This service allows users to deposit funds into a virtual account store on the mobile phone, send funds via text message for a fee to transfer or receive money, pay bills or purchase airtime.  Cash can be withdrawn from the system for a feeat an agent location, this agent acts as a “human ATM”.  M-PESA is recognized as the most successful mobile phone‐based financial service in the developing world with more than 20% of the annual GDP of the country flowing though the system annually.

The Economics of M-PESA (Jack/Suri 2010) revealed that between 2007 and 2009 the percent of M-PESA users who were unbanked doubled (25 to 50 percent) and the number living in rural areas also increased (29 to 41 percent). M-PESA users are not just using the service to send and receive money – 81 percent of customers now use M-PESA for savings, for example. Most importantly, 91 percent of people said their lives would be impacted negatively if they no longer had access to M-PESA.

Grameen Foundation’s team in Kenya is focused on learning and disseminating information to enable mobile financial services programs elsewhere to accelerate as well as working directly with the microfinance sector to adopt mobile financial services so that they can continue to increase and deepen their outreach to the poor.

Due to this vibrant space, we would like to share learnings from our work and happenings in this fast changing but ever exciting arena.

How can mobile phones be used to reduce poverty?

Monday, February 28th, 2011

This is the second in a series of three blog posts on the M4D space by Heather Thorne, Director of ICT Innovation at the Grameen Foundation’s Technology Center.

Grameen Foundation approaches all of its work from a “Theory of Change” perspective, using this as a starting point to ensure activities and outputs are logically linked to the desired outcomes of each program.  AppLab’s Theory of Change is based on research showing that gaps in access to information and services (e.g., health, financial services, agriculture, markets, job opportunities, etc.) contribute to lack of economic opportunity and reduced welfare, therefore leading to or perpetuating poverty.  This is worsened by inability to act on information.  By leveraging mobile phones as a means to eliminate or reduce those gaps, and to reduce friction in systems, we believe it is possible to directly and indirectly reduce poverty. 

Given the potential for M4D efforts to benefit a broad audience but possibly miss the specific needs of the poor, we do a number of things to ensure a focus on the poor and poorest in AppLab efforts, such as:

  • selecting vertical areas known to have a statistical link to poverty (or lever for escaping it):  agriculture, health, livelihoods, or access to targeted financial services
  • incorporation of M&E frameworks and measurement approaches into each implementation
  • geographical targeting focused on regions known to have larger populations of poor and very poor
  • choosing mobile operators with the largest market share among poor populations we serve and choosing other NGO partners who share a poverty-focused mission
  • pricing models, such as cross-subsidization, making services available to those unable to pay

AppLab’s Theory of Change has evolved over the 8 years we have been working in the M4D space, starting first with the Village Phone replication program in Uganda, which extended to Rwanda, Cameroon and several other sub-Saharan African countries, as well as to Indonesia.  Building on this foundation, GF began exploring the potential for providing additional services through the phone nearly four years ago, leveraging the fact that low-end phones were beginning to penetrate even the most remote villages.  We launched AppLab Uganda in 2007 in partnership with MTN Uganda and Google, and spent the next two years developing partnerships with local content providers in agriculture and health, conducting ethnographic research, rapid prototyping and concept testing, developing and testing products, and launching a nationwide suite of applications called Google SMS (GSMS) in 2009.  In Indonesia, GF incubated an Indonesian-owned social enterprise called Ruma, which began to operate the Village Phone business in partnership with a large mobile operator focusing on the low-end market segment.   The model began to evolve as we learned that voice services no longer presented a viable business opportunity due to mobile phone penetration—and the Ruma entrepreneurs began to sell airtime, a similarly low-cost item that people buy frequently, in small denominations, which can be delivered through the phone by people with minimal skill and working capital– increasing and smoothing their cash flow. 

We recently completed what we believe to be the first ever randomized control trial designed to assess the impact of a mobile-phone based service aimed at improving the lives of the poor.  The service we sought to measure was Google SMS (GSMS) Health Tips, and our social impact measurement partner, Innovations for Poverty Action (IPA), performed the study. 

The learnings from the study were substantial, supporting some of our initial hypotheses and refuting others.  They indicated that when people are made aware of such services, there is indeed demand and usage of them, and that ongoing awareness efforts in general are critical to usage and thus impact.

We also learned, however, that the fundamental drivers of behavior change are not altered simply because of the phone, and if the phone is not addressing each of those drivers, behavior change is unlikely.  (You can read more about the study on Eric Cantor’s recent blog post)  Driving sustained adoption of the information and behavior change, or other outcomes that we envision, requires re-thinking aspects of the service—one of which is the often necessary role of a trusted intermediary in creating awareness and reinforcing the desired adoption of information and behavior change. 

You can read more about trusted intermediary’s and Grameen Foundation’s M4D work in Heather’s final blog post which will be posted later this week.

Introducing MoTeCH to Communities One Durbar at a Time

Friday, June 11th, 2010

The village Chief's band performs

Durbars are community entry ceremonies that must be done in all of the 11 zones where we are working with Mobile Technology for Community Health (MoTeCH) .  They include bringing offerings to the Chief, telling the community members about MoTeCH, dancing and hopefully getting the community members to formally “accept” MoTeCH as a valuable health service.  Durbars last for several hours, usually take place under a tree and we’re holding them for all 11 zones this week so we can keep on schedule with our launch activities.  (more…)

Community Knowledge Worker Pilot Report and Program Launch

Thursday, May 20th, 2010

In early 2009, Grameen Foundation went to Uganda with the idea of creating a fluid and effective two way communication channel between rural farmers

CKWs in training

CKWs in training

and the world of agricultural experts, development agencies, traders and commercial players. Through this loop, rural small holder farmers would be given livelihood saving agricultural information generated by the experts and the big  players would keep informed on conditions on the farm from adoption of best practices to available produce for sale. (more…)

Our first MoTeCH Community Health Worker System Workshop

Tuesday, January 12th, 2010

Joyce Ndago and Maria Nuela, two of our MoTeCH field staff

In December we had our first workshop to introduce and test our mobile phone technology for MoTeCH to community health workers (CHWs) in the Upper East Region of Ghana. Prior to this workshop, much of our field research and testing has focused on building content for our “Pregnant Parents” application, but today we were focused on how MoTeCH can help practitioners deliver high quality antenatal and neonatal health care. (more…)