Will Market Competition Translate to Improved Mobile Money Service & Outcomes in Liberia?

By Erica Bustinza, Chief of Party, mSTAR/Liberia

Market competition can offer benefits such as improved pricing, options, service points and coverage. This is no less true among mobile financial service providers. For example, since mobile financial services launched six years ago in Bangladesh, the dominant provider, bKash, has lead the pack with over 24 million subscribers but over 10 banks and additional third party providers also contribute to the market. In Tanzania, M-Pesa entered the market in 2009 and still holds the highest market share at 42 percent, but there are now five competitors driving development of the digital financial services ecosystem.

Compared to counterparts in East Africa, Liberia is relatively new to mobile money. Lonestar MTN, one of the largest mobile network operators (MNO) in Liberia, debuted their mobile money product in 2011. Orange Money, the only other mobile money provider (formerly Cellcom’s Smile Mobile Money), launched in February 2016 and has since expanded from Monrovia to 13 of 15 counties. Combined, the two providers have over 1.6 million subscribers. For a nation of 4.6 million, mobile money has shown significant growth. IMG_1772

While Liberians use mobile money primarily for person to person transfers (P2P), the Mobile Solutions Technical Assistance and Research (mSTAR) project supports the Government of Liberia in offering government to person (G2P) payments. mSTAR assists the Ministry of Education and Ministry of Health in rolling out mobile money payments to civil servants on a county-by-county basis. To date, 2,544 Education staff and 803 Health staff enrolled in this option in 12 counties.

In Liberia, financial inclusion is challenged by factors such as banks that are often difficult to access. Wire transfer fees to send money to family across the country that are prohibitively high. Mobile money attracts customers by avoiding these challenges. Customers can send and receive money on their phone and cash it out at a nearby agent for a small fee while avoiding poor roads to the bank, system outages and long lines.

Despite mobile money’s many benefits, the system is not without its flaws. While Liberia’s capital city, Monrovia, experiences fewer issues, other cities and especially rural areas find challenges that include a lack of cellular connectivity (a mobile transfer is of little use if the phone cannot connect to send/receive) and liquidity shortages (mobile money requires that the agent has enough cash on hand to pay the customer.) These issues are exacerbated by power shortages and underdeveloped infrastructure such as bad roads, some of which are unnavigable during the April-November rainy season, which constrains liquidity. Liberia is a nascent mobile money market with a very recent second entrant. The market is becoming competitive but competition has not yet taken off and incentives to drive product, service and price improvements are still limited.

While cellular coverage is similar between Lonestar and Orange throughout the country there are also areas only covered by one provider where users often have one SIM rather than one for each, as is common in well-covered areas. This has been difficult for G2P payments rollout because the GOL has only offered civil servant salary payments with Lonestar since Orange did not have the national presence required to participate. Civil servants who want to switch to mobile money payments but live in areas without Lonestar coverage frequently complained about the lack of options. To address this problem, in November 2017 the GOL officially brought Orange in as a second provider authorized to transmit government salary payments. This is celebratory news for civil servants and the development of Liberia’s digital financial services ecosystem.

…in November 2017 the GOL officially brought Orange in as a second provider authorized to transmit government salary payments.

At the start of the salary payment program, mSTAR supported the GOL in facilitation of negotiations and development of two Memoranda of Understanding with Lonestar which allowed the GOL to offer Lonestar mobile money as a payment option. In the same vein, mSTAR has worked with the GOL to come to a similar agreement with Orange. mSTAR has provided data used in decision making and technical support to conceptualize rollout of mobile money salary payments. The new Orange MOU will allow market competition for G2P salary payments for civil servants.

An increase in service providers and market competition will benefit civil servants who will be enabled to select their provider of choice. The competition should drive down prices and increase service points. It can be expected that as service improves, mobile money will be an option for more Liberians and mobile money agents will have a larger customer base. Competition can move to different aspects of service delivery beyond network coverage and pricing, such as payment product integration and user friendliness, innovation around new financial products and services to promote financial inclusion and value-added services such as market and weather information and health messaging.

Competition, as seen in other digital financial service markets like Bangladesh and Tanzania, is integral to growth and the launch of additional financial opportunities. Will competition in Liberia result in new and diverse products? Additional market entrants? Effective interoperability? Broader financial inclusion for the 72 percent still unbanked adult population? There is optimism that this is what the future could bring. In the short-term it is apparent that Liberia is headed in the right direction.

Erica Bustinza is the Chief of Party of mSTAR activities in Liberia. She has worked in development for over 10 years in various geographic regions and sectors, primarily focused on access to finance, economic development and technology integration.

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Why Are Women Less Likely to Own a Phone?

This blog was originally posted on NetHope’s blog.  To read the original, click here. 

By Katie Highet, Technical Advisor, mSTAR, FHI 360 and Jonathan Dolan, Digital Inclusion Team Lead, U.S. Global Development Lab, USAID

Much has been written about the gender gap in mobile phone usage, specifically on why women are less likely to have access to this technology than men; why women are less likely to be technically literate than men; and why women are less likely to be aware of the many potential benefits of a mobile phone. We recognize that there is a gender gap, as high as 38 percent in South Asia. Within the development community, there is no disagreement that this digital gender divide needs to be addressed in order to drive women’s economic empowerment and ensure a more equitable future. However, there are varying points of view on how to close this gap.

While there is no magic formula that can close this gap, it is clear that before we look to balance digital access and adoption for women, we need to understand the underlying reasons for the divide. For instance, Sub-Saharan Africa might have a 13percent gender gap, but that statistic is not indicative of every community across the continent. Continent-wide averages actually mask significant variance between different countries, ranging from 8 percent in Kenya to 45 percent in Niger.

In order to understand the digital gender divide, we cannot depend on regional, country or even state averages. Instead, we must know how people interact with technology at a community level. Recognizing this, USAID commissioned the Gender and ICT Survey Toolkit to address the lack of gender disaggregated data at the sub-national level. The Toolkit facilitates the collection of gender disaggregated information with a series of resources, including survey questions, focus group discussion guides and technical competence tests, as well as instruction on research design and data sorting. Breaking the findings down into key themes such as control, social norms and digital literacy allows the user to understand the specific barriers at play at a sub-national level, and how to address them.

If development practitioners don’t understand the shape and size of the digital gender gap, how can we expect to effectively drive change? Over the next few months, we will be rolling out the Gender and ICT Survey Toolkit to our USAID colleagues, and training partners and peers across development organizations in-person and with online webinars and workshops, to improve data collection on the digital gender divide.

With the Gender and ICT Survey Toolkit, we recognize that every community is unique and when we better understand gender dynamics, we can address the gaps effectively and respectfully. Through this resource, we hope to enable a more data-driven approach to ICT4D implementation, and in doing so, helping to close the digital gender divide.

A Rapidly Growing DFS Market: What mSTAR Accomplished in Bangladesh

As mSTAR’s project in Bangladesh comes to a close this fall, mSTAR/Bangladesh staff write on their perspectives from four years of a successful project, where mSTAR/Bangladesh helped enroll over 25,000 individuals—most of whom are women—into digital financial service accounts and helped USAID IPs and beneficiaries transact around $2.2 million digitally. The activity brought two new financial products to market with Bank Asia and IFIC Bank, including micro-credit to farmers with lower interest rates and more favorable repayment terms than any other alternative on the market today. Through this effort, mSTAR/Bangladesh facilitated loan disbursements to more than 1,500 farmers to date, with more on the way.  Check out our four-year retrospective infographic here!

By Josh Woodard, Regional ICT & Digital Advisor

When mSTAR first started activities in Bangladesh in September 2013, the mobile financial services (MFS) market was still in its relative infancy, having only launched less than two years prior. At that time, it was very much a domestic remittance service with people using MFS to send money to friends and family elsewhere in the country, much of which was done through unofficial over-the-counter services rather than individual mobile wallets.

Between September 2013 and June 2017:

  • The number of registered mobile wallets grew more than five-fold
  • Active wallets increased more than seven times
  • Average daily MFS transactions grew by almost six-fold.

Source: Bangladesh Bank

Our initial mandate in Bangladesh was to help USAID’s implementing partners digitize their payments, so that implementing partners no longer needed to send people with backpacks full of cash from Dhaka to pay field expenses, such as training allowances. Bangladesh was in some ways an initial testing ground for USAID’s move away from cash in its programming, codified in its Procurement Executive’s Bulletin from August 2014, making electronic payments the new default for USAID awards.

We demonstrated success early on helping two USAID projects transition to mobile payments through a small grants program. The Aquaculture for Income and Nutrition project ended up saving the equivalent of around 600 person days per year in efficiency gains by eliminating cash for training allowances. Digitizing payments for Dnet’s Aponjon initiative reduced processing times to pay their health workers from 30 to 8 days, greatly increasing employee satisfaction.

These benefits inspired other USAID implementing partners to explore transitioning away from cash without grant support from mSTAR. Through a mix of technical assistance and trainings, mSTAR supported 40 USAID programs to better understand digital financial services (DFS), including MFS and agent banking. Through our awareness raising activities over the past four years, we developed more than 70 learning documents and trained close to 600 people on DFS. In total, USAID programs receiving mSTAR support transacted more than $2.2 million, including transactions made to and by their beneficiaries, which numbered more than 25,000 individuals, two-thirds of whom were female.

BangladeshGIF

In 2014, to encourage greater focus on the needs of the financially excluded and underserved, we launched the Mobile Money Consultative Group (MMCG), which promotes dialogue and partnerships and was modeled on previous work done by FHI 360 in Malawi. Over the past three years, the MMCG grew to include dozens of members from the development, telecommunications and financial services sectors, eventually adopting the name Digital Finance Consultative Group to better capture its broader membership base. It was so valued that in anticipation of mSTAR’s closing, members transitioned the group to a new coordinator, UNCDF, which recently hosted the first meeting independently of mSTAR.

As the market grew, mSTAR played a crucial role in ensuring that DFS providers were considering the financial needs of Bangladesh’s millions of financially excluded individuals, many of whom are supported by USAID’s programming in country. We began conducting assessments looking at opportunities for digitizing transactions and expanding DFS offerings, including examinations of saving groups, agricultural value chains, and agricultural mechanization. These have already contributed to the deployment of two digitally-enabled micro-credit products for smallholder farmers, the first-of-their-kind in Bangladesh, as well as modifications to the pricing structure and product offerings of several other providers.

It is refreshing to see that the DFS sector in Bangladesh is finally moving past the pure domestic remittances model to a increasingly holistic one that more broadly meets the financial needs of Bangladeshis—although it still has a distance to travel. In some ways, it is bittersweet to have to end our work in Bangladesh right when the DFS market seems to be picking up momentum. However, I am proud of the contributions we have made to promote inclusive DFS growth in Bangladesh. I am hopeful that our objectives over the past four years will continue to be realized by other actors in the DFS ecosystem we played a small role in shaping.

Josh Woodard is a Regional ICT & Digital Advisor for FHI 360, based out of its regional office in Bangkok, Thailand. He has provided technical oversight to the mSTAR team in Bangladesh since the beginning of implementation in 2013. In addition to the mSTAR blog, he occasionally shares his perspectives on digital technology and development on LinkedIn.

From Farm to Phone to Table: A Case Study Series Explores the Impact of Digital Tools on Agriculture

This post is excerpted from a monthly theme series from NextBillion focusing on agriculture during the month of September. It was authored by Cristina Manfre, senior associate with Cultural Practice LLC, and Christopher Burns, senior coordinator, digital development for Feed the Future at USAID.

Over the past 10 years, and particularly over the past five, the use of mobile phones and internet-enabled, digital tools in farming activities has skyrocketed. Today, the smartphone or tablet is no longer seen just in the developed world; at least one mobile phone now sits in the pockets or hands of over 60 percent of the population in the developing world. Coupled with the increased spread of 3G and 4G connectivity, and the growing presence of mobile money products, low-cost sensors, geospatial visualization and machine learning, what has emerged is a broad set of digitally based applications that have driven greater financial inclusion, more precision agriculture, better data collection and analytics, and more effective information dissemination. Agricultural organizations are increasingly embracing these tools to better provide for the welfare of the communities they serve.

The U.S. Agency for International Development, through the U.S. Global Development Lab and the Bureau for Food Security, is working to demonstrate that digital tools and approaches can improve cost-effectiveness and better development outcomes in food security and nutrition programs. As part of this effort, USAID is launching a case study series to highlight different approaches to digital tool adoption and how these tools are impacting organizational culture, operations and programming.

The series profiles different organizations, from social enterprises to non-governmental organizations and traditional private businesses across a number of regions, from sub-Saharan Africa to Latin America to South and Southeast Asia. Greater attention is being given to Feed the Future (the U.S. government’s global hunger and food security initiative) countries and the newly released target countries under the Global Food Security Strategy. Most organizations and projects being showcased have received some form of USAID assistance.

Read the full blog here and learn how digital tools are being used to enhance development outcomes in food security & nutrition programs.  


Photo Credit: Morgana Wingard for USAID

 

Want DFS Uptake? Do Feasibility Assessments – PERSPECTIVES FROM MSTAR/BANGLADESH

As mSTAR’s project in Bangladesh comes to a close this fall, mSTAR/Bangladesh staff write on their perspectives from four years of a successful project, where mSTAR/Bangladesh helped enroll over 24,000 individuals—most of whom are women—into digital financial service accounts and helped USAID IPs and beneficiaries transact around $1.83 million digitally. The activity brought two new financial products to market with Bank Asia and IFIC Bank, including micro-credit to farmers with lower interest rates and more favorable repayment terms than any other alternative on the market today. Through this effort, mSTAR/Bangladesh facilitated loan disbursement to 795 farmers. Both banks are interested in scaling up these efforts.  

By Tajmary Akter, mSTAR/Bangladesh Technical Specialist

At mSTAR/Bangladesh, we have found that digital financial service (DFS) feasibility assessments are an excellent method to accelerate DFS uptake. When determining digital financial service feasibility, assessments are integral to understanding and analyzing context. They provide insights to understanding community needs, challenges, opportunities and potential action and are proven to be an effective method for learning and evaluation.

In the Bangladesh context, the DFS market is dominated by mobile financial services, especially person-to-person money transfers; other usage options have not yet reached a significant portion of the unbanked, low income and rural communities. mSTAR/Bangladesh has conducted several assessments since 2013 to understand this and explore opportunities for DFS integration in development working areas, especially health and agriculture.

As a member of the mSTAR/Bangladesh team, I was able to take part in several assessments addressing some of the following objectives:

  • Mapping the existing transaction patterns among key actors of relevant value chains and analyzing existing rules and regulation (e.g. government regulation for mobile money).
  • Identifying the constraints or root causes that explain why DFS is currently not being adopted among unbanked, rural and low-income populations.
  • Identifying opportunities based on assessment findings to troubleshoot existing challenges and accelerate DFS in the broader context.

The assessment findings significantly contribute to troubleshooting challenges by identifying community needs. For example, from learnings identified in assessments, our team was able to contribute to the design and execution of two DFS innovations targeting smallholder farmers and businessmen in rural communities:

  1. A card-based micro-credit facility through agent banking with Bank Asia, in partnership with the USAID Agricultural Extension Support Activity.
  2. An agri-credit facility through mobile bank accounts with the IFIC Bank, in partnership with the USAID Rice Value Chain activity.

Assessments have the potential to help drive DFS innovation by analyzing opportunities in existing transaction channels like our team did in an agriculture value chain assessment in February 2017. This kind of assessment not only explores opportunities at the local community level but also at the organizational level. The assessment showed that adopting DFS in a suitable way could offer an organization’s increased operational efficiency by saving time, resources and costs. Another recently published assessment conducted by the mSTAR/Bangladesh team determines DFS feasibility in agricultural mechanization value chains.

Through different assessments, our team has been able to provide insights and recommendations for why, what and how DFS may integrate efficiently into different sectors. Through these efforts, we have been able to support our overall goal of supporting, building and accelerating the DFS ecosystem in an effective manner in Bangladesh.

For the full list of assessments completed under mSTAR/Bangladesh, see the Technical Reports section on this webpage.

Tajmary Akter has been a technical specialist with mSTAR/Bangladesh since September 2016. She has experience working with agriculture, nutrition, livelihoods and market development programs with an expertise on gender issues. She completed her Masters in Anthropology and has worked as a development professional for more than eight years.

A Holistic Approach Leads 3,100 Farmers to Register for DFS Initiatives -PERSPECTIVES FROM MSTAR/BANGLADESH

As mSTAR’s project in Bangladesh comes to a close this fall, mSTAR/Bangladesh staff write on their perspectives from four years of a successful project, where mSTAR/Bangladesh helped enroll over 24,000 individuals—most of whom are women—into digital financial service accounts and helped USAID IPs and beneficiaries transact around $1.83 million digitally. The activity brought two new financial products to market with Bank Asia and IFIC Bank, including micro-credit to farmers with lower interest rates and more favorable repayment terms than any other alternative on the market today. Through this effort, mSTAR/Bangladesh facilitated loan disbursement to 795 farmers. Both banks are interested in scaling up these efforts.  

By Md. Majidul Haque, mSTAR/Bangladesh Technical Lead for Digital Financial Services

Digital financial services (DFS) are playing a key role in achieving financial inclusion objectives worldwide, and Bangladesh is no different from global trends.

The mSTAR/Bangladesh team has been working in the DFS space in Bangladesh since September 2013 and has seen firsthand the phenomenal growth in DFS adoption, particularly mobile financial services (MFS), in the country over the last couple of years.

While the adoption of DFS has increased rapidly, barriers to DFS uptake remains a concern for traditionally marginalized and financially excluded populations in Bangladesh. DFS usage in Bangladesh is mostly composed of cash-in and cash-out services, which is in part due to limited availability and awareness of additional use cases. Marginalized and financially excluded populations, however, require a wider range of financial solutions and serving them presents both unique opportunities and challenges in the design and delivery of these solutions. There is no single solution. Innovative DFS products and services are the only way to address those unmet needs.

mSTAR/Bangladesh (mSTAR/B) has helped to successfully pilot test two completely new DFS innovations (see more here and here) in Bangladesh to provide smallholder farmers with access to agricultural loans, savings, transfers and merchant payments. These pilots are the first examples to date in Bangladesh where a bank and MFIs have partnered to extend micro-credit agricultural loans to farmers. Farmers are also able to use such micro-credit to securely and easily purchase inputs from participating retailers through a digital channel, in particular through mobile phones and NFC-enabled debit cards. Farmers are now able to access micro-credit at rates less than half of what they had previously had access to and with extremely flexible re-payment terms and conditions, with repayment due in full after six months, as opposed to weekly repayments from other sources.

While implementing those DFS innovations, there were few areas where we had to give some distinct concentration to successfully support optimal results from these pilots so that these initiatives can be scaled up in future. We found the following to be particularly important in that regard.

  • Needs Assessment: A needs assessment is very important before designing and implementing any innovations through any channel, whether DFS or not. In case of the above-mentioned innovations, we conducted DFS assessments for Agricultural Value Chains (AVC) and separately Rice Value Chains (RVC) to understand the needs, capacity and aspirations of the different value chain actors.
  • Selection of DFS Provider and Target Base: Selecting a DFS provider is not always easy. DFS providers have different service offerings, pricing, interest, reach, and customer service. Successfully deciding which DFS provider is the right fit for the pilot requires planning and research. Similarly, it is also recommended to start off pilots in one or two areas on a small scale at the beginning. Learnings and experiences from such pilots can be used to design large scale transitions. For these two pilots, we partnered with Bank Asia Limited and USAID’s Agricultural Extension Support Activity (AESA) project, implemented by Dhaka Ahsania Mission (DAM), as well as IFIC Bank Limited and the USAID RVC project, implemented by IRRI/Bangladesh.
  • Product Design & Defining Service Delivery Channel: Throughout the product design process and service delivery channel identification, strong involvement of all partners is essential to shape and guide the development of product concepts. In our case, through active participation from all partners, they were able to deliver flexible micro-credit solutions tested through both mobile phones and NFC-enabled debit card for two groups of target customers.
  • Setting Pilot Goals and Expectations: It is important to set goals and expectations of the pilot, which eventually helps to determine focus, define specific measurable targets and offer motivation. Before starting these pilots, we worked with the partners to define all the parameters that should be achieved and how we would define success.
  • Coordination among Stakeholders: Synchronization between stakeholders carries a huge importance to make an initiative successful. In our pilots, all partners were very clear and agreed in writing to pilot objectives, their roles and benefits, the operating model and other relevant issues.
  • Training and Field Readiness: Providing field forces and the targeted customer base with training and capacity building on how the services work and their potential benefits are critical, as is thinking about how to communicate these messages to other relevant parties. Along with our partners, we helped to conducted several trainings and workshops before implementing those mentioned pilots.
  • Capturing Pilot Impacts: It is very important to capture impacts from pilot testing to measure whether the pilot was successful and actually met the needs of the target base, as well as to identify possibilities to scale up the initiatives. For both our pilots, we conducted pre- and post-assessments with 109 farmers, six ag-input retailers and one MFI. Based on those assessments, it appears that in addition to the better interest rates and repayment terms, the loans have also enabled farmers more flexibility in the types of inputs they purchase. Thanks to these products, farmers are no longer dependent on credit from retailers, who would often push them to buy certain products. In addition, for farmers who previously had higher interest loans with rapid repayment, these products offer more flexibility on when they can sell their crops as the flexible repayment terms enable them to sell their crops later at a higher price, rather than rushing to sell.

The mSTAR/Bangladesh team, along with all other partners, is now working to scale up those initiatives. More than 3,100 farmers and 50 ag-input retailers have already registered through these initiatives in just 10 months since they launched. While this is only a drop in the bucket of a country with more than 160 million people, we hope that these ground-breaking innovative products will serve as inspiration to catalyze a revolution in agricultural financing in Bangladesh.

Md. Majidul Haque has just under a decade of experience in the technology and financial services sectors that include telecom, banking and international development organizations with a focus on new business, product development, project management, action research and business development related to digital financial services (DFS), financial inclusion, e-commerce, payment gateway & value-added services (VAS). Majidul has successfully introduced DFS to a wide range of segments, including smallholder farmers, ag-input retailers, local government officers, community health workers, ultra-poor women, slum dwellers, ready-made garment workers and field staffs. He served as the technical lead – DFS with FHI 360 from April 2016 until July 2017.

How mSTAR Transitioned USAID IPs to DFS- PERSPECTIVES FROM MSTAR/BANGLADESH

As mSTAR’s project in Bangladesh comes to a close this fall, mSTAR/Bangladesh staff write on their perspectives from four years of a successful project, where mSTAR/Bangladesh helped enroll over 24,000 individuals—most of whom are women—into digital financial service accounts and helped USAID IPs and beneficiaries transact around $1.83 million digitally. The activity brought two new financial products to market with Bank Asia and IFIC Bank, including micro-credit to farmers with lower interest rates and more favorable repayment terms than any other alternative on the market today. Through this effort, mSTAR/Bangladesh facilitated loan disbursement to 795 farmers. Both banks are interested in scaling up these efforts.  

By Ataur Rahman, mSTAR/Bangladesh Project Lead

For the past four years in Bangladesh, the mSTAR project has worked to completely transform USAID implementing partner (IP) payment streams. When we first started project operations in Bangladesh in 2013, we found that almost all project expenditures in Bangladesh at the field level were being done in cash. This is not that surprising. Cash is the most widely accepted form of payment across Bangladesh. InterMedia’s Financial Inclusion Insights found that 67 percent of Bangladeshis have yet to adopt DFS. But cash is risky and can be expensive, in terms of travel and staff costs needed to transport it around. Our job was to help show IPs the benefit of digitizing those transactions and supporting them to do so.

To date, mSTAR/Bangladesh has helped enroll over 24, 000 individuals—a majority of whom are women—into digital financial service accounts and helped USAID IPs and their beneficiaries transact just over US $2 million digitally. Since transitioning to digital payments, IPs like WorldFish realized annual savings of US $19,150 and reduced the administrative burden on technical staff by 600 days annually. Another IP, Dnet, saved the equivalent of 20 full-time staff per year in reduced administrative tasks while realizing an annual benefit of around US $60,900.

Here’s how we’ve transitioned these IPs and saved them valuable time and money.

The first step we take when digitizing payment streams is fully assessing the need or use of payments by understanding the beneficiaries of a project and the project itself. Through direct conversations with project staff and beneficiaries, we have found that while most program staff own mobile phones and are aware of mobile money, most don’t use it. Those who are adoptees only use basic products and services, such as personal transfers. This is because they are often broadly unaware of the intricacies of digital financial services (DFS), such as mobile financial services and agent banking products, and therefore lack trust in them.

Our conversations with projects made it clear that awareness is key. By increasing DFS-specific knowledge, we find that projects immediately recognize the benefits and are keen to adopt. While some organizations are trying to increase the uptake of DFS by increasing their knowledge and capacity to use DFS products, more effort and engagement is required. To this end, the mSTAR team in Bangladesh has focused its energy on increasing DFS-specific awareness among USAID-funded project staff and beneficiaries.

We provided hands-on training directly and through partner organizations to interested projects to promote DFS products among groups that previously had little access to such information. Group work in workshops and discussions identified potential gaps and established methods to overcome challenges. These workshops targeted each level of an IP, from project leads and finance staff, to program staff, frontline managers and beneficiaries, so that we could tackle every link in the IP value chain.

We found that it is important to include all levels of staff in the process to grapple with challenges throughout the management structure. A top-down approach often excludes practical field realities from the conversation, although DFS can’t be implemented without interest and buy-in from top management.

At mSTAR/Bangladesh, we have found that knowledge is power. An informed person is more likely to adopt DFS as compared to a person who is unaware of DFS and its potential. This reflects the need to better promote DFS products and their associated benefits in a language that can be easily understood by those who may find it difficult to differentiate between myths and facts. In our first year and a half, mSTAR/Bangladesh primarily reached out only to development projects but with time, we began to engage with donor agencies, DFS providers and regulators to identify gaps and to come up with realistic solutions. mSTAR/Bangladesh believes that access to formal financial services is not a luxury but a basic need for all—and awareness raising is one of the tools that can help inform stakeholders of the ways forward to achieving this goal.

 Ataur Rahman has been the project team lead for mSTAR in Bangladesh since its second week of implementation in October 2013. Prior to joining mSTAR, he was the head of outreach at Dnet for the Mobile Alliance for Maternal Action (MAMA) Bangladesh Initiative where he helped to design and implement mobile value added services and pilot the use of mobile money within the program. Before that he worked for the Bangladeshi government’s Access to Information (A2I) program led by Prime Minister’s Office funded by UNDP and the Bangladesh Telecentre Network (BTN), a collision of ICT4D initiatives secretariats.

Can dialogue lead to DFS uptake? – PERSPECTIVES FROM MSTAR/BANGLADESH

As mSTAR’s project in Bangladesh comes to a close this fall, mSTAR/Bangladesh staff write on their perspectives from four years of a successful project, where mSTAR/Bangladesh helped enroll over 24,000 individuals—most of whom are women—into digital financial service accounts and helped USAID IPs and beneficiaries transact around $1.83 million digitally. The activity brought two new financial products to market with Bank Asia and IFIC Bank, including micro-credit to farmers with lower interest rates and more favorable repayment terms than any other alternative on the market today. Through this effort, mSTAR/Bangladesh facilitated loan disbursement to 795 farmers. Both banks are interested in scaling up these efforts.  

By Tasnuba Sinha, mSTAR/Bangladesh Digital Financial Services Associate

In a world where we want to make an impact across borders, cultures, viewpoints and motivations, dialogues such as stakeholders’ meetings, conferences, formal network gatherings and seminars play an integral role. Dialogues like these allow for networking and relationship building, for role models to inspire next generation change makers, and for the exchange of experiences.

mSTAR/Bangladesh recognizes the potential and the importance of dialogue facilitation and has organized 11 dialogue facilitation programs in Bangladesh over the past four years. I have been fortunate enough to be a part of mSTAR/Bangladesh and have organized numerous events over the past 11 months including Mobile Money Consultative Group meetings, a Financial Inclusion Week Event and an Agricultural Value Chain Insights: Opportunities in Bangladesh report launching event.

In the last few years, our team at mSTAR/Bangladesh has built a strong local and international network of representatives from development organizations, donor agencies, digital financial services (DFS) providers, mobile network operators, technology solution providers, insurance companies and regulatory bodies – people who are doers and makers, who believe what we believe: that Bangladesh has all the potential in the world. Without this community, our work in supporting acceleration and adoption of digital payments would not be possible.

The first Mobile Money Consultative Group (MMCG) meeting was first held in August 2014 and ever since then, it has successfully created a community of passionate individuals who believe in the benefits of using digital financial services and ultimately building an inclusive digital ecosystem where all segments of society have access to formal financial services, particularly those at the bottom of the pyramid. MMCG provided a platform for change makers to come together and discuss challenges and innovative solutions. Held quarterly, the MMCG has been covering various issues from the importance of financial literacy to the need for innovation in mobile financial services products. Furthermore, several digital financial service providers have expressed many times during the meetings that they see all the challenges as an opportunity for them to develop their products in such a way that the challenges can be eliminated. Most importantly, our team believes in promoting collaboration, trust and community – the tenets of a strong digital financial ecosystem and after successfully conducting nine MMCG meetings, we can say that is what we have attained.

Another major event that mSTAR/Bangladesh (mSTAR/B) has hosted that I am particularly proud of is the Financial Inclusion Week event in October 2016. Aligning with the global theme ‘Keeping Clients First in a Digital World,’ mSTAR/B hosed an event entitled ‘Increasing the Uptake of Formal Financial Services through a Client-Centric Approach.’ The event successfully explored how different actors, from development organizations, to financial service providers, to government programs, have supported the development, promotion and uptake of digital financial services in Bangladesh. mSTAR/B was one of the very few organizations who took part in this global conversation. The modality of the workshop was designed in such a way that it provided the participants to perform a lively, interactive discussion where they explored scenarios reflecting existing needs, barriers to accessing formal financial services in Bangladesh and the actions and steps required to further accelerate financial inclusion.

The core purpose behind hosting any dialogue facilitation is to help people connect. Dialogues give organizations opportunities to see what other people are working on and understand challenges, and the need to develop new innovative products that would benefit all segments of the population. For us, that was the main objective. We aimed to provide such platforms that would help a development organization connect with a DFS provider or other development organization and inspire individuals to think of building the ecosystem through collaboration.

Tasnuba Sinha has been with mSTAR/Bangladesh since August 2016. During that time, she organized five events promoting dialogue facilitation. She has always been passionate about working in the development sector and graduated with a degree in Economics. Prior to mSTAR/Bangladesh, Tasnuba worked at a tech startup in Bangladesh.

More Awareness-Raising Activities Are Needed to Increase Use of DFS – Perspectives from mSTAR/Bangladesh

As mSTAR’s project in Bangladesh comes to a close this fall, mSTAR/Bangladesh staff write about their perspectives from four years of a successful project, where mSTAR/Bangladesh helped enroll over 24,000 individuals—most of whom are women—into digital financial service accounts and helped USAID IPs and beneficiaries transact around $1.83 million digitally. The activity brought two new financial products to market with Bank Asia and IFIC Bank, including micro-credit to farmers with lower interest rates and more favorable repayment terms than any other alternative on the market today. Through this effort, mSTAR/Bangladesh facilitated loan disbursement to 795 farmers. Both banks are interested in scaling up these efforts.  

By Kazi Amit Imran, mSTAR/Bangladesh Communications Specialist

“We do not have any scope to adopt digital financial services in our project” – this is exactly how many development projects react when they hear about digital financial services (DFS) for the first time. Even though USAID has mandated the use of digital payments as the default method for its implementing partners since 2014, lack of technical knowledge and misunderstanding about what is required to use DFS still holds back many projects. One of the key components holding back DFS adoption is lack of awareness, both among the general population and development organizations whose programs support them. This is in part why many Bangladeshis—and development organizations—are unaware of and often hesitant to try DFS products.

The reality in Bangladesh is that the majority of the rural population still uses cash to make financial transactions. This segment is often broadly unaware of the intricacies of DFS products, and therefore can lack trust in them. While some organizations are trying to increase the uptake of DFS by increasing their knowledge and capacity to use DFS products, more effort and engagement is required. Even years after their introduction to Bangladesh, many people are still unaware of DFS, such as mobile financial services and agent banking products.

The importance of increasing DFS-specific knowledge is crucial for spurring adoption, and the benefits that come from having access to formal financial services. Over the past four years, the mSTAR activity in Bangladesh has focused on increasing DFS-specific awareness among USAID-funded project staff and beneficiaries, particularly through publications, blog posts, videos, and other multimedia content. We developed different kinds learning documents targeting different audiences including project leads, finance staff, program staff, frontline managers and beneficiaries. mSTAR/Bangladesh’s approach to awareness raising was very much focused on tailoring content to appeal to and meet the needs of specific audiences.

Early on, many USAID-funded implementing partners (IPs) were hesitant to use DFS often due to a lack of awareness and capacity, although with technical support from mSTAR/Bangladesh that began to change. By documenting and sharing the learnings from these early adopters, we were able to convince other USAID IPs to consider the potential benefits of DFS to help them enhance operational efficiency and better achieve their development objectives.

Though it varies from context to context, we’ve found that sharing success stories of beneficiaries and infographics, in particular, have had a dramatic impact on influencing IPs to consider DFS. The success stories validate the benefits and the changes that DFS adoption brings about to individuals’ lives, as well as to IPs at an organizational level. The infographics, meanwhile, helped them to very easily visualize the benefits from transitioning to DFS, such as this one, which captured the impact using DFS had on achieving project objectives. Meanwhile, our infosheets have brought about price transparency in the DFS market in Bangladesh for the first time. Prior to our creation of the first Mobile Money Infosheet in 2014, it was not possible to find information on corporate pricing on any of the mobile financial service (MFS) providers websites. Once we started putting their prices and service offerings side by side, they took notice. bKash, for example, the country’s largest MFS provider waived their disbursement fees for all USAID projects and also reduced their cash out fees for recipients of payments from USAID projects from 1.85 percent to 1 percent.

At mSTAR/Bangladesh, we have seen that an informed person is more likely to adopt DFS compared to a person who is unaware of DFS and its potential. This reflects the need to better promote DFS products and their associated benefits in a language that can be easily understood by the intended audience.

You can view all of our learning documents online here.

Kazi Amit Imran served as the Communications Specialist for mSTAR/Bangladesh from May 2014 to May 2017. Prior to this he served as a Communications Manager at BRAC. He has a masters degree in development studies and business administration.

Digital Development for Feed the Future: Will Digital Technology Work For or Against Small Farmers?

This post is excerpted from the second blog post in a two-part Agrilinks series focusing on data-driven agricultural development. It was authored by Brian King, Digital Development Advisor for Digital Development for Feed the Future, USAID and Peter Richards, Economic Advisor, Bureau for Food Security, USAID.

Global agricultural development is in a period of digital transition. Advancements in earth science, computational power, geospatial analysis and data communications systems have made it possible to assess yields from space, predict and manage economic or climatic shocks, and improve the precision and profitability of agricultural production. The models for realizing the full benefits of this transformation are still emerging. This has wide-reaching implications for agriculture development. Will digital technologies follow well-worn paths of agriculture innovation? Will they prove disruptive or beneficial for small farmers in developing economies?

The Technology Treadmill

Over fifty years ago, the economist Willard Cochrane described adoption of agricultural innovations as a “treadmill,” wherein technologies such as mechanization, hybrid seeds and chemical inputs helped increase productivity. However, when the resulting increases in food supply drove down market prices, farmers were forced to keep adopting new technologies to increase efficiency, only to maintain about the same farm income. Most farmers — particularly small farmers — weren’t getting ahead. When Cochrane wrote of the treadmill decades later in the 1990s, he found that his treadmill had been a force for farm consolidation. Many of the smaller, less productive or less efficient farmers ended up falling off the treadmill.

Small Farmers, Digital Tools

As use of digital tools expands in farming systems in developing economies, it is worth reflecting on what these new technologies will mean for small farmers. If the spread of these innovations follows similar patterns as those of previous waves, it could mean yet another challenge to small farmers’ livelihoods. Yet there are a few signals that digital solutions might also help small farmers even the score.

Here are some key indicators:

Increasing Access to Inputs

Access to the right inputs at the right places and times has long been a challenge for small farmers in developing regions who may find themselves isolated due to poor quality infrastructure or weak linkages with input supply chains. Even where inputs are accessible, distributing them in small packages implies additional costs. Digital tools, however, can help aggregate smallholder demand and enable innovative approaches to financing to get around these constraints. Similarly, some models from the sharing economy are showing promise for improving access to on-demand transport and mechanization.

Precision in Production

New digital tools can have a big impact on small farmer efficiency. For example, access to cell phones enables even poor, rural farmers to access good guidance over interactive voice response or low-cost video, with demonstrated improvements in production. There are early successes in improving the timeliness and site-specificity of farm guidance over digital channels, such as linking SMS text messages with crop models. The near ubiquity of mobile phone services in developing economies makes it possible to deploy sensor technologies for more precise, data-driven production. These new digital channels are building true interactivity with small farmers in ways that were not possible just a few years ago, enabling farmers and farm advisors to track crop progress, plan activities and identify new solutions or opportunities.

Read the full blog here and learn about finding a vent for surplus for smallholders, and hacking the technology treadmill.


Digital Development for Feed the Future is a collaboration between USAID’s Global Development Lab and the Bureau for Food Security and is focused on integrating a suite of coordinated digital tools and technologies into Feed the Future activities to accelerate agriculture-led economic growth and improved nutrition.  

For more information on Digital Development for Feed the Future’s work on data-driven agricultural development, please read the Key Findings Report from the Innovation for Data-Driven Agriculture convening in April 2017. 

Photo credit: Bobby Neptune for USAID