100s of Youths are Using Tech to Connect Farmers to Resources – This 2017 Digi Winner is Building Opportunities in Uganda

We’re taking a behind-the-scenes look at the 2017 Digi winners. 2017 winner Feed the Future’s Uganda Commodity Production and Marketing Activity created EzyAgric, a massively successful digital platform which opened doors for both unemployed youth and smallholder farmers. Formerly unemployed youth are trained and serve as agents on the platform, helping farmers gain access to information and finances, increasing their production and resilience. EzyAgric’s results have been transformative, from empowering youth with tech skills to connecting farmers with deeply-needed resources. This interview was conducted with Robert Anyang, Chief of Party of the Commodity Production and Marketing Activity. Apply for the 2018 Digi Awards here by July 13th!

Q: What’s the project?

Robert Anyang (RA): Without access to formal financial services or transparent market information, smallholder farmers in Uganda struggle to obtain high quality inputs and agricultural financing. With support from the ag-tech start up Akorion, Feed the Future Uganda’s Commodity Production and Marketing Activity (CPM) developed a platform called EzyAgric for village agents to collect information on a farm’s location, soil properties and production activities, creating a digital profile to help farmers gain access to financial products and services. Since the pilot in 2014, CPM has exceeded most of its targets. The activity has profiled 130,253 farmers, allowing them to access more than $59 million in loans for crop production, creating employment opportunities for over 700 youth as village agents, enrolling thousands of farmers in crop insurance and providing more than 400,000 farmers with access to market information.

 

Q: What’s the local impact?

RA: 28-year-old Shallot Asimire was just an ordinary jobless young woman out of school doing regular home chores. Shallot was introduced to us through a colleague. We trained her in using various ICT applications and equipped her with a smartphone, which she used to start providing agricultural services to coffee farmers through EzyAgric. Shallot now earns over $4,000 per year and assists her husband.

Q: What surprised you most throughout the process of creating and implementing the tool?

RA: I was surprised by the quick uptake by some farmers and the government’s interest to build a similar project in the same line cutting across the whole country.

Q: What would you say to other projects to encourage them to use digital tools?

RA: I would encourage other projects to build sustainable innovations. Work with agile and self-driven youth to create an enabling environment to build innovations that are easily adaptable by the private sector.

Q: What does being a Digi winner mean to you?EzyAgric2

RA: The most important meaning of this to me is the deep knowing that I made a difference for others: seeing a group of youth grow a multi-billion company reaching out to more youth and farmers.

mSTAR and USAID developed videos of each winner, viewable here. All USAID projects and activities are invited apply to the 2018 Digi Awards.  

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Learning from Ebola: How Mobile Money Can Prevent Health Crises

By Jonathan Kourgialis, Program Officer

mSTAR/Liberia ended activities in May 2018 after enrolling 4,870 civil servants across Liberia into mobile salary payments and successfully handing the mobile salary payment program over to the government. This post is part of a summer blog series on mSTAR/Liberia: what went well and why, how we overcame challenges, and lessons for the future. We’re writing from a management angle, monitoring and evaluation angle, a communications angle and a digital financial services angle. 

The Ebola outbreak hit Liberia hard. From 2014 to 2016, there were 10,678 cases and 4,810 lives claimed. Weakened from a protracted civil war, Liberia’s healthcare system struggled to keep up with the epidemic. Failures in the health system created severe consequences on the ground. One of those failures, with dire ramifications, revolved around payments.

As the Ebola outbreak raged, the Government of Liberia and partners introduced new financial incentives to compensate frontline health workers for the severe risks encountered when combatting the disease. However, the government and its partners were not able to transfer these new payments reliably to frontline staff, who were often placed in remote areas with limited access to banks. The government and its partners relied on cash, which was disbursed throughout Liberia by “pay teams,” who drove cash to rural towns. A pile of factors including quarantines, poor road and banking infrastructure amidst the ongoing crisis, low liquidity, and fear of the disease made pay teams inefficient and slow. Delays in the disbursement of payments contributed to health worker strikes, further crippling response efforts. The difficulties in making payments and the ensuing health workers’ discontent highlighted the critical role that efficient payment processes play in mobilizing health workers during a health emergency.

ClinicLofa

A clinic in Lofa County, Liberia, one of the first counties in Liberia hit with Ebola.

To avoid the recurrence of a payment breakdown like this, mSTAR worked with the Government of Liberia’s Ministry of Health (MOH) to build a set of standard operating procedures (SOPs) for payments to health workers through mobile money. When working efficiently and smoothly, mobile money has proven to make a significant impact on health crisis outcomes. At the height of the Ebola crisis in Sierra Leone, for example, the digitization of salary payments is estimated to have saved 2,000 lives in Sierra Leone by eliminating strikes by unpaid response workers. This is estimated to have saved almost $11 million in security and other costs related to moving cash. The SOPs mSTAR created for the MOH ensure the MOH’s payment functions will be strong enough that if a future emergency occurred, whether it was Ebola or another epidemic, health workers at the frontline would be compensated for their contributions and willing to stay on the job.

CarClaraKMallah_GrandGedeh

Navigating rural Liberia’s roads.

To create the SOPs, mSTAR first mapped MOH’s complicated payment types, systems, and streams. This included salaries paid to MOH employees through traditional government payment systems, incentive payments to contract workers paid directly by the MOH, and allowances to health workers paid directly by the MOH, each differentiated by funding stream. MOH staff are paid through funds from the GOL and funds from donors, so systems and streams are unconnected and not interoperable. Taking this into account, and utilizing mSTAR’s data systems, interoperability and mobile money expertise, mSTAR and the MOH came up with the three key tasks for the MOH to complete in the case of a health emergency:

  1. Coordinate data exchanges of staff and payment information between the MOH’s unconnected databases;
  2. Register health workers for mobile money payments within GOL systems and with the mobile money service providers (if necessary); and
  3. Disburse mobile money payments across the various payment streams.

The SOPs outline how to accomplish these tasks and graphical flows and steps breaking down each. This included recommendations on how mHero, a two-way mobile phone-based communication system, can efficiently register staff for mobile money payments and alert the MOH to mobile payment issues.

mSTAR built in recommended safeguards for the success of the SOPs such as the creation of a mobile money payments emergency committee to oversee the implementation of the SOPs during an emergency and the establishment of mobile money payment accounts specifically for MOH payment streams prior to an emergency.

While theses SOPs are tailored to the Liberian MOH’s systems, the collaborative effort to develop SOPs for the scaling of mobile money payments for health workers, or any type of emergency responder, is replicable in other contexts. It is a necessary endeavor for governments of any country vulnerable to health or natural disaster emergencies. As was seen in Liberia during Ebola, making sure that those risking their lives to save others are compensated in a timely and efficient manner is vitally important to overall emergency response efforts and is worth investing in prior to an emergency. While we hope that the Liberian MOH does not have to use these SOPs in the future, they are now prepared to pay frontline staff if the need arises again. We recommend that other governments prepare themselves in a similar manner where possible.

Jonathan Kourgialis is a Program Officer at FHI 360. He has focused on mSTAR’s work in Liberia, building and strengthening the Government of Liberia’s mobile money salary payment systems. Jonathan currently works on civil society and peace building projects.

4 Keys to Make Your Project Handover Successful, No Matter the Circumstance

By Erica Bustinza, mSTAR Project Director

mSTAR/Liberia ended activities in May 2018 after enrolling 4,870 civil servants across Liberia into mobile salary payments and successfully handing the mobile salary payment program over to the government. Over the summer we will be posting a blog series on what went well and why, how we overcame challenges, and lessons for the future. We’ll be writing from a management angle, monitoring and evaluation angle, a communications angle and a digital financial services angle. 

Project closeout is a hectic time. There’s a list of detailed tasks to accomplish, from finalizing results and lessons learned to equipment disposition. But what if closeout plans are rocked by a natural disaster? Or a financial shock? Or a government transition?

For the first time in 12 years in Liberia, a new president was elected to power. It was a peaceful transition of power that the country celebrated, but it also coincided perfectly with mSTAR/Liberia’s scheduled closeout. Charged with supporting the government to offer mobile money salary payments to civil servants, mSTAR/Liberia’s planned closeout included a comprehensive handover of intricate tasks to government leaders. However, a new administration meant that many government colleagues who supported the project were being replaced. The mSTAR team couldn’t ask the government to reschedule the transition and it was unclear if there would be enough time to ensure the new administration would fully be able to take ownership. In the last few months of the project, navigating the transition appeared daunting.

From 2016 to 2018, mSTAR/Liberia supported the government in offering mobile money as a new payment option for civil servants. Before this payment option, the only way for civil servants to receive their salary was to travel down dangerous roads to banks in distant cities where low liquidity forced them to wait, often for days. Throughout this journey, civil servants spend huge sums of money on lodging and food, in addition to missing work. With the mobile money salary payment option, however, civil servants can receive their salary on their phones. This option has saved civil servants 12 hours at work and 979 LD on average, which is roughly 7 percent of the average salary.

For two years, mSTAR worked to make this payment option a success. mSTAR built consensus with government and private sector stakeholders to enroll civil servants in the program through over 60 local events across all 15 Liberian counties. Through this work, over 4,500 civil servants enrolled in the payment program and the country’s two mobile money providers signed on to offer their services.

Yet from June 2017 all the way to March 2018, elections and the change of administration caused an all-around distraction for both mSTAR and government staff, impeding progress during key months for implementation. Fortunately, several government counterparts felt the gains that had been made and were motivated to push for activities to continue, even if at a reduced pace.

In the last six months of mSTAR/Liberia’s activities, it became clear that mSTAR’s only option for a smooth handover was to begin project transition early and involve as many relevant stakeholders as possible. As election campaigns heated up, it took several months to hold initial transition meetings, but mSTAR remained persistent. Following the inauguration in January 2018, the new administration greenlighted select mSTAR activities and the mSTAR and GOL teams sprang into action. During the final months of the project, major sustainability activities were achieved including three large-scale regional trainings for district and county staff, a high-level stakeholder sustainability meeting and a final closeout event featuring public statements of support from each key stakeholder, many of whom were from the new administration. The project not only met, but surpassed expectations.

mSTAR’s Keys to Closeout Success:

  1. Build sustainability into project design. The project built government ownership into the design. Stakeholders knew from the onset that the government would own the initiative. From the start, the mSTAR team worked towards that goal. This understanding made the eventual government transition smooth.
  2. Involve local and technical staff in key parts of implementation. mSTAR worked with the GOL technical teams rather than focusing on politically-appointed decision makers. While senior staff were replaced in the new administration, the technical teams remained. The technical teams were proud advocates of the program and obtained critical buy-in from the new administration.
  3. Create collaborative and cost-effective mechanisms. At the project onset, mSTAR and the GOL knew the GOL would not be able to sustain the large-scale enrollment events that mSTAR was supporting, so they created a separate enrollment method called “individual enrollments.” This system utilizes processes that are already in place, eliminating the need for additional funding or time-consuming new functions for overstretched rural staff.
  4. Keep energy and momentum high. The government was energized to continue scaling up the project because they saw positive results. Benefits the government saw include:
  • Staff spend less time collecting salary
  • Staff have more time on duty at health facilities and schools
  • Staff reported fewer complaints pertaining to salary issues
  • Staff experienced financial savings due to reduced transportation and other related costs when collecting salary at the bank

In light of these four keys, the importance of building ownership into the project design remains paramount. It not only prepared the project and the GOL for the transition, but also helped mSTAR reach and exceed project goals and build civil servant trust in the system. County and district staff reported that they understand the importance of their duty and that they would continue to encourage civil servants to transition to mobile money salary payments. Leadership in Monrovia said the same. “We will run with this program,” said James M. Beyan, the Director of Human Resources at the Ministry of Health, at the closeout event. James Armah Massaquoi of the Ministry of Education echoed, “We will continue the effort of mobile money. We will not allow the dream to die though the challenges seem big.”

Erica Bustinza 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. She holds a MSc in International Development from Tulane University and a BSc from Bradley University.

Playing The Right Role In Haiti’s Growing Mobile Sector: 4 Key Principles

Digital financial services have been a robust part of the development sector for over a decade and their impact continues to grow. This blog is part of a series that focuses on successful DFS projects that achieve results-driven impact in people’s lives.

By: John Jepsen, Project Director and Senior Advisor, Haiti Finance Inclusive, DAI

It’s an exciting time for mobile money expansion in Haiti. Digicel’s MonCash – Haiti’s largest mobile money deployment – has reached nearly 1 million customers and $400 million in yearly transacted value in 2017. This customer base represents a +1500 percent increase from 2015, the same year Digicel rebooted its strategy, marketing approach, product offering, and sales and training force.

Digicel has achieved these impressive results despite a generally unfavorable enabling environment for mobile money. The digital financial service sector, including mobile money, still operates under the original e-money policy that was drafted in 2010 in response to interest and significant donor investment, particularly by the Bill & Melinda Gates Foundation-funded Haiti Mobile Money Initiative and the USAID/Haiti HIFIVE project. There also have not been partnerships or active dialogue to further develop interoperable systems, shared or common agent networks, or opening of APIs to encourage fintech innovation. These results also came at a time where there was no broad digital financial services donor support or programming in Haiti. Thus, Digicel’s recent results are largely attributable to its own internal, sustained effort.

Yet despite the 1500 percent increase in MonCash clients, Haiti still has the highest un-banked population in the Latin America and Caribbean region. Even if doubling the findings from the 2014 Global Findex, Haiti would still exhibit some of the lowest financial inclusion not just in the Latin American and Caribbean region, but globally. There’s no doubt that there is still a lot of work to do in Haiti. Issues such as diversity of products that focus on including the poor, women, and marginalized populations, financial education, consumer protection and product cost and quality are not well understood. Efforts to promote DFS in Haiti and broader financial inclusion must lead to the safe delivery of a variety of financial services at affordable costs to sections of disadvantaged and low-income segments of society.

The USAID/Haiti Finance Inclusive project, which started in April 2017, is designed to promote broad-based financial inclusion, including the expansion of digital financial services in Haiti. Finance Inclusive’s activities began amidst MonCash’s rapid growth. Thus, the key question for a project like Finance Inclusive is what is the right role for it to play that does not get in the way of natural market growth. Below, I explore four key principles that drive Finance Inclusive’s strategy and specific portfolio of activities to ensure that DFS market growth actually contributes to pro-poor, inclusive economic growth objectives. Taken together, our approach mixed data-driven, evidence-based methodologies with people-based co-creation and behavior change tactics.

  1. Start with an arms-length, neutral mapping and gap analysis of the market

At the heart of Finance Inclusive’s project design is the market systems approach, which relies on contributions from the totality of the digital financial service sector’s players. A tenet of the market systems approach is to develop a deep and nuanced understanding of the macro-, meso-, and micro-levels within the DFS market. The myriad markets that affect digital financial services— commercial banking, microfinance, insurance, and mobile money all have supervisory structures, financial infrastructure, and demand and supply dynamics. As a first project activity, Finance Inclusive undertook a market system mapping to gain insights into how various market players provide, interact or view DFS offerings to gauge current trends and potential developments in the sector. This activity looked at how market players contribute to an understanding of the current DFS sector and relevant perspectives, constraints and incentives associated with sector expansion and the extent to which growth in this sector might strengthen or compliment financial inclusion efforts. From this effort, market players, functions, and regulations were clearly articulated and recommendations were defined to ensure DFS market development considers pro-poor growth dynamics. A sustained understanding of these dynamics throughout project lifetime remains critical.

  1. Develop data in partnership with market players to ensure utilization and uptake

The Finance Inclusive program seeks to develop, share, and encourage utilization of new data and insights, particularly for the demand for DFS. Demand-side interrogation is critical to developing new products and marketing, and it also supports advocacy, behavior-change communications, and financial literacy campaigns and facilitates partnering. The process to develop the data products as well as to encourage utilization of the data is equally critical. Finance Inclusive’s data development approach ensures that local stakeholders are part and parcel of the data collection efforts. Our approach also mixes a variety of data products to contribute to a more comprehensive understanding of the financial sector including through nationally-representative demand-side research such as FinScope Consumer,  consumer-centric data such as from DAI’s Frontier Insights product, gathering ethnographic insights about technology usage among target client groups; and data mapping and analytics in partnership with MixMarket through the production of a finclusion map data analytics platform designed to help users make sense of financial inclusion data.

  1. Ensure policy and regulation support takes an ‘all of government’ approach

Financial inclusion is not the purview of a single government unit. While Haiti’s Central Bank (the BRH) is responsible for the country’s National Financial Inclusion Strategy (NFIS), and it has a distinct financial inclusion unit, its mandate is cross-cutting. It works closely with several other key ministries on issues of education, identification, and sector specific investment strategies. Keeping abreast of policy and political economy issues requires engaging key government champions, maintaining positive momentum, and leveraging local, regional, and international networks and forums such as the Alliance for Financial Inclusion, of which Haiti is a member. Finance Inclusive built its project support strategy directly with the BRH NFIS team; signing a letter of cooperation within the first month of project operations. This not only allowed us to clarify our implementation plan, but it built huge credibility with the BRH NFIS team and avoids duplication of existing efforts and other donor initiatives. Finance Inclusive’s work with the BRH focuses on donor coordination, data and information, and consumer protection, all key issues to support the further development and expansion of DFS and which link to other government objectives such as shared data and education.

  1. Use co-creation with local stakeholders to achieve buy-in for change

Sustainable changes requires building the capacity of and linkages between local market actors and encouraging local ownership of interventions. Market systems approaches stimulate the conditions in which local market actors can collaborate, innovate, and adapt. Finance Inclusive uses co-creation models, creative problem solving techniques, and cross-sector collaboration activities to ensure local knowledge and capacity is not only leveraged but merging toward common vision and purpose. One of the project’s strategic initiatives was a cross-cutting co-creation event with representatives of the financial sector (banks, MFIs, credit unions, insurance companies, and mobile money providers), non-governmental organizations, and community-based organizations. The group worked together to define synthesized market constraints and targeted strategies to tackle them, which included specific recommendations and next steps for work around interoperability and shared DFS infrastructure. Together, the participants also developed a common vision and joint purpose statement to “work together to improve people’s lives and stimulate wealth creation for all through access and use of financial services by all, especially based on technology.”

Photo credit: David Rochkind, USAID

How Bundled Services Are Impacting Over A Million Smallholder Farmers

Digital financial services have been a robust part of the development sector for over a decade and their impact continues to grow. This blog is part of a series that focuses on successful DFS projects that achieve results-driven impact in people’s lives.

By: Trey Waters, Agri-Fin Mobile Director, Mercy Corps

Globally, there are an estimated 500 million farmers who earn their primary living from farming less than five acres of land. Even when these smallholder farmers grow cash crops, they often rely on subsistence production for their families, and many underproduce due to lack of access to markets, technology and financial products.

Mercy Corps’ Agri-Fin Mobile program, supported by the Swiss Agency for Development and Cooperation (SDC), partners with influential private sector actors to develop business models in Zimbabwe, Uganda and Indonesia. These business models provide farmers with financial and rural advisory services to help them increase their production and income. Agri-Fin Mobile worked with partners such as Econet, the largest mobile network operator in Zimbabwe, and TruTrade, a small startup in Uganda, to develop bundled, products that are distributed through digital platforms and at scale. Agri-Fin Mobile’s bundled approach means that all solutions include both rural advisory and financial services. Building off Mercy Corps’ deep understanding of the local agriculture sector, we facilitated partnerships between traditional agriculture stakeholders, such as farmers unions and cooperatives, and non-traditional actors such as banks and mobile network operators. To date, Agri-Fin Mobile worked with its partners to reach over 1.2 million smallholder farmers. Currently, over 225,000 farmers are actively using products and services developed by Agri-Fin partners.Mercy Corps

When testing business models, Agri-Fin Mobile was responsive to the local environment, such as the regulatory landscape and current market conditions, resulting in a variety of partnerships reflecting the appropriate local context. In Zimbabwe, the program partnered with Econet to test a mobile network operator approach, developing a platform, EcoFarmer, to reach farmers with agricultural tips, weather index insurance, and a digital savings product. This model proved to be a huge success reaching over 300,000 farmers. In Uganda, Agri-Fin Mobile worked with smaller startups, such as TruTrade and Ensibuuko, to grow and scale their businesses and is currently running an extended hackathon to develop agriculture technology solutions for refugees in northern Uganda. Finally, in Indonesia we tested a bank-led model working with Bank Mandiri, the largest commercial bank in Indonesia, to expand its agent banking network to farmers and a consortium of partners to develop an agricultural financing scheme that provides access to credit for inputs. Combined, the two models in Indonesia have reached over 160,000 farmers.

While the context for all three countries varied, the program has learned there are key factors that lend to successfully developing, piloting and then finally rolling out these models. First, when finding and establishing partnerships, they should have similar values and goals. By working through existing farmer group unions in Indonesia, we were able to introduce agent banking to group members and build off existing relationships. Second, when working with partners to create a product, you need to put the farmer first. In Zimbabwe, we worked with CGAP and IDEO.org to develop a school savings product using human-centered design, complimenting the existing EcoFarmer offerings. Finally, when introducing a digital solution, the model should include a human interface. Whether they are leaders of a local farmer cooperative, loan officers, or extension agents, these points of contact can act as your on the ground support, and help to increase uptake.

Agri-Fin Mobile began piloting the concept of bringing together different actors to develop solutions and go to scale, and many of the learnings have been adopted by our sister program AgriFin Accelerate. As Agri-Fin Mobile comes to an end in August; Mercy Corps plans to continue exploring how we can develop new business models that engage private sector to reach more smallholder farmers in new regions, countries and contexts.

To learn more about Mercy Corp’s work, visit their YouTube channel here. 

Photo Credits: Mercy Corps

Is Digitizing the Answer to Scaling Youth Financial Services?

Digital financial services have been a robust part of the development sector for over a decade and their impact continues to grow. This blog is part of a series that focuses on successful DFS projects that achieve results-driven impact in people’s lives.

By Sonali Rohatgi, Technical Advisor, Digital Solutions

Youth are often not seen as viable customers by financial institutions given the high dormancy rates and low balances that plague youth savings accounts. Can banks rely on digital channels to attract and retain youth savers more cost-effectively? FHI 360 is partnering with Ecobank to test a digital outreach strategy for youth in Ghana.

Advertised as “a truly mobile account for the mobile generation,” Ecobank recently launched “Ecobank Xpress Account” in Ghana. An entirely digital interest-bearing savings account, the Xpress Account can be opened and operated without a visit to a bank branch. This digital account is driven by the Ecobank mobile banking application, and can be accessed via smart phone or a feature phone. Deposits and withdrawals from the account can be made at any Ecobank Xpress Agent point, bank branch or at the ATM. Alternatively, one can transact through the mobile money agent network, as the account allows customers to push money from their mobile money account to their Xpress Account, and vice versa. With the introduction of this product, Ecobank can extend savings opportunities to unbanked populations such as youth who need to make small and frequent deposits but cannot readily take on the time and cost to visit a bank branch. If successful, Ecobank can scale a youth product offering across Ghana, and eventually across the 30+ countries in Africa where it operates.

How could Ecobank use its new Xpress Account product to reach youth and convert them into active savers? Building upon learnings from other initiatives indicating that SMS reminders can boost savings, FHI 360 and Ecobank set out to determine if pairing the Xpress Account with digitally-delivered financial education could encourage youth to improve their savings and financial management skills. Digital channels used could include SMS, mobile applications, or social media.

To develop an approach, FHI 360 commissioned a phone-based survey with over 800 predominantly urban youth aged 18-24 to understand their access to financial services, goals and priorities, and use of mobile applications. Evenly split between men and women, 25 percent of respondents had a primary education or less, and 23 percent had completed junior high school. The remaining had senior high school or tertiary-level education. The goal of the survey was not to conduct a statistically rigorous study, but to inform a digital engagement strategy for a pilot in Accra.

The survey results surprised us in many ways:

Mobile application use is more limited than expected for urban youth with relatively high educational levels. 45 percent reported that they do not use a computer, and almost 40 percent reported that they do not use any apps on their phone. Almost one-third used their phone to access only Facebook daily, 18 percent accessed only WhatsApp daily, and 16 percent accessed Instagram or multiple apps.

Almost half of all respondents said they do not earn enough to save. 22 percent save in a mobile money account — indicating that many youth are already using digital accounts. 16 percent save in a bank or microfinance institution, signaling engagement with the formal financial system. Less than 15 percent used informal savings groups known as “susus,” and other unregulated methods. Those with higher levels of education were more likely to use bank, microfinance institution and mobile money accounts.

Education, business startup and supporting dependents are priorities. When asked about savings goals, education came out on top, driven mainly by those who had completed at least senior high school and were perhaps looking to save for tertiary education. Business startup was a high priority that cut across all levels of education, followed by supporting dependents. The least popular response was saving to get a loan, followed by saving for consumer purchases such as a phone or motorbike.

Youth don’t use formal credit. While 38 percent of youth reported saving in a financial institution or via mobile money, 60 percent do not borrow at all and 30 percent borrow informally from family and friends. A savings-led value proposition seems to be a more promising way to engage this youth segment in financial services.

When asked about financial education needs, 42 percent prioritized learning how to manage spending, and 26 percent wanted to learn how to build their savings. Accessing and evaluating loans (7 percent) and deciding where to save (8 percent) were less popular. These results suggest that digital tools that allow youth to track and manage their spending and savings can potentially be extended as value-added services to attract and engage them.

FHI 360 and Ecobank used these results to form the approach. We developed a multi-channel outreach strategy, relying on SMS, IVR, in-person financial literacy training and peer education rather than social media channels that had more limited reach. Because youth feel they do not earn enough to save, we focused on demystifying savings. Our financial education emphasized that even small bits of savings can add up quickly, and provided rules of thumb on managing spending. We also encouraged youth to set savings goals, followed up by weekly reminders on progress against those goals to keep them motivated over an extended period of six months.

As our pilot unfolds, we plan to monitor and iterate our approach with constant feedback from youth clients from formal and informal sectors, so we can use the results of our prototype to build a truly customer-centered and scalable youth financial services product.

Photo Credit: Neil Brandvold

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.

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.