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2016: A Year of Digital Development in Action

In 2016, mSTAR implemented 41 activities.

It was a year of dedicated work towards mSTAR’s goal of using technology to improve lives in underserved communities.

Read our 2016 Annual Report.

Our 2016 activities spanned Central America, Asia, and Africa. They included  diverse activities such as the Innovations Awards for original uses of data for resilience; a widely-received report on alternative business models for connectivity; and a Financial Inclusion Forum highlighting Bill Gates. All 41 activities were exciting and meaningful; here are our most noteworthy:

First of its kind digitally-enabled micro-credit in Bangladesh.
One of the biggest challenges farmers face in Bangladesh is that they pay back loans weekly. Paying loans so regularly can cause a snowball effect of debt for farmers who, due to the nature of farming, don’t have a steady weekly income. Once crops are in the ground, it may be a few months before they have income. To pay back the original loan farmers are often forced to “take out other loans…and rush to sell their crops immediately after harvest,” Josh Woodard, mSTAR Regional ICT and Digital Finance Specialist, has said. Rushing to sell  crops means farmers often don’t get their full market value. To address this, mSTAR has worked with two different banks in Bangladesh, Bank Asia and IFIC Bank Limited, to launch two new digitally-enabled micro-credit products for farmers; the first using NFC-enabled debit cards, the latter using mobile wallets. Both of these products have much lower interest rates than alternative options offered by microfinance institutions, as well as much more attractive repayment terms—a single repayment after six months, instead of weekly installments. With these products, farmers can now pay after harvest. No longer in a rush to see their produce, they are more likely to receive a better price. In a country where most people work in agriculture, these new products could be critical to stemming poverty and breaking a cycle of debt. Over 250 farmers have signed up for the initial pilots of these two products, and both banks are already eyeing expansion to thousands of more farmers.

Mobile money salary payments for teachers in Liberia.
Through mobile money, mSTAR is transforming the daily lives of teachers in rural areas. In 2016, mSTAR successfully rolled out mobile salary payments for teachers in Nimba County. Sixty-seven teachers received payments in the first mobile payment payroll. 100 percent reported saving time compared to traditional direct deposit. Mobile salary payments also helped teachers save money. Before, teachers reported spending approximately 13.5 hours and $25 of their salary to pick up their money. After mobile payments, they spent an average of 25 minutes and $2 in service fees to cash out their mobile money. The success of the rollout has resulted in buy-ins to roll out mobile money to health workers and to teachers nationwide.

Addressing the data gap in mobile phone users.
mSTAR, USAID/Mozambique and DFID, through DAI’s Financial Sector Deepening project, set out to clearly understand the landscape of growing mobile phone users. mSTAR and partners interviewed over 6,000 mobile phone users and non-users. The survey garnered valuable information and data about the availability and accessibility of mobile technologies and the way people use mobile phones in their daily lives. The findings will allow USAID staff in Mozambique to make smarter programming decisions as they increasingly rely on digital technologies to deliver better results.

In 2016, mSTAR used technology for better development outcomes across sectors. We encouraged innovative uses of data for resilience and rolled out mobile money products that show real promise in improving daily lives and diminishing the threat of poverty. In 2016, we continued to establish digital technologies as some of the most exciting and promising avenues to improving lives among the most vulnerable throughout the world.

Review our 2016 Annual Report (with pictures!) here. 

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Liberian Health Care Workers Transition to Mobile Money

By Erica Bustinza, mSTAR/Liberia Project Manager

Meet Kou, a health worker in rural Nimba County, Liberia. During the Ebola crisis, Kou took action to combat the disease, going door-to-door in her community to stop its spread. The relentless determination of Kou and her peers to rise each morning and fight back against the illness helped bring the epidemic to a halt.

Despite facing life-threatening risks performing her daily work duties, Kou wasn’t able to access her pay. To pick up her salary she had to travel a far distance from her rural community to the bank, but travel was restricted due to quarantines and was risky because of the prevalence of Ebola and difficult road conditions. While many of her peers protested the lack of pay through boycotts, Kou continued working towards saving her country.

To increase efficiency of payments, FHI 360’s Mobile Solutions Technical Assistance and Research (mSTAR) Project, funded by USAID, is working with Liberia’s Ministry of Health (MOH) to offer mobile money salary payments. This gives health workers the option to receive their salaries from mobile money agents who are often closer and more convenient than banks.

Kou spends a shocking amount of her salary on collecting her salary. Her monthly net income is LD 14,300 (USD $146) of which she spends LD 800 on transportation to the bank to retrieve her salary. At the bank she is frequently told that the bank “system is down” and is forced to wait until the money is accessible, sometimes for several days. During this time not only is Kou missing work, but she’s also racking up costs. She spends LD 100 round trip to her relative’s house where she can sleep, LD 150 on food and LD 100 on a phone card to inform her family of the delay. At the bank, Kou waits in line for four hours and then pays LD 300 in bribes to finally pick up her salary. When she receives the cash it is LD 13,200 (USD $135) instead of the LD 14,300 that she expected. The bank can only offer the explanation that this is what was deposited and Kou has no access to a paystub explaining the additional deductions. After spending another LD 800 to return home, Kou is left with LD 10,950, only 77% of her salary.

mSTAR first worked with Liberia’s Ministry of Education to roll-out mobile money salary payments for teachers. The mSTAR team faced questions and challenges during the rollout, such as cash availability (liquidity) and participant targeting. When mSTAR began to plan for rolling out MOH salary payments the team did not assume that the challenges for health workers would mirror those in education. To gain a clear understanding of health payment systems, use of mobile technology, and health worker attitudes and trust in the government, mSTAR and the MOH completed two related analyses: Liberian Health Workers and Mobile Money: An Ethnography and A Contextual Analysis of Payment Disbursements for Liberian Health Workers. The ethnography describes the experiences and attitudes of health workers in Liberia with regards to mobile phone usage and salary disbursement, while the Contextual Analysis explores the cultural, social and environmental context of payment disbursements. The research was done by the mSTAR team and 10 researchers across five counties who conducted direct observation, focus group discussions and key informant interviews.

Some of the findings confirmed what was already known – that health workers spend a relatively large portion of their salaries and a significant amount of time away from their jobs and families to collect monthly pay. The reports confirmed widely held assumptions, like the lack of trust health workers felt towards their employer because of inconsistent deductions and unreliable frequency of payments.

The reports also unearthed new, surprising findings that will impact the project’s roll out. For example, a majority of health workers that participated in the study already use mobile money. They are sending remittances to family for child care, school fees and as unexpected expenses arise. In some cases, mobile money is even used to pay bills or pay the school for fees directly.

Kou doesn’t like the current system through which she receives her salary, but she is still skeptical of the new and unfamiliar mobile money system. mSTAR’s comprehensive look at Kou’s and her peers’ patterns allows mSTAR’s team to frame mobile money in a context Kou understands and build trust in the system by relating it to health workers’ current needs.

With this targeted method, Kou will better understand the system and will be more likely to enroll in mobile money payments, which will enable her to collect her salary while avoiding unnecessary travel away from home and expenses. Most importantly, the mobile money approach helps keep Kou safe, and in the rare occurrence where traveling becomes dangerous again in Liberia, Kou will be able to receive her salary and continue caring for her community.

Erica Bustinza is the Project Manager overseeing 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.

Photo credit: CDC Global

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The First Step in Developing Effective Mobile Programs: Understanding the Landscape

Over the last decade, Mozambique has witnessed a transformative time in communications and mobile technology.

In 2005, with 1.5 million mobile subscriptions, mobile phone use had already far outpaced landline connections. By 2015, subscriptions had skyrocketed to 20 million. This transformation in connectivity marks a fundamental shift in how people, government and businesses communicate with one another across the country. As increasing numbers access mobile services across Mozambique, private and public actors alike are recognizing opportunities to apply mobile technology to accelerate development outcomes.

While this is an exciting time to leverage new possibilities and integrate mobile technology within programming, those seeking to design mobile programs or new products are often faced with a profound dearth of data on who is using mobiles and how. This is a particular challenge for the development and humanitarian communities who often work with some of the most vulnerable populations. Statistics available through industry and trade groups are often outdated and mask critically important differences in access. There are also few statistics captured on usage, yet we know that understanding the mobile features and services users are comfortable with, as well as unique borrowing patterns, are critical for ensuring success. Without better data on ICT access and usage among these key populations, designing effective and efficient programs that successfully take advantage of mobile technology has remained a challenge.

mSTAR set out to address this data gap in Mozambique with the unique Mobile Access and Usage Study (MAUS). Proving that donors are in agreement on the need for data on technology, USAID/Mozambique and DFID, through DAI’s Financial Sector Deepening project, partnered to commission the study. This multi-faceted study examined the availability and accessibility of mobile technologies, and the dynamic ways they are being used in the daily lives of Mozambicans.

mausobjectivesThe MAUS household survey employed traditional face-to-face interviews on access, usage and barriers with adults across four provinces: Manica, Nampula, Tete and Zambezia. The study also included a Computer Assisted Telephone Interview (CATI) survey utilizing remote data-collection via mobiles. The CATI was designed to not only gather a more complete understanding of how active mobile users are using their phones, but also to measure change in that use over time, and to test methods for retaining participants in mobile phone surveys.

mSTAR recently completed the study and hosted a presentation in Maputo, Mozambique to provide a first view of the findings with our many collaborators. The opening and closing remarks featured John Irons, USAID’s  Agriculture, Trade and Business Office Chief, Shahnila Azher, Team Leader of DFID’s Growth and Rural Development and Dr. Americo Muchanga, National Director of the Instituto Nacional das Comunicações de Moçambique (INCM). The coordination and collaboration achieved in working with the mobile operators, government agencies, and donor groups is a testament to the importance of this activity, as well as the shared value in understanding the mobile landscape in Mozambique.

Combined, the surveys completed over 6,000 interviews with both users and non-users in the four target provinces. As presented in Maputo, the study surfaced unique mobile landscapes for each target province and significant variations in access across geographies, gender and education.

Check back to this blog soon to get the full report and additional analysis!

In the meantime, this infographic presents the highlights of the survey results to date. It is hoped that the results of the study will help drive the deliberate and responsible use of technology in development.

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Microsoft Partners to Create Affordable Internet Across the U.S., and the World

Guest post from Microsoft

At Microsoft, we recently announced that we have awarded Affordable Access Initiative grants to twelve entrepreneurial businesses to help scale their solutions and business models to increase affordable Internet access in communities around the world. Each company will receive seed grants of $70,000 to $150,000 and resources including BizSpark tools such as free software, services and technology support to help extend the reach of their hardware, applications, connectivity and power solutions. Although there are still approximately 4 billion people globally not yet online, universal and affordable high-speed Internet access is more achievable than ever with new technologies and business innovations.

Microsoft’s Affordable Access Initiative aims to democratize access to the Internet through grants, commercial partnerships, connecting new leaders and community engagement. Together with our partners, we already have many exciting projects underway. Some recent progress:

  • In the United States, Microsoft is partnering up with Mid-Atlantic Broadband Communities (MBC) to help close the homework gap in two rural Southern Virginia counties. These are counties where only about half the students have broadband Internet access at home. By wirelessly extending its existing installation of fiber-optic connectivity, MBC will be enabling thousands of school kids to have connectivity at home. MBC will be leveraging new TV white space and Wi-Fi technologies developed by Adaptrum in San Jose, California and MediaTek in Taiwan.
  • Outside the United States, we are completing phase one deployments of other affordable access projects with our partners. These include projects in Jamaica and Botswana where connectivity and cloud services are being provided to many entities. In Botswana, we are partnering with the Botswana Innovation Hub, Vista Life Sciences, the United States Agency for International Development and Botswanan ISP Global Broadband Solutions to assist in remote delivery of specialized medicine, including cervical cancer screenings, to women at rural healthcare clinics. In Nanyuki, Kenya, our network operator partner, Mawingu Networks, is rapidly extending the reach of its wireless broadband network.

Taking what we’ve learned from our TV White Spaces work, we’ve seen how, for the first time, we have real, affordable solutions that truly bring the benefits of the Internet and computing to even the most remote communities. We don’t have to wait to make an impact. The challenge is deploying them, and then empowering people with the tools and information to make the most of them. And when you’re talking about an issue that affects 4 billion people, you can’t take a one-size-fits-all approach. Last-mile connectivity is a global challenge, but it requires local solutions.

mSTAR was honored to have Namema Amendi speak on Microsoft’s Affordable Access Initiative at the launch of the report, Business Models for the Last Billion: Market Approaches for Increasing Internet Connectivity. To view Namema’s presentation, click here

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Event Highlights: Business Models for Connectivity

On Tuesday, May 24th, mSTAR launched Business Models for the Last Billion: Market Approaches to Internet Connectivity at the event Business Models for Connectivity. Business Models for the Last Billion details how innovative entrepreneurs and forward-thinking investors are connecting the poorest and most remote communities in the world to the Internet. We were thrilled to have an engaging and dynamic line-up of speakers at the report launch.

Highlights include Namema Amendi from Microsoft’s Affordable Access Initiative who opened the event by announcing Microsoft was giving seed funding to two of the business models featured at the event and in the report: AirJaldi and Wi-Fi Interactive Networks (WIN). More than 200 start-ups had applied for funding from Microsoft, yet AirJaldi and WIN were among only 12 companies that received the grant. To see Namema’s presentation, click here.

The report authors, Steve Schmida and Caitlin Lovegrove from SSG Advisors, then detailed the report findings. They concluded that the technology exists for connecting the “last billion.” The next step is to bring the businesses that provide connectivity to the world’s poorest billion to scale. Click here to see their presentation.

Philip Zulueta, COO of WIN, flew in from the Philippines to describe his start-up to the investors, donors, NGOs, government agencies, and tech companies present. WIN enables base of the pyramid consumers to access wifi. WIN partners with major companies to set up hotspots at kiosks where that company’s goods are sold. If a consumer buys the sponsoring corporation’s products, the consumer also gets 30 minutes of free wifi. To learn more about WIN’s model, view Philip’s presentation here.

Paul Talley, Chairman and CEO of ViRural, then described ViRural’s model. Currently operating in Nigeria, ViRural designs, deploys, manages and maintains wholesale cellular networks for rural communities with no power and no Internet. ViRural partners with local mobile operators so that consumers can use their existing devices to connect with no extra charge to ViRural’s networks. To see Paul’s presentation, click here.

Michael Ginguld, Director of AirJaldi, arrived from India and took the audience through AirJaldi’s journey of becoming a successful start-up. AirJaldi provides high-quality broadband Internet to rural Indians. AirJaldi currently serves 70,000 Indians who previously had little to no Internet and aims to reach 25% of India. Click here to see Michael’s presentation.

After the entrepreneurs presented their business models, the audience heard from the investors who helped turn Mawingu, an Internet connectivity start-up, into reality. Lauren Kickham from Vulcan Inc, Jim Forster, Chairman and Angel Investor for Mawingu and AirJaldi, and Namema Amendi from Microsoft described how they came together to invest in Mawingu, and what it takes for a start-up to succeed. To see the presentation on Mawingu, click here.

Manu Bhardwaj from the U.S. Department of State closed the event with comments on the Department of State’s Global Connect Initiative, which aims to bring 1.5 billion people online by 2020. Manu underlined the critical importance of closing the digital divide and echoed a sentiment Namema made at the beginning of the event: It is just as crucial for a student in rural Kenya to be online as it is a student in Virginia. All people benefit from Internet access. You can view Manu’s presentation here. To learn more about the Global Connect Initiative, click here.

mSTAR is grateful to the authors of the report, SSG Advisors, the speakers who shared their knowledge and insights, and the attendees, who made the event a success!

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How to connect the last billion to the Internet

by Hannah Skelly

The Internet is an essential part of daily life. It allows access to job applications, financial services, and pertinent government information. In fact, studies have showed that internet connectivity increases opportunities for education, gender empowerment and economic growth.

Yet four billion people lack access to the Internet.
Major corporations are brainstorming large-scale methods to connect the “next billion” of the unconnected four billion—the world’s growing middle class. Yet the world’s most disadvantaged billion, the “last billion,” is largely overlooked in these schemes. The last billion often reside in the most remote areas of the world that traditional telecoms struggle to reach. The lack of access is causing a digital chasm between the connected and the unconnected, and it is set to further disadvantage this underserved population.

mSTAR examined solutions to increasing internet connectivity in the report, Business Model’s for the Last Billion: Market Approaches to Increasing Internet Connectivity, and discovered emerging business models connecting the last billion. The report will be launched on May 24th at FHI 360.  

The report was founded upon a belief that access to the internet should be affordable and available to everyone.

The value of the social, political and economic gains offered by internet connectivity have been well-documented. Seemingly every day, the myriad of ‘digital’ dividends that can be realized through increased connectivity – individually, locally and globally – transform and grow. At the same time, connectivity offers significant near-term financial dividends for a host of commercial service providers and their investors.

With these financial dividends as motivation, the telecommunications industry has brought 3.5 billion people online. Unsurprisingly, telecoms have received substantial returns (on the order of trillions of dollars) investing in appealing and reliable markets. But they are not reaching a large percentage of populations at the base-of-the-pyramid that stand to benefit substantially from internet connectivity. While eight out of ten people in the developed world have internet access, only one out of ten have access in the least developed countries.

Yet this digital divide is not only quite stark, it is actually growing.

In many cases, donors and development actors have found one-time, on-the-ground solutions for providing connectivity to communities that telecoms have not reached, whether for disaster response, security or livelihood development. However, a long-term and sustainable solution to enabling internet access for the four billion people that remain offline requires the promise of financial dividends for traditional telecoms or new entrants operating in these markets.

The good news, and the not so good news.
There are a multitude of reasons why individuals are not online, but the barriers posed by basic access and affordability are major contributors. The development community has been proactive about this issue: they’ve renewed existing commitments and launched initiatives dedicated to addressing various aspects of these barriers to extend connectivity. When this assessment began last fall, the United Nation’s Sustainable Development Goals had just enshrined the importance of universal and affordable access for the world’s least developed countries and the key role it can play across development, including women’s empowerment. Among donors, Global Connect, Connect 2020, the Global Broadband and Innovations (GBI) Alliance, the Broadband Commission for Digital Development, and the Alliance for Affordable Internet are but a few examples of the important work already being done in this space. In recent years, a noticeable set of new champions has emerged from the private sector as well: the tech giants.

As large multi-national corporations look to expand markets for advertising and gather data on nearly all market segments, efforts to connect developing markets have moved beyond the realms of CSR budgets to the realm of engineering dream teams and newsworthy technology endeavors. The field is inundated with announcements on various ‘moonshot’ technologies that aim to overcome barriers of geography and (hopefully) drive down costs. Balloons. Drones. Cutting-edge satellite technology. Large and small, high and low. These efforts seek to provide universal connectivity in awe-inspiring places and mind-boggling arrays. Closer to earth, equally impressive initiatives like Project Link or Terragraph are a testament to the investments large firms are making in urban markets. In addition to these high-profile efforts, a multitude of other inventive methods for extending connectivity abounds: license-exempt solutions, mesh networks, local caching and dynamic spectrum switching keeps Techies buzzing. There is a seemingly endless list to work-around solutions. All of these efforts are exciting to follow, but how will they work in real-life and reach rural lower-income populations at lower price points? Can they be paired with business models that truly offer low-cost connectivity?

Telecoms have been honing their business models for the last several decades to serve the largely urban middle-to high-income segments of the world population. Mobile network operators (MNOs) in particular have been innovating through dynamic pricing and improved terrestrial technologies. However, these models remain noticeably bilateral – provider to consumer – and despite requirements to reach rural communities, the focus on high-revenue markets shows little signs of changing. While the challenge these traditional providers face in reaching low-income populations are complex, one monolith dominates: profit. Low costs and high volume are key to financial dividends at the base-of-the-pyramid. That does not bode well for a service dependent on infrastructure requiring large capital investments and high operating costs. These costs are only compounded by the need to reach wider geographic areas to attain large consumer bases.

MNOs have found ways to improve fiber backbone infrastructure technology and drive down infrastructure costs. Tower-sharing, tower management companies, solar technology, software solutions and mobile virtual network operators (MVNOs) are just a few. Yet these still remain incredibly high cost, particularly in rural areas with widely dispersed populations. The low spending power of base-of-the-pyramid consumers does not balance the other end of the equation. Layer this onto additional challenges: unfavorable business environments, licensing fees and taxes, low knowledge on services desired at base-of-the-pyramid markets and household income elasticity, and prices only go up. Universal Service Funds and Private Public Partnerships, although successful in some contexts, have to date comprised the exception rather than the norm, and industry alliances tend to focus on responding to challenges faced with their existing high-revenue markets such as data overload.

Moving the market approaches forward.
The understandable limits of prevailing telecom business models in reaching the most disadvantaged populations presents those committed to universal connectivity with a dilemma that alternates between perplexing and frustrating. Committed development actors, now joined by large corporations, are determined to close the digital divide and achieve connectivity for the base-of-the-pyramid. This assessment sought to move this conversation forward by examining existing or potential business models that can extend connectivity to the lowest income consumers in a financially sustainable way. By tackling these important questions and providing concrete recommendations for next steps, it is hoped that that for-profit companies, development actors, foundations and governments can work collaboratively to make affordable connectivity a reality for everyone.

Entrepreneurs who have spearheaded models for connectivity in the world’s most challenging environments, and investors who are backing them, will be speaking at our May 24th report launch. Register to attend and learn how these innovative models are connecting the last billion.

Register to attend mSTAR’s Business Models for Connectivity event.

Follow the conversation on Twitter at #ConnecttheLastBillion.

Hannah Skelly is a member of the mSTAR project at FHI 360. She has worked with donors across a spectrum of development fields over the last nine years, including education, health and conservation. New to the techie field, (and under the initial impression that WiMAX was a laundry detergent), she is learning the benefits, and potential pitfalls, of using ICT tools in development everyday. Hannah has an MA in Development Economics from the Fletcher School of Law and Diplomacy at Tufts University and a BA from Emory University.