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New Trends in USAID Procurements. The transition towards e-Payments April 9, 2013. What we will cover today. Agenda. Introductions USAID’s Commitment to e-Payments USAID Tanzania: Mission Perspective on e-Payments Assessing viability of e-Payments Practical Tips for Implementation - PowerPoint PPT Presentation
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New Trends in USAID ProcurementsThe transition towards e-Payments
April 9, 2013
What we will cover today
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1. Introductions
2. USAID’s Commitment to e-Payments
3. USAID Tanzania: Mission Perspective on e-Payments
4. Assessing viability of e-Payments
5. Practical Tips for Implementation
6. Q & A/Upcoming Events
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Agenda
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Introductions
Nandini Harihareswara Operations Director & Sr Partnerships Officer
Nya Kwai BoayueAcquisition and Assistance Specialist USAID/Tanzania
Hamilton McNuttProgram Manager, Payment Innovations
Anthony LattaTreasurer, Finance and Administration Svitlana Hall Operations Associate, Finance and Administration
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USAID’s Commitment to e-Payments
Why USAID Supports e-Payments
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Foster cost savings and improve aid efficiency
Increase transparency and reduce leakage and waste
Reduce security risks to program staff
Improve access to financial services for the poor and unbanked
Catalyze development of new and innovative financial products for the poor and unbanked
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USAID’s Commitment to e-Payments
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Encourage the transition to
electronic payments (including mobile money) in USAID
programs and operations where
appropriate
Direct funding and support to technical assistance programs and partnerships fostering the development of e-payments
E-payments incorporated into
project design, procurement language and
existing measurement
systems.
Development of a system to track the
usage of electronic payments
Tools and trainings to
assist partners in choosing payment platforms
USAID Procurement Executive’s Bulletin
• Evaluate e-payment alternatives, Include e-payments use in concept papers, applications & proposals, if appropriate
• Examples of operational costs that can use e-payments:(1) temporary staff salaries; (2) vendor payments; (3) travel per-diems.
• Examples of program costs that can use e-payments: (1) cash for work; (2) payments to trainers; (3) intra-value-chain payments; (4) grants to beneficiaries.
• Missions can elect to make use of e-payments an evaluation factor in solicitation documents.
USAID PROCUREMENT EXECUTIVE’S BULLETIN NO.
2012-05 (7/12/2012)
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The Philippines
ALL SOLICITATIONS FROM THE MISSION ENCOURAGE THE CONSIDERATION OF ALTERNATIVE PAYMENT METHODS
• Request for Proposal No. SOL‐492‐12‐000033, Facilitating Public Investment (12/8/12):
L.5 ADDITIONAL INSTRUCTIONS TO OFFERORS(6) Electronic PaymentsUSAID encourages the Contractor to consider alternative methods of payment, especially electronic forms of payment, in place of cash payments when appropriate.
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Afghanistan
THE AFGHAN MISSION IS PROMOTING THE USE OF E-PAYMENTS IN PROCUREMENTS• Request for Proposal No. SOL-306-13-00002, Regional Agricultural Development
Program – South (#2) (1/22/13): This RFP includes
the use of electronic payments in the Statement of Objectives
the ability to address and implement key areas of the Statement of Objectives in the Technical Evaluation Criteria.
USAID, through the Financial Access for Investing in the Development of Afghanistan (FAIDA) program and other programs, has encouraged the use of electronic payments, including mobile money . . . The contractor should utilize these services to the greatest extent feasible within its company policy to strengthen the efficiency and security of financial transactions at all stages of value chain activities.
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Haiti
THE MISSION IN HAITI REMAINS A LEADING ADVOCATE OF MOBILE MONEY
• Request for Proposal No. SOL-521-12-000021, Haiti Feed the Future Partnership: Northern Corridor (2/14/12):
C.6.3.3 SUB RESULT 3.3: INCREASED ACCESS TO FINANCIAL PRODUCTS…The Contractor shall also explore the possibility of utilizing mobile money technology for
conducting financial transactions (payments for purchases, cash transfers, payroll, credit disbursements, credit repayments, etc.).
• USAID/Haiti included language requiring support of mobile money in a solicitation in 2011:
The implementer shall support the Haiti Mobile Money Initiative, where feasible, including the payment of staff, the purchase and sale of goods and services associated with program implementation. The Mission will determine the range of allowable cost mobile money services utilized by the contractor/grantee.
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USAID Tanzania: Mission Perspective on e-Payments
Tanzania’s Mobile Industry by the numbers
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46.6 million people
76% GSM coverage
23.4 million connections
50% mobile penetration
2012
Source: World Bank/GSMA 2011
Mobile Phones vs. Bank Penetration in Tanzania
13Source: World Bank Databank
2004 2005 2006 2007 2008 2009 2010 20110
5000000
10000000
15000000
20000000
25000000
30000000
35000000
Mobile Telephone vs. Bank Penetration in Tanzania
Depositers with Commercial Banks Mobile Cellular Subscriptions
21.5 million
Tanzania: Bank Branches vs. Mobile Money Agents
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20120
2000
4000
6000
8000
10000
12000
14000
16000
18000
ATMsBank BranchesMobile Money Agents
17,000Interviews*
594*Work Bank
Source: World Bank 2010/TDY Interviews 2012
*Projected bank branch growth
* Estimation combines agents who serve more than one MNO
1608*Work Bank
Mobile Money Products Available in Tanzania?
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Areas Of Action
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Integrating language encouraging e-payments into
future solicitations
Integrating the use of e-payments in long term
development programs, (e.g., Feed the Future, Maternal
Health, Health Systems Strengthening, etc)
The Mission is focused on moving away from the use of cash for the following reasons: • Safety. Program staff holding large amounts of cash going to the field are at risk for
theft or other acts of violence.
• Transparency & Leakages. A high level of cash based payments in programs can lead to a higher level of leakages. E-payments provides a paper trail.
• Efficiency. By using e-payments, program staff can focus on programmatic work and Finance/Administrative staff can be more effective with the use of e-payments.
• Scale. Programs, if successful, can be scaled up quickly when using e-payments.
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Areas Of Interest
Operations and Finance
Capacity building activities
Agriculture and Health
Programs
Working with implementing partners to encourage use of e-payments in the payment of per diems, travel advances, and other payments made to program staff that normally occur in cash
Encouraging programs conducting intensive capacity building activities to assess and implement alternative payment methods for per diem and travel cost reimbursement disbursed to training attendees
Work with program technical teams to examine key payment streams within health or agricultural value chains that experience pain points with cash management
Current Program Integration
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Program Objectives Use of e-paymentsTanzania Staples Value Chain- NAFAKA (ACDI/VOCA)
Improve smallholder farmer productivity and profitability within the maize and rice value chains
Beginning to evaluate how to facilitate mobile payments between small holder farmers and agricultural input companies.
Community Health Workers-Pathfinder
Builds community health systems in 35 districts in Tanzania in order to support a range of health challenges from HIV/AIDs to family planning.
Uses M-Pesa to disburse monthly stipends to 3,500 community health workers throughout the country.
The following programs have already begun exploring ways to integrate mobile money into their programs and operations…
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Assessing Viability of e-Payments: Costing Utility Tool
Process for making an informed decision and the tools to help you get there
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1) Where is cash used in my program and my operations, and is it a problem? Available Resource: Cash Scoping Survey
2) Does the country I work in have appropriate electronic payment infrastructure and regulatory policy? Upcoming Resource: Country Wide e payment due diligence guidance
3) Assess provider capabilities and get a better understanding of products offered. Available Resource: e-Payment service provider due diligence guidance
4) Analyze the costs associated with cash management vs. a transition toward e-Payments Available Resource: Cashing Utility Analytical Tool
5) If you do find provider capabilities and clear benefits to your program, develop an implementation plan and implement the transition. Upcoming Resource: Standard operating procedure guidance
Costing Utility Tool Example
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Practical Tips for Implementation: Chemonics
Establish Internal and External Needs
• Accounting systems• Record keeping (audit trail) • Operation procedures
Internal
• Mobile Network Operator vs. Bank
• Selecting a provider • Access to payment system
External
MNOs vs. Banks
Country context
Mobile money vs. mobile wallet
Geographic distribution
Example from the field:
Philippines
Internal – Accounting system
• Ensure accounting system is ready
• Start small and with your staff
Internal – Audit trail
Internal – Operating procedure Mobile Money vs. Checks
Mobile request
Approval
Upload
Payment approval
Payment Release
Payment confirmation
Check request
Approval
Prepare check
Sign check
Release check payment
Copy check
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Questions and Answers
Upcoming Events
April 11 April 25 April 23 May 2
Ask the expert Twitter Session with USAID Mobile Solutions Division (11am-noon EST); Info: nandini@usaid.gov
CRS Webinar on their experiences with electronic voucher systems in Haiti (11am-noon); Info: fredrik.winsnes@nethope.org
NetHope/USAID Webinar on lessons from Tanzania and Uganda in electronic payments(8am EST); info: JChen@qedgroupllc.com
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Replay of the Trends in USAID Procurements for audiences in East Africa and South East Asia (8 am EST); info: hamilton.mcnutt@nethope.org
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