Hmm i Case Study Cardoza

7/27/2019 Hmm i Case Study Cardoza

1/7

Christiane CardozaPage 1

Mobile Money: Haiti Case Study

Following the deadly 2010 Haitian earthquake, the Bill & Melinda Gates Foundation

partnered with the U.S. Agency for International Development (USAID) to jumpstart mobile

money in Haiti.1The Haiti Mobile Money Initiative (HMMI) provided a $2.5 million award in

January 2011 to mobile operator Digicel for launching the first mobile money service, TchoTcho

Mobile, in Haiti.2Seven months later, Voila was given a $1.5 million award for the second

mobile money service, T-Cash.3As the two operators scaled and reached 5 million transactions,

they received several monetary awards for their growth.4As of January 2012, TchoTcho Mobile

and T-Cash had a network of 2,270 agents.5

Six of the fourteen nongovernmental organizations (NGOs) implementing mobile money

were located in Haiti in 2011.6These six NGOs were Catholic Relief Services (CRS), Mercy

Corps, CONCERN International, World Vision, Oxfam, and Help Age International.7These

NGOs worked to integrate mobile money into the community as a means to promote savings,

with both successes and failures. In 2012, the Associated Press shared World Visions progress,

which explained they registered 6,000 Haitians for mobile money, but only 1,000 used it.8

The NGOs used mobile money for a variety of transactions, including livelihood and

cash-for-work (CfW) programs. Livelihood programs provided participants with the ability to

purchase particular goods from a set list of vendors, and include food security and housing

programs.9Mobile money, alternatively, allowed cash-for-work programs to deliver direct daily

wage payments to participants mobile money e-wallets.10In 2012, CfW programs distributed

$500,000 to approximately 5,500 individuals.11

Catholic Relief Services CfW launched immediately following the earthquake. The

program provided wages to Haitians who worked on recovery efforts. Initially, CRS

administered the programs payroll with a payment courier service called Fonkoze. 12In 2011,


2/7


CRS changed its payroll services in order to T-Cash.13For the pilot, CRS chose two groups of

CfW beneficiaries to receive biweekly wages through T-Cash for seven payrolls.14

To utilize T-Cash, CRS was required to create a CRS Wallet by opening a bank

account with Unibank.15CRS then trained beneficiaries how to use T-Cash in order to provide a

comprehensive understanding of the system. Beneficiaries were expected to provide their own

mobile phones, although some rural beneficiaries were given phones for free. In enrolling

beneficiaries for T-Cash, CRS decided to administer Know Your Customer (KYC) forms in

order to raise the maximum transaction size from 2,500 Haitian gourdes to 10,000 gourdes. 16

During enrollment, CRS found that not every beneficiary provided a correct mobile

phone number.17In order to ensure this mistake was not repeated, CRS required beneficiaries to

present their phones while registering to ensure the correct number was provided. Further,

program managers performed a check to ensure the bank accounts were linked correctly to their

phones.18

After establishing an account, beneficiaries were required to sign a form for each day

worked. These forms were sent to the Finance Department of CRS-Haiti to enter into the T-Cash

online system to provide payments to workers.19Two initial issues the program ran into were

compatibility of data and the availability of cash.20The CfW program managers did not initially

input data into Excel in a way that was compatible with the T-Cash website. Data had to be

reentered to address this issue. The program managers also found that it was imperative to

inform Voila of its intentions to perform payroll transactions to ensure that all tellers had

sufficient funds at their stations.21

In regards to the effectiveness of implementing T-Cash in CfW, CRS expected faster,

cheaper, safer, and more convenient CfW payments.22Overall, these expectations were both met


3/7


and exceeded. CRS found that while under the Fonkoze system, payments took eight to ten days

to process.23Under T-Cash, it only took a maximum of two days to process payments.24This

decrease in time allowed CRS to spend fewer resources on payroll distribution. Switching to T-

Cash also saved CRS a total of 21,498 gourdes (Table 1 and 2).25

In terms of safety, T-Cash allowed staff to perform fewer direct deliveries, which

decreased risk to CRS personnel.26Beneficiaries also found T-Cash to be safer for them, and

many people expressed satisfaction with the system because it increased confidentiality. Most

importantly, beneficiaries expressed that T-Cash tellers were conveniently located and the

program was accessible and understandable.27

Overall, beneficiaries and CRS staff alike

expressed their approval of the pilot system.

CRS took away many lessons from this pilot. The program revealed the importance of a

comprehensive stakeholder analysis and good communication between all parties. It also

emphasized that ensuring country staff is up to date on the process of payroll, employing the

country program finance department to prepare cost figures, and employing community members

already knowledgeable about local mobile money is vital to success.28The importance of

verifying phone numbers and the activation of mobile money accounts was also critical.

CRS also recommends considering phone reception range, phone utilization, transfer and

account limits, liquidity, effective training materials, and a contingency plan in the case of a

payroll transaction failure.29The interoperability of the mobile money program is important to

consider.30

Is it possible for the program to be interoperable with multiple mobile money

providers? These considerations can help tailor a more successful program for new regions.

In early 2012, Better than Cash released a report on HMMI entitled Plugging into

Mobile Money Platforms: Early Experiences of NGOs in the Field, which They included


4/7


several similar lessons for NGOs interested in mobile money. In order for mobile money services

to work for NGOs, it is vital for MNOs to be committed to the project. NGOs operate in areas

with weaker mobile money systems, and MNOs must be willing to address this need for

success.31

As with CRS, Better than Cash emphasized the importance of education programs for

mobile money in order to fully implement programs. Several programs ran into difficulties in

opening new accounts, and so MNOs agreed to accept NGO-issued identification cards for KYC

requirements in order to open accounts.32Better than Cash also expressed the importance of

communicating with cash agents in order to be prepared for each payroll or benefit rollout.

Without this communications, agents are unprepared for the large spike in customers.

Better than Cash reminds NGOs of the importance of understanding that more resources

will be needed at the start of a mobile money project if there is no fully developed market for it.33

NGOs must educate donors and maintain records to evaluate the effectiveness of mobile money.

Including all stakeholders and maintaining a partnership is vital to success. Better than Cash

advises that NGOs consider the limitations of mobile money. There are several options available

for cash-based programs. The organization cites SMS-based e-vouchers as a popular option.34

In April 2012, Digicel acquired Voila.35While the two companies continue to run

separately, this merger did affect mobile money programs. Unfortunately, the change presented

several obstacles for CRS. Around the same time, HMMI funding concluded. As a result, the

most updated information about the successes and failures of these programs is from 2012.36

Nonetheless, mobile money continues to exist in Haiti through the work done by these NGOs

and continues to impact Haitian lives. We learn from this case study that it is important to keep

market factors in mind when initiating a program while also ensuring to educate all stakeholders.


5/7


Table 1. Counterfactual Cash for Work Costs without T-Cash Pilot Project, August 3, 2011 October 28,

2011 (Haitian gourdes)

Note: Table shows what it would have cost CRS to have made all CfW payments from August 3, 2011, to October28, 2011, with Fonkoze.

Fokoze charged 37 gourdes per transfer. The figure shown reflects 561 T-Cash beneficiaries and 659 Fonkozebeneficiaries.

CfW program managers estimated that four vehicles were being used every payroll before introduction of the T-Cash pilot. The rate was $3.02 per kilometer driven (the cost per kilometer was provided by CRS Haitisfinance department).

Table 2. Actual Cash for Work Costs After Launch of T-Cash Pilot Project, August 3, 2011 October 28,

2011 (Haitian gourdes)

After the pilot project was launched, T-Cash performed 659 transactions. The transfer fee of 50 gourdes pertransaction was paid by CRS Haiti.

After the pilot project was launched, Fonkoze made 561 transfers. Fonkoze charged a fee of 37 gourdes per cashtransfer, which was paid by CRS Haiti.

T-Cash charged the recipient of funds a fee of 45 gourdes-a cost that was borne by CRS Haiti. The cost shownis for 659 transactions at this rate.

CfW program managers estimated that, on average, CRS Haiti vehicles were drive 37.5 kilometers for each perpayroll delivery. From August 3, 2011 to October 28, 2011, 14 vehicles were used for CfW payments executedby Fonkoze, billed at a rate of $3.02 per kilometer driven (the cost per kilometer was provided by CRS Haitisfinance department).

(Note: Tables and explanations were taken from MacDonald, Brian, and Hemely Gedeon. Banking with MobilePhones in Haiti: A Report on a T-Cash Pilot Project. Rep. CRS, 2012.)

IJK' 7/ ' : ,'L .2-7 ,'3 1$+,-$ & +2 / ,

=)&0.&B('20.& 75677'B+* B2.(.6 .*/*0 @&F)2++.J 54O697

Documents

Hmm i Case Study Cardoza