What is mobile money? How does it work?
Many people in developing countries, particularly in rural areas, do not have bank accounts or live near a bank branch. It can be difficult and expensive for them to make simple financial transactions, such as cashing a government check. Mobile money allows people to use mobile phones or other mobile devices, which are increasingly more available, to transfer money and make payments or deposits.
The mobile money process is straightforward. Local stores and businesses serve as “cash-in, cash-out” agents. In general, when users get funds sent to their phones, they receive a code that they show to an agent. The agent finds the code in a system and then allows the user to withdraw the funds. When users do not withdraw all of their funds, mobile money functions like a savings account. Mobile money systems differ by country, depending on the regulations governing electronic payments. It is a fast-changing field, because a wide variety of mobile financial products, such as savings accounts, are just now becoming popular around the world.
What is the link between mobile money and development?
Development programs frequently need to make small payments to beneficiaries, workers and volunteers. Mobile money makes this easy. The time and money saved can lower the cost of providing services and reduce concerns about carrying cash. Mobile money can also help programs reach more people and move away from paper systems that are less environmentally friendly.
How is FHI 360 using mobile money technology?
In Malawi, FHI 360 is implementing the Mobile Money Accelerator Program, funded by the U.S. Agency for International Development. We are testing models to increase mobile money enrollment and enhance product development and service delivery so that we can make mobile money sustainable. Through the project, we are addressing challenges on the supply and demand sides of the market. We are working with regulators to ensure that there is a business-friendly environment.
One of our largest programs in Zambia is experimenting with mobile money. The Zambia Prevention, Care and Treatment Partnership needs to provide small amounts of transportation funds to volunteer community health care workers so they can travel to the clinics or the neighborhoods where they provide services. This can be difficult to accomplish with cash. Volunteers often need to travel to an office to get in touch with the person who has the cash available, which is highly inefficient. Through mobile money, the project can get transportation funds to community health care workers quickly so that they can start their work without delays.
Why is FHI 360 well positioned to work on technology projects like mobile money?
In the development community, technology often lags far behind the commercial sector and, when technological innovations are applied, they are often designed by “techies” who do not fully understand the sectors their solutions are designed for. Our technology experts work closely with our experts in education, health, nutrition, gender, environment and research to develop more holistic and cost-effective solutions. This gives us a 360-degree perspective of development, allowing us to design multisectoral technology solutions that expand our reach, make our projects more efficient and increase their impact on target communities.