Like many countries, cash is an extremely common form of monetary transaction in Bangladesh, including among U.S. Agency for International Development (USAID) implementing partners. Paying for something as basic as participant expenses at workshops, for example, often entails a finance person from Dhaka, the capital, traveling to rural communities with a bag of cash to make disbursements directly. This method is costly (in terms of travel and per diem costs for the cash runner) and risky (in terms of potential for theft and graft) and can result in lost productivity.
The introduction of mobile money to Bangladesh in 2011 changed this equation by making it possible for implementing partners to send money directly to individual program participants and staff without leaving their desks in Dhaka. Mobile money is an emerging technology that provides convenient and affordable financial services through use of a mobile phone.
Having the option of using mobile money is great, but making the change to any new technology or process is rarely easy. And, unfortunately, there is no one-size-fits-all solution. Finding the right mobile financial service for a project’s needs is crucial but not the end-all. Staff and program participants need to understand the benefits of mobile money and feel comfortable using it.
Through the Mobile Solutions Technical Assistance and Research (mSTAR) project in Bangladesh, funded by USAID, FHI 360 is helping local implementing partners overcome the hurdles to transitioning from cash to mobile payments through a mix of raising awareness and providing technical assistance and small grants. We are building more informed and confident users, from early adopters to those on the fence, by clearly explaining mobile money product offerings and helping them assess its benefits.
On April 15, 2014, FHI 360’s mSTAR project signed fixed obligation grants with two local USAID implementing partners to further initiate the transition from cash to mobile money payments. These one-year grants will enable nongovernmental organizations implementing existing USAID projects to move away from cash payments. Beyond the potential reduction of risk and cost for both organizations, the transition to mobile money will increase the financial inclusion of their beneficiaries in a country where less than half of the population has access to formal financial institutions.
It is still the early days of this project, but there are promising signs of progress. Seventeen implementing partners have come to our first two workshops, and several are already planning to start the transition to mobile money with our support, including one who recently opened an account with one of our infosheets in hand.