Mobile Money in Haiti: Realizing the promise of a complex new industry

Posted: January 17th, 2012  |   viewed: (1,199)  |   Comments: ( 1 )  |  Topic: Blog Post  |  

Share: By Dalberg

By Vicky Hausman, Yana Watson, Matt Shakhovskoy and Lorenzo Bernasconi from Dalberg – Global Development Advisors.

In the aftermath of the earthquake in January 2010, organizations hoping to help Haiti recover were anxious to find innovative ways of delivering aid and fostering economic growth.  Because so few of Haiti’s people had bank accounts, giving them money was logistically difficult and potentially dangerous.  With the encouragement of a $10 million prize pool funded by the Bill & Melinda Gates Foundation, the government, private sector, and aid community embraced mobile-phone-based banking as the solution.  Since its launch a year ago, mobile money has offered millions of Haitians a safe and speedy way to transfer money, as well as their first experiences with a formal financial instrument.  Now, the companies providing the service are trying to figure out how to expand it in a profitable way.

Demand for mobile money to date has come from consumers and from the non-government organizations (NGOs) that use mobile money to distribute monetary aid and to pay people in cash-for-work programs.  Indeed, six out of the 14 aid programs that use mobile money in the entire world are operating in Haiti.  These aid programs may not last forever, though – some NGOs have even found that delivering paper money is cheaper – so demand from consumers will be critical.  In addition, high fees, a lack of financial literacy, and regulatory limits on the size of transactions consumers may make could stop demand from growing much further.

According to our research, the key to overcoming these barriers will be to make the services more attractive and affordable.  interoperability between the two consortia’s services would be a start, and a relaxing of regulation on transactions would help as well.  The creation of new services that build on the mobile money platform, such as e-commerce and bill payment, would also enhance its value.  And the mobile network operators who deliver the service may wish to focus on specific segments of Haiti’s economy as they try to build their market in a profitable way.

To read more about the state of the mobile money industry in Haiti and the conclusions of Dalberg’s research, please visit this link in the MMU Library.