The digital financial services landscape in Nepal is changing, as the Nepal Rastra Bank starts issuing licences to non-bank payment service providers. Non-banks are actively engaging to set up agent networks and develop partnerships to co-create products, and many mainstream financial institutions are investing in new digital channels to deepen their services.
UNCDF-MM4P leaves Liberia but the country cannot be left behind
Broken lives and severed ties: the tragic reality of Liberia, where forgetting the 2014 epidemy is impossible. “Ebola is real” reminds a sign in Monrovia’s airport.
After two civil wars between 1989 and 2003 and the Ebola outbreak in 2014, Liberia is a country working to get back on its feet. 69% of the population live in extreme poverty, access to basic services such as health care, water and electricity is limited, particularly outside the country’s capital Monrovia, and there is lack of a middle class. Very rich or very poor, inequalities persist in this country where paved roads are a luxury for fancy compounds protected by barbed wire.
The country embarked on ambitious economic reforms that brought steady economic growth from 2005 to 2013. However, as a result of the Ebola outbreak, combined with a collapse in iron ore and rubber prices, Liberia’s economy came to a halt: closed businesses, barred schools, hospitals on tilt, travel restrictions, and a drop in foreign investments and trade. Between 2014-2016, the average annual growth rate of the country’s economy was 0%.
In 2013 UNCDF-MM4P launched in Liberia, a country with low banking penetration rates (3.2 bank branches per 100,000 adults) and 28% financial inclusion rate. With a primary focus of contributing to the development of an enabling environment for mobile money, the program worked closely with the Central Bank of Liberia (CBL) and GSMA to revise the Mobile Money Regulations to allow non-bank actors to enter the digital financial services (DFS) market, encouraging competition and interoperability.
But before activities could really take off, the Ebola outbreak occurred and the travel and assembly restrictions forced UNCDF-MM4P to cease its projects. The Programmme and the Better Than Cash Alliance joined forces with the United Nations Mission for Ebola Emergency Responses and shifted focus on digitizing payments to healthcare and other response workers. From early 2015, UNCDF had no presence on the ground in Liberia until May 2016, when the MM4P program reengaged in the market and stationed a full-time DFS Expert in Monrovia, Mr. Ali Akram.
Since then, UNCDF-MM4P has stimulated the DFS market and coordination among stakeholders by promoting partnerships, dialogue and awareness in a previously fragmented and uncoordinated DFS ecosystem that could not reach beyond the capital city. Today, Liberia is member of the Better Than Cash Alliance with a financial inclusion strategy, and regulators are enthusiastically seeking to learn from other countries and private actors. To facilitate dialogue, UNCDF-MM4P helped establish the DFS Working Group, a platform that brings together the DFS stakeholders to identify and address the challenges faced by the sector, and where the two DFS operators sit at the same table despite competition. As Massa Dennis, Senior Manager of Mobile Money at Lonestar, summarized:
There are challenges that are worthwhile addressing together, but given the competition in the market, Cellcom (Orange) and Lonestar would not have sat at the table together and have a meaningful discussion without the Working Group.
Another example of increasing integration is the CBL National Electronic Payment Switch commissioned in July 2016, which hosts four member banks that share their ATM networks; interbank fund transfers and bill aggregation services will soon be added. Moreover, the Agent Banking Regulations issued by CBL in April 2017 allow financial institutions to leverage agents to distribute their services more widely and cost effectively.
Between 2016-2017 UNCDF-MM4P also assisted BRAC Liberia, the largest microfinance provider in the country, to prepare and successfully launch a mobile money loan collection service. The customer uptake of the service has grown ever since, showing the appetite for DFS in Liberia.
The participation of Massa Dennis from Lonestar to the #DFS4Women event, organized by UNCDF-MM4P, inspired the launch of the MoMo Market Women Initiative. The initiative aims at reducing the gender gap in the uptake and usage of mobile money. Regarding the event, Ms. Dennis said “The event was an eye opener. In this sector, we don’t talk about gender, and it never occurred to us that there is a value proposition in focusing on women”.
To facilitate the shifts from cash to digital payments, specifically those that are performed regularly in one batch, UNCDF-MM4P conducted an analysis of high-volume (or bulk) payments flows in Liberia. The resulting diagnostics will enable the development of evidence-based policies and business models as well as provide a baseline for tracking the evolution of digitization in the country.
UNCDF-MM4P also supported Lonestar and the Ministry of Finance and Development Planning to sign a memorandum of understanding for payment of civil servant salaries through mobile money. Compensation of employees account for more than 50% of Liberia’s recurring budgetary expenditure, and government payments form a large component of high-volume payments. Shifting these payments to digital will accelerate the speed towards Liberia becoming cash-lite.
Overall, the DFS market in Liberia has made significant progress between 2014 and June 2017. The percentage of adult population with an active registered DFS account has risen from 0.6% to 11% and agent distribution has improved from less than 1 to 29 per 100,000 adults. However, the market is still very much at the beginning stages of development. Products offered in the market are restricted to basic first generation and providers are struggling to deploy an active agent network, particularly in rural areas. Poor infrastructure, lack of DFS awareness and low levels of financial literacy are still major obstacles regulators and providers are facing.
It is with great reluctance that we announce that the UNCDF-MM4P programme will not be in-country to support further development. A lack of funding meant the Programme has had limited resources and time to support Liberia to build a robust DFS ecosystem. We will continue to pursue different avenues for funding but, at present, there are no clear medium or long term options to make a true impact with our current partners.
Even though it is too early to say how these efforts will translate into further progress of the DFS market and increases in the adoption and usage, the achievements are a testament to the potential of DFS in Liberia as well as the appetite of stakeholders in the country. The DFS sector in Liberia requires continued support not only to accelerate its development but also ensure that growth is equitable and targets poverty alleviation.
The Programme would like to thank all the stakeholders for the fruitful collaboration, in particular the Government of Liberia.
UNCDF hopes that the bond we have made with this country will continue despite MM4P’s disengagement. As a first step, Liberia will be invited to participate in the Better Than Cash Alliance peer exchange on e-government hosted in Rwanda next October.
We are open to staying and we welcome ideas on how to continue to fund our presence for the longer term. Liberia cannot be left behind.
 International poverty line of US$1.90 per day
 BRAC entered Liberia in 2008 with UNCDF-MicroLead support.
Time for Action
Never have there been so many displaced people as now. People fleeing their homes in search of safety. Many displaced hope to find this safe haven in Uganda. The country currently hosts 1.2 million refugees, 72% of whom - mainly women and children - are from South-Sudan.
Last month, the UN Secretary General António Guterres visited Uganda to co-host the Solidarity Summit on Refugees. This summit was called to translate the New York Declaration Commitments into action. And action is needed because, since last year, over 900,000 refugees, primarily from South-Sudan, have fled to Uganda.
Together with the UN Secretary General around 200 high-level international guests attended the summit and visited the settlements in Northern Uganda. Amongst them was also the Belgian Deputy Prime Minister and Minister for Development Cooperation, Alexander De Croo. With a small team and journalists from Belgium, De Croo visited both South-Sudan and Uganda as the Belgian Government supports several projects providing humanitarian assistance to the refugees in Uganda.
During the last day of his visit, De Croo also had the chance to meet with several Ugandan stakeholders that use digital solutions to spur the development of Uganda. Not only is De Croo Minister for Development Cooperation, but also for the Digital Agenda, therefore he is a strong supporter of the use of digital solutions to advance the UN’s Sustainable Development Goals.
During this meeting, the UN Capital Development Fund’s programme Mobile Money for the Poor (UNCDF MM4P) presented an online financial inclusion dashboard that has been developed with support from the Government of Belgium, using the data records from the two biggest mobile network operators (MNOs) in Uganda: MTN and Airtel. This dashboard has been developed by Dalberg Data Insights and it gives real-time insight on the penetration and usage of mobile money in the country. It provides a very detailed overview per district and even per MNO cell tower on how many people have a mobile phone, whether they are using mobile money and what their activity rate is. This application directly shows the impact of UNCDF’s projects on financial inclusion, with special focus on Ugandans living in rural areas.
UNCDF is also supporting the digitization of cash-based interventions (CBIs) for refugees in Bidi Bidi. Instead of cash, which is being driven by a van into the settlements, refugees as well as members of the host communities can now receive this supplement digitally on their mobile money account. In order to successfully implement digital CBIs, UNCDF MM4P works with its partners DanChurchAid and MercyCorps to build a digital ecosystem to enable the digitization of these transfers. Concretely, this means that UNCDF engages with the MNOs to ensure that there is sufficient mobile network coverage, and that it assists in the roll out of a network of mobile money agents that maintain sufficient cash levels to sustain withdrawals by refugees whenever they receive mobile money.
These disbursements may be small but are very important to the recipients. Once refugees receive them digitally, this opens the door for other use cases for digital financial services, such as access to mobile savings and loans, but also to affordable Pay-Go Solar Power Systems. “Cash transfers to refugees are increasingly being adopted by humanitarian and development organisations as they are a catalyst for local economies to grow, especially enabling host communities to benefit from the growing local economy that comes with the influx of refugees. Mobile money fits in perfectly as it not only ensures safe and secure cash transfers to beneficiaries, but also because of the additional services like the ability to save using a mobile phone”, says Ronald Rwakigumba, Uganda Country Coordinator, Agri-Fin Mobile, at MercyCorps.
By Naomi de Groot and Bram Peters, UNCDF MM4P in Uganda.
Consultative Workshop on Digitizing National Retail Payments Systems
A three-day workshop conducted by Nepal Rastra Bank (NRB), the central bank of Nepal, convened participants from mainstream financial institutions, non-bank payment service providers, infrastructure actors and government ministries and regulators. The purpose of the workshop was to discuss the status of adoption of retail payments in the country, particularly digital payments, and the gaps that persist in the market that relate to customers, providers, infrastructure and policy.
The workshop, led by NRB and facilitated by the United Nations Capital Development Fund programme Mobile Money for the Poor, supported a larger objective of NRB regarding payment systems. With the establishment of a payment system department at NRB, the central bank is spearheading the development of a National Retail Payment Strategy. The strategy will internally guide its policymaking objective and will serve externally as a tool to communicate NRB’s policy priorities. The strategy sets out NRB’s vision as the custodian of payment systems in Nepal, and what it aims to achieve in the coming years :
- Promote the development of a secure, healthy and efficient system of payments
- Reduce barriers for retail payment services and other retail financial services
- Level the playing field and provide flexibility in the market to promote innovation
- Ensure an effective yet proportionate approach to consumer protection
- Achieve sustained rapid growth and large-scale volumes
On the first day of the workshop, participants from commercial banks and other banking institutions, such as development banks, spoke about their support and inclination towards digital financial services (DFS). It was clear from the first round of discussions that, despite having a positive view of DFS and mobile banking platforms, certain segments of customers (mainly rural and above the age of 45) are still unwilling to shift from using cash to DFS. However, there was a strong consensus from bankers to work cohesively to address this reluctance and to build a digital system that is not only for young, well-educated urban Nepal but for Nepal as a whole in order to achieve the main goal of DFS, which is financial inclusion for all.
The second day of the workshop hosted non-bank payment service providers. The main theme of discussion was the need for more lenient and liberal policies and regulations from the central bank for providers in Nepal. One participant expressed his perception of the current situation by saying, “Fast-pace regulations around DFS in Nepal would help companies like us to forge and foray into the digital revolution that the financial sector of Nepal is open to.”
The third day of the workshop saw the meeting of regulators and government ministries, which included representatives from NRB, Ministry of Finance and Nepal Telecommunications Authority, among others. The main theme of the final session was to address the queries raised by commercial banks and providers regarding the policies and regulations that at times inhibit the scalability and scope of DFS. The officials addressed the matter by saying that their respective organizations are focused on aligning their internal strategies to enhance the outreach of DFS in Nepal. This alignment will translate through refined policies that will pave the way for banks and other agencies to deliver DFS at a simpler but much larger scale.
July 2017. Copyright © UN Capital Development Fund. All rights reserved.
The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNCDF, or their Member States.
 These are only general outcomes that every regulator aims to address and are not specific to this context. The outcomes are based on the following sources:
European Central Bank, ‘Harmonised oversight approach and oversight standards for payment instruments’ (Frankfurt, 2009). Available from https://www.ecb.europa.eu/pub/pdf/other/harmonisedoversightpaymentinstruments2009en.pdf ;
Harish Natarajan and others, Developing a Comprehensive National Retail Payments Strategy: Consultative Report (Washington DC, World Bank, July 2012). Available from http://siteresources.worldbank.org/FINANCIALSECTOR/Resources/282044-1323805522895/Developing_a_comprehensive_national_retail_payments_strategy_consultative_report(8-8).pdf; and UNSW, ‘Regulatory Diagnostic Toolkit for Digital Financial Services,’ 21 September 2016. Available from https://clmr.unsw.edu.au/resource/digital-financial-services/regulatory-diagnostic-toolkit-for-digital-financial-services-
 Since all retail payments by nature are high-volume, low-value transactions, the transition to electronic transactions can only be achieved if the business case for such a transition exists for different stakeholders. Since a large part of this transition depends on the level of trust by the customer, which builds over time, and since the relative cost of setting up the infrastructure is high, the economy of scale is an important factor that drives this transition to sustainability.
Making mobile money more attractive to farmers
In 2015, UNCDF MM4P partnered with Kyagalanyi Coffee Ltd (KCL), a leading coffee exporter in Uganda, to digitize the payments to its 7,000 farmers around Mount Elgon. As part of this effort UNCDF MM4P, in collaboration with CGAP, contracted PHB Development to analyse the attractiveness of digital payments versus cash for stakeholders in the coffee value chain. For that purpose, PHB introduced a new approach that compares the cost of cash with the cost of digital payments for every transaction smallholder farmers and coffee traders engage in. PHB gives a name to this new approach Value Proposition Mapping (VPM), which is based on a methodology derived from accounting: Activity Based Costing.
Farmers and traders were interviewed to map their market behaviour, all their sales and purchases and where these took place. Next, for each transaction the associated costs were calculated.
Ciprian Panturu, Digital Financial Services Expert at UNCDF MM4P, explains: “If we look at payments from KCL to farmers at coffee collection points for example, the cost of cash for an average farmer is around UGX 27,000 per transaction. This includes the costs of transportation, time and the perceived risk of carrying cash back to the farm. If farmers are paid with mobile money, the cost would be reduced to around UGX 3,500 per transaction. Farmers would only have to pay for cash-out at a mobile money agent, something that is done frequently.” While this looks like a great value proposition at first sight, the situation is more complex.
“Farmers will still need to travel to the collection points even if they are paid with mobile money, simply because they need to supervise the weighing and grading of their coffee. And ensure they get the best price for their product. So, if farmers still have to travel, even when being paid digitally, the actual cost of cash is much lower, around UGX 3,500. Cash is also more versatile and the cost associated to the risk of carrying it, although acknowledged, remains theoretical.” says Ciprian.
“The analysis shows that farmers have a hard time spending the money on their mobile wallet. In some cases, they can pay school fees using mobile money or they use it to send remittances to family members, but those are limited use cases. It simply doesn’t make sense for them to pay for farm inputs or food with mobile money,” according to Ciprian. UNCDF and its partners in this project are using such insights to find ways to enhance the mobile money ecosystem. It is one thing to pay people digitally, it is another for these farmers to make their everyday payments digitally.
Nathan Were from CGAP thinks that the data collected during the VPM exercise is very valuable. “This information can be used as leverage to talk to MNOs [mobile network operators] about their current business models. Most MNOs are making profit from remittances cash-outs.” However, according to Nathan, “Mobile money can become an attractive alternative to cash, provided that merchant registration is made easier and accessible, and pricing is adjusted. When for example farmers are able to pay for their daily shopping with mobile money, digital payments can be perceived more positively, with tangible benefits for all users. Bringing a sense of security and access to financial services for people in rural Uganda, this is our ultimate goal”.
The data collected is currently being used to design new business models with the leading MNOs in Uganda to unlock the potential for day-to-day use of digital payments beyond just remittances.
By Páll Kvaran, Research Associate at PHB Development and Bram Peters, Technical Specialist at UNCDF MM4P in Uganda
SL FinTech Challenge 2017: Market Engagement Session
The Sierra Leone FinTech Challange 2017 in partnership with the SL FinTech association is organizing a Market Enagement Session with a critical use-case for fragile markets- Conditional & Unconditional Cash Transers.
The event is scheduled on:
JULY 6, 2017
2:00 PM- 3:30 PM
ACDI/VOCA OFFICE at HILL STATION, OFF
FinTechs and partner financial institutions will hear from Cash Transfer Working Group, a sub-set of the Food Security Sector using cash to address food seurity needs in Sierra Leone. In Sierra Leone, over 3.5 million people are food insecure, without access to a sufficient amount of safe and nutritious food. This is also the volume of people that the Cash Transfer Groups face significant challenges in delivery cash-assistance to.
The distribution will provide valuable insights to the FinTechs and overall financial inclusion industry on designing and piloting tech-based solutions for reaching the vulnerable households in cost-effective, timely, and convenient ways which can also result in greater financial inclusion.
Strengthening the capacity of Benin’s banks in digital finance
The UNCDF’s programme MM4P, organized two days of training for banks on June 7th and 8th, at the Benin Royal Hotel, as part of the implementation of its 2017 annual work plan.
The aim was to share with the banks of Benin tools and best practices which can help them initiate and develop digital finance products and services.
The banking sector in Benin is in a new dynamic with the multiplication of initiatives to develop alternative distribution channels to get closer to clients, and to target new customers using digital tools. These training workshops are timely, to guide Benin banks shifting effectively in this new dynamic.
"These two days of exchanges have proved the great interest of Benin’s banks on developing digital financial services. Participants paid great attention to the presentations done by guest speakers from Equity Bank of Kenya and Fidelity Bank of Ghana who shared their experiences in digital finance. "said Jamelino Akogbeto, Digital Finance Services Expert for MM4P in Benin.
This interest clearly displayed by the banks points to a real opportunity of collaboration, and as a next step, banks will submit their digital finance projects to MM4P evaluation. The most promising projects will benefit from MM4P technical assistance for implementation.
The MM4P Program was launched in Benin on 6 October 2015 to contribute to increase the active use of digital financial services up to 122 of the adult population of Benin by 2019.
About Mobile Money for the Poor (MM4P)
MM4P is a global programme funded by UNCDF, the Swedish International Development Cooperation Agency, the Australian Department of Foreign Affairs and Trade, the Bill & Melinda Gates Foundation and The MasterCard Foundation. The programme provides support to branchless and mobile financial services in a select group of Least Developed Countries to demonstrate how the correct mix of financial, technical and policy support can build a robust branchless and mobile financial services ecosystem that reaches low income people in these countries.
Please visit www.uncdf.org/mm4p or follow @MM4P1
The United Nations Capital Development Fund (UNCDF) is the UN’s capital investment agency for the world’s 48 least developed countries. It creates new opportunities for poor people and their small businesses by increasing access to microfinance and investment capital. UNCDF programmes help to empower women and are designed to catalyze larger capital flows from the private sector, national governments and development partners, for maximum impact toward the Millennium Development Goals.
For more information, please visit www.uncdf.org, follow @UNCDF and UN Capital Development Fund, and subscribe for news.
About The MasterCard Foundation
The MasterCard Foundation is an independent, global organization based in Toronto, Canada, with approximately $9 billion in assets. Through collaboration with partner organizations in 46 countries, it is creating opportunities for all people to learn and prosper. The Foundation’s programs promote financial inclusion and advance youth learning, mostly in Africa. Established in 2006 through the generosity of MasterCard Worldwide when it became a public company, the Foundation is separate and independent from the company. Its policies, operations and funding decisions are determined by its own Foundation Board of Directors and President and CEO.
For more information, please visit www.mastercardfdn.org or follow @MCFoundation
These two days of exchanges have proved the great interest of Benin’s banks on developing digital financial services.
Benin - Ateliers de formation en finance digitale pour les banques
Le Programme MM4P lancé au Bénin en 2015, par l’Agence d’investissement des Nations Unies (UNCDF), a organisé les 07 et 08 juin au Bénin Royal Hôtel, une série d’ateliers de formation pour les banques, dans le cadre de l’exécution de son plan annuel de travail pour 2017.
L’objectif visé à travers ces ateliers est de doter les acteurs du système bancaire d’outils et de compétences pour initier et développer des produits et services en finance digitale.
Le secteur bancaire au Bénin, est dans une nouvelle dynamique avec la multiplication d’initiatives visant à développer des canaux alternatifs de distribution pour se rapprocher des clients actuels, mais surtout cibler de nouveaux clients en utilisant des outils technologiques. Ces ateliers de formation viennent à point nommé, pour permettre aux banques d’être mieux outillées pour amorcer un virage stratégique de façon efficace.
« Les échanges de ces deux jours d’atelier nous ont prouvé le grand intérêt que portent les banques du Bénin au développement de services financiers digitaux. Les participants ont porté une grande attention aux présentations des orateurs venus de Equity Bank du Kenya et Fidelity Bank du Ghana, venus partager leurs expériences en finance digitale. » a confié Jamelino Akogbeto, Expert en Finance Digitale pour MM4P au Benin.
Cet intérêt clairement affiché par les banques ouvre donc la voie à des perspectives de collaboration. Ces dernières ont soumis des projets qui seront évalués par MM4P, qui pourra par la suite faire un diagnostic et voir dans quelle mesure accompagner leur mise en œuvre.
Le Programme MM4P a été lancé au Bénin le 6 octobre 2015. Il vise à contribuer à l’accroissement de l’utilisation des services financiers digitaux pour atteindre plus de 12% de la population adulte du Bénin d’ici 2019.
A propos de Mobile Money for the Poor (MMP4)
Le programme Mobile Money for the Poor (MM4P) de l ‘UNCDF est actif au Bénin, au Sénégal et en Zambie en partenariat avec la MasterCard Foundation. Le programme appuie le développement de la finance digitale pour démontrer comment le bon dosage de soutien financier, technique et réglementaire permet de mettre en place un écosystème durable de banque à distance et de services mobiles qui soit à même de servir des personnes à faible revenus dans les pays les moins avancés.
A propos de l’UNCDF
L'UNCDF (United Nations Capital Development Fund) est l'agence d'investissement de l'ONU pour les 48 pays les moins avancés au monde. Elle offre aux personnes pauvres et à leurs petites entreprises de nouvelles opportunités en augmentant leur accès à la microfinance et aux capitaux d'investissement. Les programmes de l'UNCDF aident à renforcer la position des femmes et sont conçus pour favoriser de plus grands flux de capitaux pour le secteur privé, les gouvernements nationaux et les partenaires de développement, et avoir ainsi un maximum d'impact sur les objectifs du Millénaire pour le développement. Pour plus d'information, rendez-vous sur www.uncdf.org
À propos de la MasterCard Foundation
La MasterCard Foundation est une organisation internationale indépendante basée à Toronto, au Canada, gérant un actif de plus 9 milliards de dollars. En s'associant à d'autres organisations partenaires dans plus de 46 pays, elle permet de créer des opportunités d'apprentissage et de développement pour tous. Les programmes de la MasterCard Foundation favorisent l'inclusion financière et l'apprentissage chez les jeunes, principalement en Afrique. Établie en 2006 grâce à la générosité de MasterCard Worldwide lorsqu'elle s'est transformée en entreprise publique, cette fondation reste indépendante de l'entreprise. Ses politiques, opérations et décisions de financement sont déterminées par le conseil d'administration et le président-directeur général de la fondation. Pour plus d'informations, rendez-vous sur www.mastercardfdn.org ou suivez @MCFoundation
Les échanges (...) ont prouvé le grand intérêt que portent les banques du Bénin au développement de services financiers digitaux
Nepal - Let’s talk about digitization
A consultative workshop held at Summit Hotel brought together stakeholders to discuss a proposed Social Security e-Payments Strategy in Nepal. The workshop served as a platform for stakeholders to share their input on the proposed strategy and implementation plan, before it is finalized and tabled for approval by the Government of Nepal. The workshop was organized by the Department of Civil Registration (DOCR) working under the Ministry of Federal Affairs and Local Development and in collaboration with the World Bank, United Nations Capital Development Fund (UNCDF), Mobile Money for the Poor and Local Governance and Community Development Programme Phase II.
The Government of Nepal has been providing social assistance to its citizens for more than 15 years. The annual number of beneficiaries now exceeds 2 million, and the types of social security allowances (SSAs) currently include a Senior Citizen Allowance, Single Woman Allowance, Disability Allowance, Endangered Ethnicity Allowance and Child Protection Grant. These grants are currently delivered manually to beneficiaries in cash through a complex institutional framework. The manual process to deliver SSA payments, which comes at an annual cost of Nr1.327 billion (~US$13 million), presents some serious disadvantages, such as errors in recordkeeping due to ghost beneficiaries and system leakages.
DOCR plans to transition from manual to electronic payments, championing a vision for the country where efficient SSA distribution ensures the right amount to the right person at the right time.
The transition aligns with a government directive to transfer all SSA payments through bank accounts. In this context, the World Bank and UNCDF are providing technical assistance to DOCR to develop and implement an e-payments strategy.
The consultative workshop brought together representatives from the Ministry of Finance, Nepal Rastra Bank (the country’s central bank), Financial Comptroller General Office and financial institutions, among others. It kicked off with a presentation of a draft strategy agenda that touched upon the scope of the e-payments strategy in building institutional capacities and partnerships to create an ecosystem with the infrastructure to support widespread cashless payments to SSA beneficiaries and ultimately to work towards a less cash-dependent society. Stakeholders raised questions about banking interventions that are necessary for building such a system. They also identified banked and unbanked areas in each region of the country in order to map out potential hubs to support agents located in various branches, branchless banks and payment service providers.
The workshop came to an end with closing remarks from the DOCR Director General:
“Digitization of social security allowance[s] in Nepal is going to re-structure our payment system. The questions and issues raised by our stakeholders today will not go unnoticed; they will be further discussed in our Steering Committee meeting. I thank UNCDF for organizing this meeting and for their support and guidance towards this project.” With this, the hope of establishing an effective, efficient, transparent and centralized SSA payment mechanism has been set in motion.
June 2017. Copyright © UN Capital Development Fund. All rights reserved.
The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNCDF, or their Member States.
Digitization of social security allowance[s] in Nepal is going to re-structure our payment system
Quick tests, fast results, strong signals
In a previous blog, we focused on how human-centric design approach was used to co-create ideas with Airtel Money agents. In this blog, we will talk about what followed next, the process of setting up behavioral trials and iterative testing.
Following the process of ideation and co-creation with the Airtel Money agents, 17 Triggers and UNCDF were left with several ideas to test, to determine which ones could become viable solutions to address the liquidity management challenges that agents were facing. The ideas were ranked in order of desirability (is this something the agents want), feasibility (do the providers have the technology and processes in place to support such an idea) and viability (will the resulting solution be cost effective).
Setting up behavioral trials
Once the top three ideas were selected, the research team went about setting up behavioral trials where agents would be exposed to prototypes of the ideas they had helped co-create, for a short period of time in a setting that mirrored their everyday experiences. During the trials, the agents’ interactions with the prototype and any changes in their behavior and actions would be recorded and analyzed. This analysis would help determine the impact the introduction of the intervention is likely to have once it is fully implemented in the agents’ daily practices.
To design the trials, the research team scouted different locations and reviewed the profiles of various agents in each of these locations. With input from Airtel, the team settled on 3 locations where each of the 3 concepts that made the final ranking list would be tested with a group of 10 agents for a period of 3 weeks. The 3 week time frame was chosen because it was a relatively quick time frame to get results but long enough for the agents involved in the trial to get past the initial novelty of the interventions and allow the research team to understand actual usage patterns that emerged.
Iterative testing in the field
When it comes to the human-centric design approach, a key part of the behavioral trials is the iterative testing process. This is a process by which every idea, concept, intervention goes through a process of continual testing and tweaking using observations and feedback gathered from the test subjects to inform subsequent iterations of the concept. Airtel appreciated this process because they were able to get fast results and strong signals.
For instance, prior to the start of the trials agents were asked to agree on the set of norms that would govern their interactions with each other and the provider for one of the concepts tested. However, in practice, the research team observed new norms emerge. This provided an opportunity for them to check in with the agents to ascertain what was going on and how this new set of norms could be incorporated into the product design. The iterative testing process also allowed the research team to quickly uncover what tools worked and which ones did not work when it came to testing tools for customer perception and float awareness.
When it comes to employing behavioral trials and iterative testing methods, the key things for providers to focus on are that
- It is quick and yields fast results. Testing periods can be relatively short e.g. a couple of weeks, as long as they allow enough time to observe changes in behavior due to the introduction of an intervention or a change in the normal working process
- Helps identify strong signals that draw the providers attention to areas that need to be addressed for proposed solutions to be as effective as possible.
Stay tuned for the next blog where we delve deeper into one of the concepts that was tested, the results gained from applying human-centric design and iterative testing to understanding agent journeys and prototyping products with constant agent feedback.