Day 1

Day 1

Digitizing high volume payments: The key to financially include women?

Day 1

Digitizing high volume payments: The key to financially include women?

October 24 , 2016
Kampala, UGANDA - 

When it comes to digitizing bulk payments, scale is often considered the only thing that matters. No doubt scale is essential—but what if the obstacles to receive the payments are so significant that women can not readily participate? This major challenge loomed over the discussion of benefits of high volume payments for women in the break-out session that opened the #DFS4W event organized by UN Capital Development Fund (UNCDF) in Kampala, Uganda, today. The gap between assumptions and reality on the ground is stark. Indeed, there is currently much hype amongst digital financial service (DFS) experts on how shifting one-to-many transactions to digital has the potential to drive down costs and increase efficiency. For policymakers implementing social protection programmes and aid practitioners rolling out cash transfer initiatives, digitizing high volume payments is a quick and efficient solution for transferring money in a high number of digital wallets at once. For DFS providers creating the infrastructure through which the payments are funnelled, bulk payments are a powerful driver for the adoption of more advanced products. Yet the emphasis on volume often eclipses the fact that not all recipients are on the same footing.

Gender is a major factor in defining the capacity to access and benefit from digital cash transfers. It is a kind of paradox: after all, the main goal of cash transfer programmes, rolled out by either governments or non-governmental organizations, is to smooth consumption and sustain the livelihoods of precisely the most economically vulnerable citizens. In low-income countries, women largely feature in this category. Discussing access to financial services in India, Kenya and Mexico, for instance, Julie Zollmann found that women’s incomes are generally smaller than men’s. Also, women go through many different life transitions as they leave their paternal household, marry and have children, and face greater risk of sudden pauperisation, for example if widowed. This situation is compounded by legal, cultural and economic restrictions, such as applying for a national ID or getting a loan from a bank, that women face in 155 countries, according to a study by the World Bank. DFS have a smaller gender gap than banking, and opening a mobile money account is a more viable option for women than opening a bank account. However, barriers are still there. And they hinder the possibility for cash transfer payments to have a real impact on women’s livelihoods and for DFS providers to reach out to a sizeable, yet neglected, segment of the market.

These limits emerged from discussion triggered by the presentation of two experiences of high volume payments through mobile money during a break-out session: (1) a Bulk Payment Initiative for farmers in Uganda, designed and implemented by Yo! Uganda, a Kampala-based fintech with the support of UNCDF; and (2) the Programme National de Bourses de Sécurité Familiale (PNBSF), rolled out in Senegal by a partnership of Orange, one of the country’s most popular mobile network operators, and the Senegalese Government.

To understand both projects, it is necessary to have a look at the broader picture.

Let’s begin with the Bulk Payment Initiative for farmers. It targets the workers of Kyagalanyi Coffee Limited, a coffee producer and exporter in the Mount Elgon area of Eastern Uganda. The importance of this agricultural sector for the Ugandan economy is hard to underestimate. Indeed, coffee is the country’s main cash crop. Its value chain benefits around 1.7 million people, making for a huge amount of payments regularly flowing between farmers, traders and coffee export companies. Cash is king in this market, but in September 2015, UNCDF signed an agreement with Mobile Telephone Networks (MTN) and Kyagalanyi to pilot digital payments for coffee farmers in the Elgon area. Yo! Uganda, a company with experience as an aggregator of digital payments, was then contracted by Kyagalanyi to design a comprehensive mobile bulk payment platform. The Bulk Payment Initiative for farmers was launched as a pilot project with a two-fold aim: on the one hand, it digitized payments to increase security by reducing the volume of cash; on the other, it enabled recipients to keep track of their transactions and thus create a credit score to apply for loans. The company provided low-cost mobile handsets and distributed the payments by household. However, Yo! Uganda soon realized that, since households are mostly headed by men, the payments failed to reach women, despite the fact that they constitute over 50 percent of the workforce. As it is heading towards the second phase of the project, Yo! Uganda is using the lessons learned to modify its approach and target women as individual workers, rather than members of household.

PNBSF is based on different premises and uses a different approach. It is a social protection programme in which Orange facilitates government-to-people payments to 35,000 beneficiaries across Senegal. The main challenge in this case was to disseminate information in remote areas of Senegal, with no network coverage and low literacy. The strategy used by Orange was to have agents travel to rural communities where, with the help of local leaders, they presented the service and assisted the beneficiaries, most of whom were women, to open an Orange Money account on their mobile phones. There, cash also dominates the local financial landscape. Beneficiaries tend to cash out when they receive the payments (for instance, to pool money in saving clubs); therefore, the quarterly delivery of e-cash must be supported by a periodical distribution of cash to local agents. Orange is currently enrolling merchants accepting digital payments for basic goods and thus laying the groundwork for the construction of a digital payment ecosystem. However, the company is aware that, for the time being, cash is here to stay. And DFS providers that want to cater to the needs of women have to take this fact into account.

 

 

October 2016. 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 the views of UNCDF, the United Nations or any of its affiliated organizations or its Member States.

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Understanding the barriers and serving the needs of women with DFS

Day 1

Understanding the barriers and serving the needs of women with DFS

October 24 , 2016
Kampala, UGANDA - 

Facilitating women’s access to digital financial services (DFS) is an opportunity for the private sector to engage in gender equality. This is how Rosa Malango, UN Resident Coordinator in Uganda, opened the latest Partner Event of the Mobile Money for the Poor (MM4P) conference #DFS4W, today in Kampala, Uganda. Ms. Malango devoted particular attention to the significance of the UN Gender Equality Seal, which has been endorsed by 13 companies since its announcement in August, to align the Sustainable Development Goal of supporting women with the interests of the private sector in the name of women’s financial empowerment.

The first breakout session of the event, ‘Tapping into the 51%—Understanding the barriers and serving the needs of women,’ provided further food for thought on this topic, as the participants were invited to reflect on obstacles, barriers and challenges facing DFS providers in order to identify viable solutions for improving how women receive, use and benefit from DFS.

In an effort to unpack the barriers that confront women in regards to DFS, it became evident that a self-assessment by providers is a key element to understanding where to begin. Several self-assessment questions are key to gauging providers’ state of readiness to address women with their DFS offerings. Organizations benefit from knowing the current state of data and ability to disaggregate current users based upon gender. Overall knowledge of the gender differential regarding mobile ownership or bank account access in their market and their institutions' willingness to conduct research regarding gender-specific strategies can strengthen their offerings.

In order to get closer to understanding the actual financial lives and needs of female clients, the participants collaborated in an atypical case study exercise. Rather than reading a flat case study and holding a discussion, participants engaged in a ‘build your own adventure’ exercise wherein each decision made by the group on behalf of a fictitious but representative woman revealed the real challenges of a woman when considering when and how to engage with financial services.

Most notably, participants came to understand the nature of women’s engagement with financial services; unlike men, who typically enter their working life and maintain their earning potential for a sustained period, women have a different experience. It is often interrupted by significant key phases in their economic lives—from childhood to young adulthood, from marriage to pregnancy. The experience of a new mother is different from the various financial shocks or disruptions that may follow as the woman matures and then grows old.

In each of these phases, the female client may enter (or temporarily suspend) a period of earning capacity and financial services activity. Women experience cyclical relationships with banking and finance and often have interrupted livelihoods.

With these phases in mind, there are opportunities for specific and targeted products or elements that operators can deploy to make access to financial services more universal and therefore accessible to women.

Many of the barriers identified for women are universal to men, like proximity to services and reliability of network and infrastructure. Other barriers are linked to the fact that women’s earning is generally lower than men’s and that leads to more frequent but smaller transactions. Mobile phone ownership is lower amongst women as is financial and basic literacy. When they are actively earning money, women’s funds tend to support the daily needs of the household and education of children, which translates to a casual income and does not contribute to a credit history that may put a collateralized loan or other financial service out of reach. Occasionally, women are suddenly thrust into being the breadwinner, without an income history or understanding of financial services and how to avail of them.

By being mindful of these barriers, providers can create services that are more easily accessed by women and men. Key considerations could be categorized into three areas:

  • Accessibility: Phone network, infrastructure and agents all need to be accessible and available. Women prefer to transact with women agents and, in many markets, that alone can be an important barrier overcome. Developing applications and services that are easily used by illiterate customers, with graphical, interactive voice response (IVR) and/or agent-assisted elements, increases access for all customers.
  • Safety and security: Creating services that allow and encourage anonymity (while maintaining know-your-customer [KYC] guidelines) provides additional security for women. Services that bundle insurance that can help women to endure work disruptions or economic shocks can make a significant difference.
  • Understanding: Through specific market research, it is important to be aware of the changing needs of women throughout their economic lifetime.

Women tend to be more brand loyal, be less mobile and maintain deeper community relationships; once aligned with an institution, they tend not to make unwarranted changes. In terms of borrowing, women are typically more timely and consistent in repayment. Ultimately, women are a large and identifiable customer segment that represents specific and significant business opportunities for providers that recognize these trends and engage actively.


MM4P AT A GLANCE

Mobile Money for the Poor (MM4P) is a programme launched by UNCDF in partnership with the Swedish International Development Agency (Sida), the Australian Department of Foreign Affairs and Trade (DFAT), the Bill & Melinda Gates Foundation and The MasterCard Foundation. MM4P provides support to digital financial services (DFS) in a selected group of least development countries (LDCs) to demonstrate how the correct mix of financial, technical and policy support can build a robust DFS ecosystem that reaches low income people in LDCs.

For more information, visit https://mm4p.uncdf.org or follow @UNCDFMM4P and Mobile Money for The Poor.

 

October 2016. 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 the views of UNCDF, the United Nations or any of its affiliated organizations or its Member States.

For more information, please contact
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#DFS4Women opens with a call to keep women at the centre of finance as clients, not simply as CSR projects

Day 1

#DFS4Women opens with a call to keep women at the centre of finance as clients, not simply as CSR projects

October 24 , 2016
Kampala, UGANDA - 

Today at the Lake Victoria Serena Hotel, near Kampala, Uganda, the UN Capital Development Fund (UNCDF) programme Mobile Money for the Poor (MM4P) kicked off its annual learning event—#DFS4Women. Providing women in Africa and Asia with better, more affordable and more useful digital financial products and services is at the heart of this conference.

Over 100 stakeholders gathered for the morning session, which featured Maria Kiwanuka, Senior Advisor to the President of Uganda and former Minister of Finance. Ms. Kiwanuka reminded participants that “the hand that rocks the cradle rules the world,” challenging all to focus better on the needs and wants of women in terms of digital financial services (DFS): 1) more affordable products, 2) more accessible products and 3) more affordable tools (such as cheaper handsets). All of these could open up a new frontier of savings and clients for banks and mobile network operators.

Julie Zollmann, co-author of the paper ‘A Buck Short’ that outlines findings from several years’ worth of financial diary studies, explained the barriers that women face when accessing and using formal services. According to Ms. Zollmann, researchers found that women’s cash flows differ greatly from men’s, with women often making very small, yet very frequent transactions, necessitating different types of products than those that exist in the current market.

Ms. Zollmann challenged participants to think of women as a core part of business for DFS and other formal financial services, not simply as corporate social responsibility (CSR) projects. “Let’s all commit to the idea of ‘no more “pink” products,’” she remarked. According to Ms. Kiwanuka, Ms. Zollmann and later panel participants from DFCU Bank, New Faces New Voices and the GSMA Connected Women initiative, there is a business case for serving women.

The numbers don’t lie. Theopista Ntale of New Faces New Voices recalled a project where offering a new product for low-income savers and women on a mobile platform saw—in one small region of Uganda—2.8 billion Uganda shillings deposited in two months’ time. These figures are further reinforced by research from McKinsey that was cited by Ms. Ntale, which found that overall banks could increase new deposits up to US$4.2 trillion and that governments could reduce leakage in spending and tax revenue by up to $110 billion annually if and when traditional cash transfers are changed to mobile delivery systems.

Following the morning speakers, participants broke into groups to dive deeper into issues surrounding women as agents, as customers and as part of value chains receiving high-volume payments digitally. Follow us at #DFS4Women on Twitter and Trello for more on the conference and new insights on DFS for women.

Additional reading: Digital Finance For All: Powering Inclusing Growth In Emerging Economies, McKinsey&Company

 

October 2016. 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 the views of UNCDF, the United Nations or any of its affiliated organizations or its Member States.

For more information, please contact
Additional Information
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