Innovation

Innovation

Making the Digital Revolution Work Better for Development. But Slowly.

Innovation

Making the Digital Revolution Work Better for Development. But Slowly.

By Anna Ferracuti, Knowledge Management Consultant UNCDF-MM4P, Brussels
November 21 , 2017

Speakers panel at the Policy Insight conference ‘Making the Digital Revolution Work Better, Faster for Development”.

Brussels, BELGIUM - 

Two weeks ago, Friends of Europe organized a stimulating conference called ‘Making the Digital Revolution Work Better, Faster for Development’ and my main takeaway was that there’s nothing fast about it.

Two of the three panelists embodied two great examples of policy steering digitization, although with a different touch and context of course: India (G Subraiman, Tata) and Estonia (Jüri Sailenthal, Ministry of Foreign Affairs). The third panelist, Dana Schurmans, gave voice to a global youth who’s missing the digital ride because of different variables, almost as she was whispering that policy should take the time to look out of the window.    

Now take countries like Nepal, squeezed between India and China, Myanmar, whose population never had a touch-tone before the touch-screen, and Senegal, with its regional regulatory body (BCEAO). I guess we could say these countries should get inspired by India and, at the same time, learn from Estonia. But whatever it takes, how long?

Don’t get me wrong, I don’t want to demoralize anyone. Wait, read and tell me what you think.

Estonia: an incredible e-story

If you google ‘Estonia digital’ like I did, the first 2 results will resemble the following:

When Japan was looking for an example to develop MyNumber, their digital ID programme, the country turned to Estonia. The first e-resident of Estonia is a British journalist and the first person to apply for and be granted e-residency through the standard process is from the United States.

The e-Residency allows anyone anywhere with EUR100, from the Japanese president to yourself, to become an official e-Estonian and register your startup in 15-20 minutes. Even if you have never stepped foot in this icy Northern-European country and you hate black pudding.

Beyond residency, the blockchain technology developed by the Estonians, and operational since 2012, is now being used by NATO, U.S. Department of Defense and the European Union to ensure cyber security.

Estonia 26 years back…

After the implosion of the Soviet Union in 1991, the Republic of Estonia was on its knees, and an aid recipient country. Estonians didn’t have anything, and to rebuild their lives, they were given the equivalent of EUR10 each. The Estonian every-man didn’t have internet or a device to access it, they seemed stuck with the Soviet legacy. But they caught up with style.

Estonia 1994-2003

In 1994, the government passed the Information Policy and the Personal Data Protection Act. In 1996, they launched the Tiger Leap project, which brought internet and computers to schools, libraries and labs in both urban and rural areas. By 1997, 97% of Estonian schools were online. In rural areas, the young people had two kinds of leisure activities: sport and computer classes. People where educated to the modern technology from their young age to the Mr. ‘I, Daniel Blake’.

But bridging the digital divide was not enough for this small country. In 1997, Estonia launched e-Governance, in 2000 e-Tax. In 2001, the e-ID programme was combined with the X-Road, a secure data exchange system where each party shares information to offer services that are accessible through the e-ID.

In 2003, Skype was founded in Tallinn.

Estonia 2003-today

Skype launched a ‘Skype effect’ that made everyone believe that they could also make it as Estonians. And when Microsoft bought Skype in 2011, the Skype effect was money reinvested into Estonian startups, and foreign investors also investing in Estonian startups.

On the policy and regulation side, the digital roadmap didn’t slow down but added I-Voting (2005), Public Safety or e-Police (2007), Blockchain (2008), e-Health (2008) and e-Residency (2014). During this technology race, paper remained the comfy alternative. But when people tried the digital way, and saw that the digital system worked and was enforced top-down, they never went back.

Today, Estonia ranks third in Europe for the number of startups per capita, and most of the funders don’t come from Tallinn but from the rural areas.  Estonia also ranks first in the OECD PISA test and one every 10 students decides to study IT every year.

Then why don’t other EU countries embrace the Estonian way and be cool? Jüri Seilenthal commented that “other countries are very receptive on one-on-one but the problem is changing. The country has to want [change] and invest on it. [This includes] changing the legal infrastructure and the mindset of people”.

Was this change ‘Fast for Development’? For development for sure, being Estonian wasn’t cool in 1991 but it is cool now. But I’m not sure whether fast government actions are enough to claim that Estonia’s digital (r)evolution was fast, considering that we’re talking about a 26-year timeframe, one generation. And we should acknowledge that these actions were the expression of a spot-on long-term strategy.

Now that I’ve made you fall in love with Estonia, I want to go back to what Dana Schurmans said.

Youth and the digital divide

Dana Schurmans said that youth doesn’t have a preordained position in the digital divide. My parents think that I can fix their digital or electronic mistakes just because I’m young, like I was born with microchips or something.

If the Estonian government hadn’t considered access to internet as a fundamental right such as food and water, if the country hadn’t invested in computers and connectivity in every library, in IT classes and in an e-school system. If Estonians hadn’t invested in their youth, then do you think that I could have cited the rankings on startups per capita, PISA, and talked about Estonia at all? Maybe I wouldn’t have had Skype pinned on my pc taskbar.

One note on India, because I can’t not talk about India at all. And as at the beginning I said that Japan was looking at Estonia for the digital ID, I’ll do justice to the Asian Tiger now by saying that Japan is fluttering its eyelashes to Indian IT engineers. Does it come as a surprise? Indian IT engineers are among the best in class globally. Side question: where did they learn from? I mean, did they go to school in Mumbai or Karad?

Maybe education, literacy, skills development, however you want to call it, isn’t the must have to start the digital engine because someone else in the world may cover for you. But my takeaway from this conference was that every country that wants a sustained digital re-imagination needs to have a human capital that keeps the engine running and spikes the revs.

Cultivating a tech-savvy human capital is not fast

Maybe I superficially decided not to think through the ‘faster-than-what’ part - and please tell me if I’m wrong - but cultivating this tech-savvy human capital is a long-term investment that requires a clear vision at the government level, structural regulatory changes and a mindset shift. We’re then talking about something fun-da-men-tally slow. 

For more information, please contact
Anna Ferracuti
Knowledge Management Consultant, UNCDF-MM4P in Brussels
Additional Information
Anna Ferracuti
Knowledge Management Consultant, UNCDF-MM4P in Brussels

Sierra Leone FinTech Challenge Finalists Announced

Innovation

Sierra Leone FinTech Challenge Finalists Announced

November 16 , 2017
Freetown, SIERRA LEONE - 

After a period of selection and voting, the Bank of Sierra Leone (BSL) in collaboration with Financial Sector Deepening Africa (FSD Africa), UNCDF’s Mobile Money for the Poor (MM4P), with support from USAID and the Sida-funded Last Mile Trust Fund, will today announce the finalists of the Sierra Leone FinTech Challenge 2017.

Commenting on the challenge, Ahmed Dermish, the Ecosystem Specialist, Digital Finance at UNCDF’s MM4P said: “UNCDF commends BSL’s leadership in promoting innovations in digital finance and their commitment to support new service providers. We are excited to be a partner in this process and look forward to helping the BSL continue to shape the landscape of digital innovations in Sierra Leone.”

The announcement of the finalists comes at a time when the Government of Sierra Leone has identified access to financial services as a key pillar in the President’s Post Ebola Recovery Priority Plan.  Sierra Leone has a large number of licensed financial intermediaries. However, less than 15% of the adult population have access to financial services and 87% of the population are unbanked. Digital financial services have been identified as a key intervention area in the recently launched National Strategy for Financial Inclusion 2017 – 2020. The FinTech challenge is a strategic response needed to scale up outreach and design digital client-centric products.

The aim, successfully achieved was to encourage and catalyze the development of FinTech solutions that are useful and relevant to the people and businesses of Sierra Leone. Over 20 applications were received from various entrepreneurs in the country as well as from Kenya and Ghana. Three finalists have been selected and will each receive US$13,000 seed capital and access to the Regulatory Sandbox. This capital will help test designs, buy in expert support and clarify the business case. Up to two of the strongest fintech products and solutions will have the chance to win up to US$100,000 to pilot and scale-up in round two of the challenge.

The proposals were judged by representatives from FSD Africa, UNCDF MM4P, Bank of Sierra Leone and consumers’ group. Commenting on the finalists, one of the judges, Tamara Cook, the Head of Digital Innovations at FSD Kenya said: “The ideas submitted in the competition reflected fintech innovations from across the globe. The winners rose to the top because each addresses real problems that fintech solutions can help solve.”

It is expected that the challenge will foster collaboration between regulators, non-traditional market players, licensed financial institutions and other partners to pilot innovative products, services and solutions in Sierra Leone. With the improved financial access and usage, Sierra Leoneans and their businesses will have new tools to flourish. The FinTech Challenge 2017 has the potential to kick-start this process. 


The Finalists

1.DataPool - Credit Reference Services to non-bank Providers of credit.

“Check-Up” is a technology-based solution that helps non-bank providers of credit and credit-worthy consumers and borrowers in the informal and semi-formal sectors, to transact in a transparent and relatively low-risk manner. This solution is expected to increase credit-based commercial activities outside the banking sector. The product will allow providers of credit to give information on their debtors and their performance on their debts. It will also allow potential creditors to get reports on potential borrowers on their level of indebtedness and performance rating to inform their credit decisions.

2.Ace Ltd - App to track MSMEs’ (Micro, Small & Medium Businesses’) finances.

Ca$hr app is a simple and elegant tool for MSMEs to record business transactions. It has been specifically designed to fill the accounting needs of MSMEs in Sierra Leone, as current available options are inadequate (either too complicated, expensive, unreliable, or lack ability to analyze data in a meaningful way). The app functions as a point of sales and bookkeeping tool for business, whilst also aggregating these businesses’ data to track trends and give insight on the market.

3.Salone Microfinance & InvestED -  Smartphone-based entrepreneurship education program linked to microcredit via mobile money.

InvestED provides a platform for free phone-based training for low-income entrepreneurs. Learners who successfully complete curriculum in financial literacy and business skills – along with quizzes, surveys and chat interaction – qualify to apply for loans. Credit officers use a web dashboard to see loan applications and a creditworthiness rating provided through predictive analytics, and the tool allows them to execute disbursement, communicate with the borrower and manage the loan via mobile money. These drive the shared goals for customer empowerment, meaningful engagement and adoption of mobile money and digital financial services.


About UNCDF MM4P

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 developed 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 about UNCDF MM4P visit:

Website: mm4p.uncdf.org 

Twitter: @UNCDFMM4P

LinkedIn: UNCDF MM4P

About Sida

Sida is a government agency working on behalf of the Swedish parliament and government, with the mission to reduce poverty in the world. Through our work and in cooperation with others, we contribute to implementing Sweden’s Policy for Global Development (PGU). For more information about sida visit:

Website: http://www.sida.se

Twitter: @Sida

LinkedIn: Sida

About FSD Africa

FSD Africa is a non-profit company which aims to increase prosperity, create jobs and reduce poverty by bringing about a transformation in financial markets in SSA and in the economies, they serve. It provides know-how and capital to champions of change whose ideas, influence and actions will make finance more useful to African businesses and households. It is funded by UK aid from the UK Government. For more information about FSD Africa’s activities and current updates follow our social media platforms:

Twitter: @FSDAfrica

Linkedin:  Financial Sector Deepening Africa (FSD Africa)

Website: www.fsdafrica.org

Email: joe@fsdafrica.org

For more information, please contact
Wycliffe Ngwabe
DFS Expert, Sierra Leone
Anna Ferracuti
Knowledge Management Consultant
Additional Information
Wycliffe Ngwabe
DFS Expert, Sierra Leone
Video

Zoona recognized as the most creative DFS provider in Zambia

Innovation

Zoona recognized as the most creative DFS provider in Zambia

June 27 , 2017

From left to right: L-R Memory Chirwa (Zoona), Robert Keating (Zoona), Frida Tamba (BoZ), Junior Kwebiiha (UNCDF) and Musapenda Phiri (BoZ). © UNCDFMM4P

Lusaka, ZAMBIA - 

Every year since 2013, the Bank of Zambia (BoZ), in collaboration with other key stakeholders in the financial services ecosystem, has organized the Financial Literacy Week (FLW) campaign to encourage more Zambians to take control of their financial lives. In 2017, the theme for FLW was “Know and plan your finances for a better life”. In the month following the week-long campaign, the Governor’s Financial Literacy Awards ceremony was held to recognize the efforts of financial service providers that actively contributed to the success of the campaign.

This year for the first time, the Awards featured the category Most Creative Digital Financial Services (DFS) Provider for which providers were judged by BoZ based on the level of innovation, simplicity and availability of their DFS product or service in the market in the market.

Finally, the day of the Awards arrived and hundreds of individuals representing over 50 financial service providers crowded into a ballroom at the Intercontinental Hotel in Lusaka, eager to find out which of their peers would walk away that night with a coveted award.  Nervous anticipation filled the room as the representative from BoZ announced the DFS category and the entrants, Airtel  (for their MasterCard for mobile money wallet),  FNB  (for their mobile banking e-wallet), MTN (for their Kongola loan product), Zoona  (for their Sunga Wallet) and Spargris Zambia (Kazang) – Azuri (for their Pay-As-You-Go Solar option). And then the winner was announced…it was Zoona!

Launched in February 2017 by Zoona, Sunga is an e-wallet product that enables customers to keep money safe at no charge. In this way, customers are empowered to reach their savings goals, for example, for school fees, building a house or expanding a business. With over 35,000 users in a relatively short time, Sunga is poised to revolutionize financial inclusion in Zambia. A key advantage of a Sunga account over similar products on the market is that it is easy to set up and no paperwork is required, there is no minimum balance necessary- customers can open an account with less than USD 1 and there are no monthly fees associated with maintaining the account.

Having worked with Zoona as they were preparing to launch Sunga, MM4P was happy to see the efforts of this entrepreneurial and innovative organization recognized publicly. Zoona is one of several DFS providers that have contributed to moving the market forward in Zambia. Zoona Managing Director, Robert Keating, received the award on behalf of Zoona saying “you can expect even greater things from Zoona in 2017”. DFS in Zambia is at a tipping point and the market is growing and expanding. We are excited to see not just what the future has in store for Zoona but also for DFS in Zambia in the coming years.

MM4P is a joint program of UNCDF and FSDZ. 

For more information, please contact
Uloma Ogba
KM Consultant, Zambia
Additional Information
Uloma Ogba
KM Consultant, Zambia
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