A BANK IN MY POCKET Revisiting Ethiopia s Mobile Money Drought Response

Transcription

1 A BANK IN MY POC CKET Revisiting Ethiop pia s Mobile Money Drought Response NOVEMBER, 2017

2 Introduction In 2016, the Electronic Cash Transfer Learning Action Networkk (ELAN) conducted research on the use of mobile money to deliver humanitarian cash transfers. The research explored if, when, and how e-transfers can promote sustained uptake and use of digital financial services (DFS). Three case studies were conducted in Bangladesh, Ethiopia and Zimbabwe. 1 The Ethiopia case study 2 examined mobile money cash transfers made by Mercy Corps to drought-affected cash transfer programs, had a specificc financial inclusion objective. The cash transfers were a discrete activity within households in the country s Somali Region. This program, in contrast to most humanitarian the larger five-year, USAID-funded Pastoralist Areas Resilience Improvement through Market Expansion (PRIME) program. Through PRIME, Mercy Corps supported the expansionn of mobile money services in the Somali region. When the need for an emergency response arose, Mercy Corps decidedd to deliver cash using the newly available mobile money platform ( HelloCash). Approximately 2,000 program participants received three cash transfers of US$45 each to their newly- opened HelloCash accounts. To encourage use of these accounts, Mercy Corps subsidized mobile phone purchase and spent considerable time preparing and familiarizing new users with a range of HelloCash services. The project also emphasized savings behavior, encouraging participants to save a small portion of each cash transfer in their HelloCash account. This research brief revisits the program to understand if and how participants used their mobile money accounts once the cash transferss ended. Methodology The initial case study analyzed HelloCash transaction records from 237 program participants in August 2016, as the program delivered the third and final cash transfer. This research update relies on updated transaction records, collected in Aprill 2017, as welll as interviews with four program participants that heavily used their mobile money accounts. PROJECT & RESEARCH TIMELINE: Cash transfers delivered: June September 2016 Full case study data collected: August 2016 Research update data collected: April Electronic Cash Transfer in Humanitarian Assistance and Uptake of Financial Services: a Synthesiss of ELAN Case Studies, Sarah Baily, Humanitarian Policy Group, March 2017: http: :// humanitarian-assistance-and-uptake-of-financial-services.pdf Can E-transfers Promote Financial Inclusion in Emergencies: A Case Study from Ethiopia, Sara Murray, Mercy Corps, November 2016: Pocket: Revisiting Mobile Money in Ethiopia s Drought Response 2

3 Findings Revisiting the mobile money drought response reveals a number of patterns, namely: Overall usage of all HelloCash services (other than cash-in deposits) declined in the period following the end of the cash transfer program. Despite an overall decline, airtime top-ups were regularly and consistently used by a majority of beneficiaries (83% of beneficiaries purchased airtime). Money transfer services and cash-in services were used by a fairly small portion of overall users; however, those users were often dedicatedd and used a range of HelloCash services repeatedly. Detailed Findings Overall, use of HelloCash services declined steeply once the cash transfer program ended. However, airtime purchases persisted as a popular use of HelloCash accounts. Between September 2016 and April 2017, the sample of 237 households made 427 discrete airtimee purchases through their HelloCash account. Other services had lower rates of usage: There were only 12 money transfers and 17 cash-in deposits during the same period. Airtime top-ups, money transfers and cash-in: total number of transactions June 2016 August 2016 September April 2017 Air-time top-upp purchases 1, Money transfers (send and receive) Cash-in (deposits) 4 17 Pocket: Revisiting Mobile Money in Ethiopia s Drought Response 3

4 Looking at the percentagee of individuals that used specific HelloCash services - at least once - offers additional insight around account usage. An impressivee 83% of all the sampled population used their accounts to purchase airtime and 22% had either received or sent a money transfer through HelloCash. Cumulative % of users using HelloCash services at least once (as of April 2017) Purchased an air-time 83% top-up Used money transfer 19% (send) 3% service (receive) Cash-in (deposit) 4% The transaction records also provide a view into how program participants stored money in their accounts. While many participants were initially enthusiastic about the opportunity to save money in their accounts, that initial enthusiasm has worn off or more likely was overcome by pressing consumption needs. The number of HelloCash users with account balances over 100 Birr (US $4.28) dropped off significantly once the cash transfers ended. Account balances (Savings proxy) % of Users % of Users Range August 2016 April 2017 less than 1 Birr ($.04 USD) 1 Birr Birr ($4.28 USD) 101 Birr Birr ($8.56 USD) 201 Birr Birr ($21.39 USD) 500 Birr and More 0% 57% 14% 19% 10% 20% 72% 4% 3% 1% The Case of the Super Users Despite the overall decline in use of HelloCash account services, some notable patterns emerged among a small group of active account users. Pocket: Revisiting Mobile Money in Ethiopia s Drought Response 4

5 Thirteen users (5% of the sample) had all purchased over 11 airtime top-ups and used money transfer services. Of these 13 super users, four had also deposited cash (ranging between 945 Birr and 10,030 Birr). Examining three individual super user transactionn records reveals that certain individuals regularly use HelloCash services to manage multiple aspects of their financial lives: One user received four money transfers, had cashed inn on 10 separate occasions (totaling 10,030 Birr), and topped up airtime on 10 occasions. Another user received one money transfer, cashed in four times and completed 19 airtime top-ups. Yet another user sent two money transferss and topped up her airtime account 11 times. She also had a balance of 97 Birr. Who are the super users? We interviewed four super users (three female and one male) to better understand their motivations and needs. All four did not own a mobile phone prior to PRIME andd none had used mobile money beforee the emergency cash transfer program. Only one of the four was comfortable with texting before the program. Each super user profiled was asked how they currently use their HelloCash account: We are using it for our family financial tasks like receiving money and using the mobile for calling my family. We use it for both [family and business]. I send money to buy commodities from the local shops and urban centers. I received money from family to buy things from stores.. I use it for family financial [activities] and for business activities such as buying and selling sheep and goats. When pushed to explain why HelloCash was a useful service, all four noted that HelloCash was the only available banking service in their area. In the words of one super user, We don t have commercial [ ] banks around here, we have Hello-cash. Another user noted that he uses his mobile wallet to support livestock trading activities, saying, It is a bank in my pocket. It goes with me everywhere - that is what makes me happy. Another acknowledged the time and cost savings offered by HelloCash: We don t need to go to other urban areas and incur transportations costs whilee reaching banks located far from here. Conclusions This research update helps us understand the opportunities and limitations of trying to increase use of digital financial services among humanitariann cash transfer recipients. The PRIME emergency cash transfer activity met its primary objectives to deliver much needed cash securely and reliably through a new mobile money product. HelloCash s growing footprintt is also a resource that can be tapped into for future emergency responses and social safety net programming in the Somali region. The objectives around sustained account usage, however, proved harder to achieve. On one hand, 5-8% of program participants most of whom had never owned a mobile phone are now routinely using a wide range of digital financial services. Moreover, an even larger percent periodically turn to HelloCash for money transfers and airtime top-ups. In many ways, this represents a revolutionary leap forward for this group of underserved pastoralists, who previously had almost no formall financial services available to them. This is Pocket: Revisiting Mobile Money in Ethiopia s Drought Response 5

6 especially significant since the individuals targeted for cash transfers are amongst the region s most vulnerable, with fewer opportunities to save and transfer money. On the other hand, the time and effort it took to train over 2,0000 program participants to use mobile money resources that could have been otherwise programmed may not have been optimally spent in light of usage patterns one year later. l The account usage findings in this program are difficult to evaluate, in part because there are so few benchmarks for similar attempts. As digital financial services expand and become more regularly used for humanitarian cash transfers, we may find that achieving 5-8% usage of digital financial services among humanitarian beneficiaries is an impressive feat. In the meantime, this study offers one contribution to the growing body of evidencee about what is possible in emergencyy programs seeking to achieve uptake of digital financial services. CONTACT Abdillahi Farah Alternativee Livelihoods & Financial Service Advisor Mercy Corps Ethiopia afarah@mercycorps.org About Mercy Corps Mercy Corps is a leading global organization powered by the belief that a better world is possible. In disaster, in hardship, in more than 40 countries around the world, we partner to put bold solutions into action helping people triumph over adversity and build stronger communities from within. Now, and for the future. 45 SW Ankeny Streett Portland,, Oregon mercycorps.org Pocket: Revisiting Mobile Money in Ethiopia s Drought Response 6