The Better Than Cash Journey: Mercy Corps & Women’s World Banking

I work for Women’s World Banking, which has been a member of the Better Than Cash Alliance since April 2014. Women’s World Banking is the global non-profit devoted to giving more low-income women access to the financial tools and resources essential to their security and prosperity. We joined the Alliance committing to ensuring that at least one million low-income people shift to electronic money channels in the next five years.

This winter, I had the opportunity to join the Better Than Cash Alliance team for a short-term secondment. This experience not only introduced me to the small, dedicated and dynamic Better Than Cash team, but to the diverse and committed Alliance membership.

These governments, businesses and development organizations are doing incredible, innovative things to fulfill their commitment to “go digital.”

What follows are brief highlights from a selection of these efforts. As we grow and develop as an Alliance, I know we will continue to learn from each other and move further toward digital ecosystems that provide financial access for all.

MERCY CORPS: MOBILE TECHNOLOGY TO THE RESCUE

Mercy Corps was one of the first development organizations to join the Better Than Cash Alliance. As part of its mission to help people around the world survive and thrive after conflict, crisis and natural disaster, Mercy Corps committed to explore the use of e-transfers in emergencies, rather than traditional physical cash transfers, and link recipients with formal savings, credit, and insurance products with emergency programming. In the wake of the 2013 Typhoon Haiyan in the Philippines, Mercy Corps created a program to do just that.

Typhoon Haiyan was the Philippines’ deadliest typhoon in history – those who survived the cyclone needed assistance as soon as possible. The TabangKO program was created by Mercy Corps and BPI Globe BanKO, the first mobile microfinance bank in the Philippines, to use mobile technology to distribute $2.3 million in emergency financial assistance to 25,889 typhoon-affected households.

Beneficiaries were enrolled in BanKO’s mobile savings accounts, through which they received one to three separate electronic cash transfers, totaling 3,950 Philippine Pesos (about $90). Recipients were provided a Globe Telecom SIM and an ATM card as part of account activation. As a mobile-only bank, BanKO does not have branch offices and relies on an agent network for clients to cash-in and cash-out using their Globe-branded SIM.

Mercy Corps also shared two 13-part ‘soap opera’ style financial literacy messages with 21,182 TabangKO beneficiaries using interactive voice recordings and SMS text-based messages. The stories highlighted two important financial concepts – saving and planning. The stories followed the conversations of a young married couple, Ben and Joy, who discuss tough financial decisions as they plan a budget for their household expenses.

In December 2014, BanKO earmarked Php 10 million (more than USD $227,000) to support innovative loan product development and, in particular, for the rollout of KabilinKO, a loan product for disaster-affected households, which has built-in one-year insurance coverage. The loan product was designed as part of a rapid, human-centered design product process in the affected geographic regions.

Mercy Corps has conducted an evaluation of the TabangKO program. Initial insights showed that low levels of digital literacy, lack of account interoperability as well as lack of incentive to save may have hindered the potential of the program in helping beneficiaries achieve full financial inclusion.

WOMEN’S WORLD BANKING: BANKING ON WOMEN

Women’s World Banking joined the Better Than Cash Alliance in 2014 as the global nonprofit devoted to giving more low-income women access to the financial tools and resources essential to their security and prosperity. The organization is committing to ensuring that at least one million low-income people shift to electronic money channels in the next five years.

Many of the barriers that unbanked women face will sound familiar – lack of decision-making power within their families, lack of education, lack of formal employment. We see these barriers to women’s equality all around the world. However, two barriers to financial inclusion may be less obvious: time and distance. Women’s World Banking is working with commercial banks to break down these barriers by offering digital financial products that meet the unique needs of low-income women in two specific markets: urban Nigeria and rural Malawi.

An urban woman in Nigeria can’t afford to take the time away from her busy market stall to visit a nearby bank branch. She doesn’t see the bank as for her and faces great risk carrying her cash earnings home each night. Women’s World Banking worked with Diamond Bank in Nigeria to create BETA Savings, a savings account built for women and men who run stalls in the open-air markets. Agents, knowns as BETA Friends, visit a client’s business to open accounts digitally and handle deposits and withdrawals using mobile technology. By the end of 2014, more than 154,000 accounts were opened, primarily from clients with no prior relationship with a formal financial institution.

A rural woman in Malawi needs to travel long distances to reach the nearest bank. The amount spent on bus fare as well as the time spent away from her work or family makes it impractical to open a bank account and establish a safe place to save her money.

In Malawi, with support from UNCDF’s Microlead, NBS Bank worked with Women’s World Banking to develop the Pafupi (meaning “close” in Chichewa) savings account, a mobile savings account designed for low-income rural women with no previous access to a bank. Women can open accounts and make small deposits and withdrawals digitally whenever they want at local shops with NBS bank agents using mobile technology.

These digital savings products not only help women overcome time and distance barriers, they also offer a step toward economic empowerment. For many women, having a savings account is her first point of access to the formal economy.

With digital technology, a woman, who may not have otherwise had access, can open a savings account in her own name. She can plan for her future and the future of her family, protect herself in times of crisis, and even build her business with access to loans and other offerings from the bank. Women’s World Banking is continuing to explore more digital financial products that can meet unique needs of women around the world.