ICTworks by Inveneo

Open your wallet right now. Most likely, you have a debit card, a credit card, a health insurance card, and access to the massive financial infrastructure that these three cards represent.

The ability to store, save, use, and borrow money anywhere in almost limitless fashion, without worry about amount, theft, or even making change. Add in the freedom from a direct worry about health costs, and these three cards represent a level of financial freedom unknown to anyone in the developing world... today.

Mobile Money Revolution

Yet by tomorrow, there will be more people who have similar access to financial services, via electronic transactions on mobile phones. In fact, over the next five years there will be a mobile money revolution at the bottom of the pyramid as international financial institutions like VISA, Mastercard, and the like move in forcefully to service the next billion customers.

They see M-PESA transferring 20% of Kenya's GDP and the money that can be made offering mobile financial services to the BoP. But its not just payments and credit, there are also opportunities in many other types of financial services.

Here are two examples with insurance, which is usually the providence of in-person sales worldwide:

• In Ghana, Tigo Family Care Insurance provides life insurance for prepaid subscribers and their family members in the event of a natural death.
• In Kenya, the Syngenta Foundation's Agriculture Index Insurance Initiative uses mobile phones and weather stations to offer farmers affordable crop insurance.

Now we could go on, but listing examples of mobile money was not the focus of the Technology Salon on how mobile financial services are transforming the economics of international development. What really captured our attention was the realization that mobile phones are merely a conduit to the larger experience of electronic transactions, which include mobile money, but also the full gamut of wealth that is created, stored, and exchanged digitally.

Please join us for the next Technology Salon

Better than Cash

First let us agree that electronic payments systems (bank accounts, Electronic Funds Transfer (EFT), pre-paid cards, smart cards, mobile money) are a great benefit for everyone involved. Electronic payments systems:

• Increase access to basic financial services, including savings, lending, and e-payments.
• Reduce barriers to entry for fee-for-service business models
• Reduce the risk of money theft and increase personal control over financial resources
• Increase speed of payments both to and from consumers, businesses, and government
• Improve transparency, mitigate corruption, and reduce leakages in the disbursement of government funds.

A great example of all five of these benefits is the ability to pay for municipal water and electricity services via mobile money in multiple African markets. By making payments electronically, both consumers and government have more accurate records, consumers are able to save for and manage payments, and service providers can expand services with a higher expectation of payment, and more timely payment, therefore serving more customers, more efficiently.

In their Better than Cash program, USAID's new Mobile Solutions Office seeks to expand electronic payment system use by governments, for utilities but also government payments in everything from conditional payments (welfare, healthcare, etc) for citizens, to payroll payments for government workers, to pension payments for retirees.

The net effect of this shift to electronic payments will be much more efficient government programs. Yet the Mobile Solutions team isn't stopping with other governments, its goal is to transform the way USAID does it's programming as well. With language already in RFP's to encourage implementing partners to use electronic payments in their work, USAID will be pushing a move from cash payments to electronic payments for all its beneficiaries.

Barriers to Adoption

Before we get too far around the hype cycle, there are issues that will retard the growth of mobile financial services and the larger electronic payment systems. First, policy makers may have a grasp of what works to encourage electronic payments and use mobile financial services first-hand, but they don't often know how to steer their countries from the theoretical to the practical.

Next, at the business level monopoly mobile operators may be just as hard to convince to innovate as a highly competitive mobile phone marketplace with multiple players. Neither situation lends itself to interoperability, which is key for large-scale electronic payment systems and the mobile financial services they support.

Finally, not everyone has a mobile phone. Yes, shocking but true. So simpler systems like scratch cards and offline intermediaries will co-exist with electronic payment systems for years to come. Better that we recognize and welcome them than limit any payment system to one hardware delivery mechanism, no matter its revolutionary benefits.

This month's Technology Salon ICT4Ag - Enriching rural coffee farmers via iPads raised a couple of eyebrows from the outset. How can Exprima Media and Sustainable Harvest realistically improve rural coffee farming via iPads?

Initially, it struck me as another attempt to use the latest and greatest technology to tackle longstanding challenges within the value chain, rather than making use of simple and often effective locally generated tech as we have seen with M-Pessa and other innovations.

But there's more to this project than merely exporting a glitzy trend to coffee farmers and suppliers in far-flung places. Two features appeal to me most: a) the range and utility of the apps; and b) the business model.

Relationship Information Tracking System App

Exprima Media and Sustainable Harvest partnered to develop a suite of traceability and efficiency tools called a Relationship Information Tracking System (RITS apps). The RITS Producer app promises to rapidly improve the operations of coffee co-ops. It functions as a set of supply chain management tools designed to record and track who produced specific quantities of coffee, how they produced it, how it is milled and where it ends up.

This is transformational because logistics is one of the more intractable challenges in the value chain. These traceability functions will enable better quality control because farmers who need to improve production practices can be pinpointed and aided.

The suite of apps also tackles the need for improved training opportunities for coffee farmers and co-op personnel. The RITS Ed app delivers instructional content in video format. Video is a great educational tool because it eliminates the risk of lessons being lost in translation. This exposure to best practices in agronomy, organic compost production, financial literacy among other topics, is likely to improve the quality and quantity of crop yields. To top this off, there's the RITS Matrix app which simplifies and walks coffee farmers through the often complex organic certification process.

The RITS app design highlights the value of an anthropological approach to ICT4D. The apps were specifically fashioned for cross-cultural use (varied languages, cultural and industry imperatives considered).

Furthermore, the iPad was chosen because its the most intuitive and rugged platform to get the big benefits of computing (automation, info sharing) in the hands of farmers. The simplicity of the user interface also enhance usability by those with limited computer literacy, thereby reducing the need for heavy investment of scare resources (money and time) in training.

RITS App Business Model

However, it is the business model that appeals to me most. According to the project pioneers, "iPads are not expensive toys, they are a business tool". The iPads are expected to pay for themselves in increased co-op productivity (supply chain management and higher quality coffee).

The project doesn't aim to get an iPad in the hands of every coffee farmer. In fact, the aim is to place it within existing infrastructure. For instance, equipping cooperatives and extension centers, which will enable greater support for farmer training, advisory services, cooperative planning and management.

Though still a centralized model, this approach tackles the seminal issue of affordability. While the cost of an iPad might be onerous for an individual coffee farmer, a co-op would fare better: Two bags of coffee weighing roughly 300 pounds, contributed by a large group, is equivalent to the cost of an iPad.

But the issue of cost goes deeper. App creation, especially on the iPad, is still expensive. The suite of RITS apps boasts a price tag of several hundred thousand—far too expensive for the co-ops to afford.  Sustainable Harvest is looking to subsidy from its partners (software developers, coffee buyers etc) to combat this.

According to Women & Mobile: A Global Opportunity (PDF), authored by Vital Wave Consulting and sponsored by the GSMA Development Fund and the Cherie Blair Foundation for Women, the 73% of women in Sub-Saharan Africa and South Asia who do not have a mobile phone represent $13 billion per year in incremental revenue for mobile telephony operators. Women are the face of growth for the mobile industry in the developing world - 66% of all new mobile subscribers will be women - and there is a huge untapped potential for business interests and for social impact.

But will mobile money be the killer app to drive mobile phone adoption by women?

This is the question we put to Brooke Partridge, CEO of Vital Wave Consulting and Menekse Gencer, founder of mPay Connect in our recent Technology Salon in San Francisco. (Sign up to be invited to future Salons). With their input, we came to several interesting conclusions around mobile money and women empowerment:

Mobile Money is Many Things

Terms like mobile money, mPayments, and M-PESA, get tossed around without any real understanding of the differences in systems and outcomes. To help our understanding of these concepts, mPay Connect made great presentations on mobile money, and we're going to steal one, key slide:

Mobile money is really mobile financial services, and like traditional financial services, has several parts - mobile payments where money is moved from one account to another, mobile microfinance where money is loaned and expected to be repaid, and mobile banking where money is kept as a safe repository of wealth.

As you can read in The Mobile Money Movement, mobile money has many benefits, from greater money security to more transparent transactions, but there are two key benefits that we focused on in the Salon.

1. Lowering transaction costs: mPay Connect research shows M-PESA saves 3 hours per day for every Kenyan subscriber in reduced shoe leather costs - the cost of walking money from place to place. If we multiply 3 hours per day, by 13.2 million subscribers, by 365 days, that's 14.4 BILLION hours saved per year. Add in the average wage per hour in Kenya, and the time savings start to make you gasp in savings shock.
2. Increasing business legitimacy: Each business that uses mobile money builds a history of financial activity that they can use for loans, factoring, and even inventory control. It also allows governments to license businesses as such and better estimate and collect taxes. In fact, mobile financial services usually are not creating financial services - many of these systems existed informally through local networks - mobile money is formalizing them and bringing them into the measurable economy.

While there isn't any objective research yet on mobile money directly impacting GDP, you can start to sense the change it brings to an economy.

Mobile Money Involves Many Actors

While we often think of M-PESA as the poster child of mobile money, there are other mobile money systems. Even in East Africa there are payment systems by Bharti Airtel, Orange, and MTN. G-Cash in the Philippines is even older and larger than M-PESA, and other players besides mobile line operators smell the mobile money to be made.

In India, banks and mobile telcos are joining forces, while in Bangladesh, BRAC and Grameen Phone have joined to create B-cash, which is promising to be network neutral - that is allow any payment using any mobile operator's system. Overall, there is real convergence - in both payment systems and in the industries that want to participate in them. Recently in Nigeria, 16 companies were given a provisional license to do mobile payments and banking: only 6 are linked to banks and only 1 to a mobile operator (MTN).

Today's model, where mobile phone companies dominate, is just a snapshot in time.

Mobile Money Isn't Targeted at Women... Yet

Even with all that excitement, we don't see handsets, subscriber plans, or even special services targeted at women in Africa like we do in Asia. Mobile operators in Africa say they are growing too fast to target women - they can barely keep up with their existing new customer influx, regardless of gender. While there is truth to that, there are also cultural issues.

In many patriarchal societies, men control the use and ownership of mobile phones. Mobile technology can be seen as a threat to traditional power dynamics and social norms. There are some hints of change - it is a security line for girls to go away to school as they can be checked on at any time. Especially around health, it's usage as a communications tool can be deemed critical for family well being..

Building on the examples in Examining the Intersections Between mHealth and Mobile Money, mPayments can be interesting way to free women for city life - imagine dowries paid in airtime vs. livestock or payroll and government benefits direct to handsets vs. husband's hands. Conditional cash now paid at hospital visits could be used as incentives for other positive behavior change, like family planning and career advancement.

Now make your own positive behavior change for career advancement - sign up to be invited to future Technology Salons - so you can participate in discussions like this first-hand.

At the Technology Salon on "How to Incorporate ICT into Proposals", we discussed some of the challenges and solutions for proposal writers when they try to incorporate information and communication technologies into future program design. (Join us for our next Salon)

Community workshop on GPS usage

Problems with Incorporating ICT into Proposals

Essentially, short time frames for preparing proposals doesn't allow for participation and end-user involvement and feedback during development of technology solutions. Yet donors often want details about a technological solution within a proposal; however, in order to define details, more knowledge of local context, a participatory local communications assessment, end-user testing and more need to be done.

This causes proposal writers to sometimes put unrealistic goals in proposals in order to secure funding or because they don't have information about the local context and actual feasibility of a proposed technology solution; implementers may find later that they are unable to deliver

The issue is compounded by the real lack of organizational buy-in to allow for testing and iterating, for trial and error, and even failure, in organizations and within projects to learn what works and what can be scaled up through proposals and donor funding.

Solutions to Including ICT in Proposals

Overall, organizations that want to integrate ICTs in their work need to plan ahead, strengthen their staff capacity on the ground, and have a clear understanding of the steps to follow when integrating ICTs into proposals. And rather than detailing an exact tech solution into a proposal, the proposal writer could offer a few options, say that "a solution could be" or "might look something like this", or be clear when negotiating with the donor that an idea will be tested but may change along the way when participatory work is conducted with end users, and as it is tested and adapted to the local context.

This can help remind donors that digital technology is only one way to innovate, and technology needs to be seen as one tool in the information and communication toolbox. For example, SMS might be just one communication channel among many options that are laid out in a project or program, and the most appropriate channels (which might also include face-to-face, paper, community bulletin board, phone calls, etc.) need to be chosen based on a local situation analysis and end-user input.

For staff, integrating ICTs as smaller aspects in programs can offer opportunities for small trial and error and learning; eg., using SMS as one channel of communication in an education or health program and comparing results with a program that didn't use SMS could allow an organization to test small ICT efforts and slowly learn, modify and integrate those that work. (See How Plan Kwale has been using ICT in their programs since 2003)

When staff experiment with and experience ICTs in one program, they may be more likely to innovate with technology in another program. As ICTs become more commonly used in communities and by local development practitioners, space for innovations grows because innovation can happen right there, closer to the ground rather than being designed in an office in DC and parachuted into communities in other places.

Experimentation with youth programs are a good place to start with tech innovations because youth tend to be more literate (if they are school going youth) and they pick up technology skills easily in many cases. Adults need not be left out however, but the learning methodology may need to be different. Engaging the community in detailing potential protection and privacy risks in data collection is key to finding ways to ensure risks are minimized. (See 8 Elements for a Positively Brilliant ICT4D Workshop)

The Plan Example

Plan Finland with support from Plan USA commissioned the ICT Enabled Development guide (PDF) to better understand and document the ICT4D context in several of the countries where Plan is working in Africa. Country offices wanted to strengthen their capacities to strategically incorporate ICTs into their work and to ensure that any fund-raising efforts for ICTs were stemming from real needs and interest from the ground. Plan offices were also in the process of updating their long-term strategic plans and wanted to think through how and where they could incorporate ICTs in their work internally and with communities.

The report process included 2-day workshops with staff in 5 countries, based on a set of ICT distance learning materials and discussion questions. The idea was to combine background and situational research, learning about ICT4D, and further input from Country Office colleagues into this process to come up with a realistic guide on how and where Plan could begin integrating ICTs into its work directly, strategically and indirectly (See 3 ways to integrate ICTs into development work).

The report team worked by Skype and email with a point person in each office who planned and carried out the workshop, developed the multi-media training pack with materials that the point persons used to support the workshop, and compiled the ICT-Enabled Development guide based on the experience.

From the report and this experience, Plan produced a 10-step process for integrating ICTs into development initiatives:

1. Context Analysis: what is happening with ICT (for development) in the country or region?
2. Defining the need: what problems can ICT help overcome? what opportunities can it create?
3. Choosing a strategy: what kind of ICT4D is needed? direct? internal? strategic?
4. Undertaking a participatory communications assessment: who will benefit from this use of ICT and how?
5. Choosing the technology: what ICTs/applications are available to meet this need or goal?
6. Adjusting the content: can people understand and use the information provided for and by the ICTs?
7. Building and using capacity: what kind of support will people need to use and benefit from the ICT, and to innovate around it?
8. Monitoring progress: how do you know if the ICT is helping meet the development goal or need?
9. Keeping it going: how can you manage risks and keep up with changes?
10. Learning from each other: what has been done before, and what have you learned that others could use

See the 3-page "ICT-Enabled Development Checklist" for more detail on how to go about integrating ICTs into a development proposal, download the ICT Enabled Development guide (PDF), and if you'd like to attend the next Technology Salon in Washington DC or San Francisco, please sign up for invitations

The UN Week Digital Media Lounge will be highlighting new approaches that are tackling Millennium Development Goal challenges. Innovative information and communication technologies are one way to accelerate progress toward meeting the MDGs. But what are the big new ideas? Who is pushing the innovation envelope? And how are humanitarian agencies using these ICT tools around the world to effect change?

Join the following noted ICT4D experts in a lively discussion around these questions at the UN Week Digital Media Lounge in New York City:

• Wayan Vota, Senior Director, Inveneo (moderator)
• Robert Kirkpatrick, Director, UN Global Pulse
• Erica Kochi, Innovation Unit, UNICEF
• Linda Raftree, New Technology, PLAN West Africa Regional Office
• Jim Rosenberg, Head of Social Media, World Bank

ICT4D: Innovation & the Millennium Development Goals
September NYC Technology Salon
Tuesday, September 21, 12-1pm
UN Week Digital Media Lounge
92nd Street Y, 1395 Lexington Avenue
New York, NY 10128 (map)

Please RSVP here for this Salon, and be sure to enter "Technology Salon" when asked who referred you to the event. That's your secret password to get in!