Mobile money in Haiti

Haiti, December 27, 2010

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  <span class="field-credit">
    Lisa Hoashi/Mercy Corps  </span>
    Nicholas Kristof helps us test new mobile technology, which Mercy Corps is using to deliver food aid to earthquake-affected families in Saint Marc, Haiti. Soon this mobile technology will offer Haitians a full range of financial services that they've never had before. Photo: Lisa Hoashi/Mercy Corps
  <span class="field-credit">
    Lisa Hoashi/Mercy Corps  </span>
    Mislande Lundy runs the Rosie Boutique (named after her daughter) in Saint Marc, Haiti. Mislande will be one of the first business owners in Haiti to use her mobile phone to sell her merchandise! Photo: Lisa Hoashi/Mercy Corps

Around 6:30 on Friday morning, I left Port-au-Prince with Nick Kristof, Sheryl WuDunn and their two teenage kids to Saint Marc, a seaside city about a two and a half hour drive north of the capital, to check out Mercy Corps' use of mobile phones to deliver assistance to earthquake-affected families. We all squeezed into one of Mercy Corps' 4-wheel drive vehicles, with me and Nick's daughter in the jump seat way back so we could all talk together about the day's activities.

We drove up to Saint Marc to meet with some of the 200 people there who are participating in Mercy Corps' Kenbe-La program, which will give them with $40/month for nine months to buy basic food staples (rice, corn, beans, oil). Nick was catching Mercy Corps' trial stage of rolling out a first-of-its-kind "mobile wallet" to Haitians in partnership with local mobile operator Voila and Haitian bank Unibank. Right now, we're just starting to use the mobile wallet technology to put the $40 on program participants' phones, which they'll use to purchase food at their neighborhood store.

What's a mobile wallet? Basically it's a service that will soon allow Haitians to use their mobile phones as bank accounts (a safe place to store money) and as debit cards (to make purchases in local stores).

A similar service called M-PESA is already a success in Kenya, giving more than 6 million Kenyans access to basic banking services through their phones. Mercy Corps' hope is that mobile banking will catch on in Haiti too, as few Haitians have traditional bank accounts, but more than 35 percent have access to a mobile phone. For poor families, bank accounts – especially savings accounts – are critical to improving their financial stability. Families with savings accounts have been shown to be more likely to increase their incomes and are less likely to fall ill. Helping get mobile banking started in Haiti has been one of Mercy Corps' key objectives since we arrived after the earthquake.

Right now, most families lack a safe place for their money – storing it in a can or under the mattress. When they have extra money, they might buy a pig or other livestock, with the hope that they can later sell the pig or breed it to make more money. That's a savings account with interest in Haiti! The problem with a pig though, is that it can easily get sick or die, and it's also a fixed asset. If you have an emergency and just need $5, you still have to sell the whole pig for it.

In Saint Marc, we drove up a narrow rocky hillside road to the Blockhauss neighborhood, the turquoise sea below us. Nick spoke with several of the participants of our food aid program, who will receive their first $40 on their phones next week. We also met with Mislande Lundy, the owner of Rosie Boutique, a neighborhood store. Next week, she also will begin to sell food through the program using her mobile phone.

Standing between bags of rice, bean and charcoal in Mislande's small dark store – she has not had electricity in a year, she explained – program manager Kokoevi Sossouvi showed Nick how to make a purchase from Mislande using a mobile phone. The program uses USSD instead of SMS messages. It's like when you need to check your balance on your phone in the States and you might type in #646# to communicate directly with your service provider. That's how the mobile wallet works.

Nick typed in the code for "make a purchase," his PIN, Mislande's vendor number, and the amount of his purchase. The screen looked something like this: *123*PIN*5550*30#. Beep, be-beep, beep: a message came back to him with a unique code for this transaction. He told Mislande the code (let's say it was 4415) and so she typed in her own code for "accept purchase," her PIN, the transaction ID, and the amount. Here's what was on her screen: *456*PIN*4415*30#. Beep, be-beep, beep: Both receive a confirmation message. Nick's says he has paid Mislande's account 30 Haitian gourdes. Mislande's says she has received 30 Haitian gourdes from Nick.

I know that Nick is writing about his experience in Saint Marc, so I don't want to spoil it. But I can say that just a few days before I'd also tried out transferring money between our tester phones – and can vouch for the feeling of excitement when those messages come in. This is brand new technology for Haiti – and it's technology that we don't even have in the States because we have debit cards, and we have smart phones where we can look up our savings accounts using the internet.

In countries like Haiti, where basic infrastructure like electricity, roads and telephone lines is sorely lacking, modern technologies like mobile phones have powerful potential to improve the lives of the poor. Mislande may go without electricity in her store for a while longer, but soon she'll have access to a whole range of financial services allowing her to keep her money safe, help her to save, and give her the ability to deposit, withdraw, pay for bills and transfer funds to other people at her convenience.