Mobile wallets help Haitians rebuild

Haiti

August 3, 2011

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  <span class="field-credit">
    Lisa Hoashi/Mercy Corps  </span>
    One of the storeowners in Saint-Marc, Haiti, supported by Mercy Corps' Mobile Money program. Photo: Lisa Hoashi/Mercy Corps
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  <span class="field-credit">
    Erin Wildermuth/Mercy Corps  </span>
    Keying in a mobile banking transaction. Photo: Erin Wildermuth/Mercy Corps

The 7.2 earthquake that devastated Haiti on January 12, 2010 resulted in catastrophic loss of life, destruction and displacement. It also put an enormous strain on the country's already-fragile financial sector, which was instantly rendered unavailable to meet the cash needs of a population in distress.

All of a sudden, Haiti suffered from a severe shortage of available banking: throughout the country, there was an average of just two bank branches for every 100,000 Haitian citizens. Even when food and other household necessities became available in local markets shortly after the earthquake, families weren't able to buy anything, because they didn't have cash.

Families needed food. Small vendors and local economies needed cash. And it turns out the solution to this Catch-22 was right in the hands — or the pockets — of most Haitians.

Adapting an emerging technology for Haiti

As many as 85 percent of Haiti's citizens have a mobile phone. Throughout the world, especially in East African countries like Kenya, the practice of mobile banking — customers using their cell phones for all sorts of cash transactions — was gaining wider notoriety and usage. With Haiti's banking system in a shambles and less than half the country's population with traditional bank accounts, there was both a need and an opportunity to try something revolutionary.

Watch a video by the Bill & Melinda Gates Foundation featuring our Haiti Mobile Money program.

Just weeks after the earthquake, Mercy Corps began working with two strategic partners — telecommunications operator Voilà and financial services provider Unibank — to conceive, develop and implement a mobile money solution for Haiti.

Over the months that followed, Voilà and Unibank developed and introduced the mobile money architecture, incorporated Mercy Corps' suggestions for improvement and designed an easy-to-use service for Haiti's vast "unbanked" population. Mercy Corps piloted the service; identified, mobilized and trained program participants; and managed the logistics of the humanitarian distributions. Our team conducted field tests, assessed the reactions of participants and provided continuous feedback to Voilà and Unibank.

Cashing electronic paychecks

Much of the program pilot took place in the form of Mercy Corps cash-for-work projects, during which participants were paid over their cell phones for work they'd done to rehabilitate roads, farmland and irrigation systems. These cell phone credits could be cashed in for food and other household necessities at stores that were also participating in the pilot program — creating a system through which local economies could begin healing.

“I wait for my payment eagerly and without worry," said Pierre Louis Jacques, a 43-year-old earthquake survivor who participated in the cash-for-work pilot program for mobile banking. "With my money, I’m going to buy food and pay for school for my children. I like this way of paying – the process is easy to learn and there's less risk involved.”

Sylmanie Prophete, a 27 year old woman said, “It’s a very good way of paying people because it’s very discrete," 27-year-old Sylmanie Prophete agreed. "People don't know your business — it’s between us, Mercy Corps and the bank.”

Mobile banking reaches thousands in Haiti

With such enthusiastic feedback and success in the pilot program, the partners launched Haiti's first mobile wallet solution in September. The launch coincided with a Commitment to Action — which highlighted mobile banking's role in Haiti's ongoing recovery — at the 2010 Clinton Global Initiative meeting in New York City.

Since then, Mercy Corps has rolled out mobile money to more than 6,000 people in rural Haiti. We've disbursed more than US$1 million in mobile money payments for various activities. And we've helped create a network of several dozen stores that engage in mobile money transactions.

There remains much work to be done, and thousands of Haitians yet to access mobile banking. But this approach is a clear example of Mercy Corps' eye toward innovation: taking something as small and widespread as a cell phone and, with help from savvy partners, using it to help renew and transform a country's economy.