Anne Hastings, CEO of Haitian microfinance institution Fonkoze Financial Services, recently summarized the challenges outlined by a panel hosted by the Better Than Cash Alliance (BTC), a US-based NGO that promotes financial inclusion through mobile banking, at the World Economic Forum in Davos, Switzerland, in January 2013. The panel discussed the benefits and challenges of making the transition from cash to electronic payments.
First, according to Dr. Hastings, is the challenge of increasing mobile phone usage so that everyone has one and knows how to operate it. Second is to ensure that people have the means to charge their cell phones in places with unreliable or no electricity. The third challenge of making the transition from cash to electronic payments is determining whether the transition will be led by telecommunication companies or banks and what the regulatory process will be.
Dr. Hastings stated the panel was in agreement that in order to facilitate this transition, “lowering the transaction costs are essential if the poorest are to benefit from the system” and that governments should be cautious of what Dr. Hastings deemed “excessive taxation.” Among the potential benefits of switching from cash to electronic payments is to make it easier and cheaper for low-income people in developing countries to receive government payments, receive transfers from family members living abroad, pay school fees or obtain current information on the prices of products in other towns.
By Brian LeBlanc, Research Associate
About Better Than Cash Alliance (BTC)
Better Than Cash Alliance (BTC) is a US-based nongovernment organization that was founded in 2012 through a collaboration between the Bill and Melinda Gates Foundation, Citigroup, the Ford Foundation, the Omidyar Network, United States Agency of International Development (USAID), United Nations Capital Development Fund (UNCDF) and Visa. The purpose of BTC is to promote financial inclusion by facilitating governments, the private sector and the development community in making the shift from cash-based payments to electronic payments. To move toward this goal, BTC provides policy, technical and financial assistance.
About the World Economic Forum
The World Economic Forum is a Swiss nonprofit organization with the goal of improving the state of the world by engaging business, political, academic and other leaders to shape global, regional and industry agendas. Established in 1971 in Geneva, it is known for its annual meeting in Davos, an invitation-only event that brings together chief executive officers from 1,000 member organizations as well as politicians, representatives from nonprofit organizations, religious leaders and the media.
About Fonkoze Financial Services
Fonkoze was established in Haiti in 1994 with the mission of “building the economic foundations for democracy in Haiti by providing the rural poor with the tools they need to lift themselves out of poverty.” As of December 2011, Fonkoze reported total assets of HTG 451 million (USD 11 million), a gross loan portfolio of HTG 68.2 million (USD 1.7 million), approximately 60,100 borrowers and 273,000 depositors with total deposits of HTG 138 million (USD 3.4 million). The institution had 899 employees in 46 branches as of the same date.
Additional Sources and Resources
Huffington Post article, “Mobile Cash, the Challenges,” http://www.huffingtonpost.com/anne-hastings/mobile-cash-the-challenge_b_2541473.html
MicroCapital story, February 8, 2013, “MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Donate $2m to Microinsurance Catastrophe Risk Organization (MiCRO) of Barbados, Insurer to Haiti’s Fonkoze,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-to-donate-2m-to-microinsurance-catastrophe-risk-organization-micro-of-barbados-insurer-to-haitis-fonkoze/
MicroCapital story, November 26, 2012, “MICROCAPITAL BRIEF: Fonkoze Microinsurance Catastrophe Risk Organization (MiCRO) Make Payout to Haitian Women After Hurricane Sandy,” https://www.microcapital.org/microcapital-brief-fonkoze-microinsurance-catastrophe-risk-organisation-micro-make-insurance-payout-to-haitian-women-after-hurricane-sandy/
MicroCapital story, March 18, 2012, “MICROCAPITAL BRIEF: Nigerian Stock Exchange (NSE), World Economic Forum (WEF) on Africa to Provied Opportunity for Funding for Small and Medium Sized Enterprises (SMSEs),” https://www.microcapital.org/microcapital-brief-nigerian-stock-exchange-nse-world-economic-forum-wef-on-africa-to-provide-opportunity-for-funding-for-small-and-medium-sized-enterprises-smses/
MicroCapital Universe Profile: Better Than Cash Alliance (BTC) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Better+Than+Cash+Alliance+%28BTC%29
MicroCapital Universe Profile: World Economic Forum https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=World+Economic+Forum
MicroCapital Universe Profile: Fonkoze https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Fonkoze
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/
Similar Posts:
- MICROCAPITAL BRIEF: Fintech Kacha Gets Regulator Approval to Roll Out Mobile Money App in Ethiopia
- MICROCAPITAL BRIEF: FINCA Ventures Places Equity in Agtech CassVita, Seeking to Boost Incomes from Farming Cassava in Cameroon
- MICROCAPITAL BRIEF: G20, SME Finance Forum Showcase Digital Finance Solutions for MSMEs Via Online Database, Seek Submissions
- MICROCAPITAL BRIEF: Sama Money Acquires Première Agence de MicroFinance, Entering Microcredit Market in Mali
- MICROCAPITAL BRIEF: Axis Launches axisPay Mobile Money App for Small Businesses in Egypt
