Ten million dollars for companies that increase financial access for Haitians via mobile money transfers!
The Gates Foundation just announced its partnership with USAID that uses an innovative example of incentive engineering to induce companies to institute financial access services via mobile phones for Haitians.
There are, however, certain stipulations; initiatives must be scalable and they must also ensure that the money that is received can be safely stored and/or used. The first company to do this receives $2.5 million, the second, $1.5 million and the remaining $6 million will be distributed to providers of the first 5 million transactions.
In a blog post, program officers with the Gates Foundation’s Financial Services for the Poor Initiative outlined precisely why such an incentive fund is crucial. First, 72 percent of Haitians live on less than $2 per day, and many survive on remittances sent from abroad. Second, the earthquake razed more than a third of ATMs, banks and money transfer stations. Third, most Haitians have access to a mobile phone. Fourth, studies on similar programs in Kenya such as M-PESA have demonstrated that mobile money transfer programs have enabled its users to increase their savings and earnings by 5 to 30 percent.
The Huffington Post notes that this fund differs from the Foundation’s usual approach, which reviews proposals and awards grants in the hopes that those initiatives will succeed. On the contrary, this initiative will dole out the cash after they see results.