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Wednesday, June 9, 2010

Gates Foundation and USAID will help Mobile Money services in Haiti with $10 million incentive fund

The Bill & Melinda Gates Foundation and the US Agency for International Development (USAID) are encouraging the launch of financial services by mobile phone in Haiti, following the January earthquake. Fewer than 10% of Haitians had ever used a commercial bank before the disaster.

The two organisations say enabling Haitians to send, receive and store money using their mobile phones has the potential to dramatically improve their lives and leapfrog more conventional banking models to safer, more affordable alternatives.

The first company to launch a mobile money service in the next six months that meets certain criteria will receive $2.5 million from a fund set up by the two groups. The second operator to launch and reach these benchmarks within 12 months will receive $1.5 million. Another $6 million will be awarded as the first 5 million 'mobile money' transactions take place, divided between the operators that contribute to the total number of transactions.

Mark Suzman, acting president of the Global Development Program at the Bill & Melinda Gates Foundation, said "Out of the ruins of Haiti’s tragic earthquake, there is an unprecedented opportunity to improve the lives of millions of Haitians and unlock the country’s economic potential through mobile money. Making financial services widely available to the poorest families in the developing world can help break the cycle of poverty by giving them a safe place to save, guard against risks, build assets, and provide opportunities for the next generation."

The foundation will provide $10 million in awards plus additional funds for related activities; USAID will offer technical and management assistance and other funding totalling approximately $5 million through the Haiti Integrated Finance for Value Chains and Enterprise project.

The destruction of more than a third of the country’s bank branches, ATMs and money transfer stations in the earthquake has meant that cash shortages for Haitians have been severe. Mobile money services will help families and friends, humanitarian agencies, charities and donors get billions of aid money and remittances into the hands of Haitians.

Author: The Fonecast
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