Mobiles for Savings?

Mobile Money and Savings in Ghana

Jenny C. Aker, Tufts University Robert Asambobillah, Catholic Relief Services Kim Wilson, Tufts University March 2013

Catholic Diocese of Wa

Aker, Asambobillah and Wilson Savings in Ghana

Savings in Ghana

Mechanism

Under the mattress Savings clubs (SILCs) Susu collecter Remittances

Advantage

Readily available for emergencies Safe, promotes group collaboration and can save larger amounts Enforced savings Share risk across different geographic areas

Risk

Can be stolen, lost, burnt Isn’t readily available for emergencies (“share out” occurs at particular periods) Fees, theft High transaction costs to sending/receiving remittances (time, bus fare, etc) Aker, Asambobillah and Wilson Savings in Ghana

Mobile Money

• • • •

Allows users to send and receive money via simple SMS messages and codes Relatively secure (linked to phone number and PIN number) High mobile coverage in Ghana

 60 percent of the population with coverage, 50 percent with access to a mobile phone

M-money introduced since 2009 (five operators)

 Adoption and usage still low – 2 percent of the population Aker, Asambobillah and Wilson Savings in Ghana

• Can m-money can promote financial inclusion of the world’s poor, particularly those living in rural areas?

• If some of the barriers to m-money adoption are addressed, can it be used to:  Provide cash transfers to extremely vulnerable populations? (Tufts and Concern Worldwide Niger)  Facilitate savings within rural areas, either by allowing individual members of savings groups to save, facilitating savings among different savings or promoting savings objectives?

 Allow households to more easily receive remittances from migrants? (Aker, Clemens, Ksoll 2012) Aker, Asambobillah and Wilson Savings in Ghana

• • Target: Savings group members in four villages in the Jirapa district of Upper West region (Zaghe, Nyenvaare, Tigboro, Kuchen)  Rural areas with mobile phone coverage, all within 10 km of Jirapa town (MTN m-money agent), part of CRS and Catholic Diocese’s SILC program Four interventions provided (designed to partially address the barriers to m-money adoption)  Each village received a slightly different combination of interventions  Villages were randomly assigned to each intervention (fairness and limited differences between groups) Aker, Asambobillah and Wilson Savings in Ghana

• • • • • Treatment 1: Mobile phone raffle. Five savings group members won a mobile phone via a public raffle. The concept of m-money and savings was discussed, but detailed information on the product and how to use it was not provided.

Treatment 2: Mobile phone sensitization. Savings group members received a sensitization module on m-money. The training used posters with illustrations of a mobile phone, an explanation on the link between savings groups and mobile phones, and a short skit. Treatment 3: Mobile phone raffle plus sensitization. Five savings group members won received a mobile phone via a raffle, plus the sensitization program. Treatment 4: Mobile phone to group leaders plus sensitization. In this group, mobile phones were provided to the savings group leaders (presidents and treasurers) and members received the sensitization.

All groups received a visit from the MTN mobile money agent and access to free m-money SIM (worth 1 cedi).

Aker, Asambobillah and Wilson Savings in Ghana

Aker, Asambobillah and Wilson Savings in Ghana

• • 100% registration (163 individuals)  Free SIM cards but time and willingness to give national health insurance ID card or voter ID card  Open acceptance of the product 40% using the service  Sending money to pay school fees  Receiving money from migrants  Saving money (especially after share-out) Aker, Asambobillah and Wilson Savings in Ghana 8

NYENVAARE

Mobile raffle 56% use, 10% save

ZAGHE

Mobile raffle + sensitization 33% use, all save Kuchen’s usage is lower....but is it because of the “sensitization only” or because they are farther away from Jirapa with poorer mobile phone coverage?

KUCHEN

Sensitization only 23% use, 2% save

TIGBORO

Mobile to leaders + sensitization 33% use Aker, Asambobillah and Wilson Savings in Ghana 9

Motivation

“I used m-money to send money to pay my child’s school fees…” Savings group member in Zaghe, December 2012 “My brother sent me money and I bought fences to fence my seedlings…’’ Savings group member in Tigboro, December 2012 “Saving on the phone is safer…it is not with me!” Savings group member in Kuchen, December 2012 “The phone is better, because sometimes the person delays…or “eats” the money.

” Savings group member in Nyenvaare, December 2012 Aker, Asambobillah and Wilson Savings in Ghana

Challenges

• • • • • • Initial registration took time (delays in MTN agent’s visit to the village) Time to register once in the village was long (poor service in villages, only one mobile phone) To resolve this, the savings agent and MTN collected the IDs to register them – but in some cases MTN had the IDs for 1-2 months (voter IDs, national health insurance)  Very risky for MTN, CRS, DDO, program recipients… Given delays, some individuals afraid to use it  If I save, will I get it back?

Dependence on us (DDO) to make transfers, deposit money, etc Not all households own mobile phones – constrains usage 11 Aker, Asambobillah and Wilson Savings in Ghana

Expansion

• • Current expansion into twelve villages in Wa with funding from Mastercard Worldwide Catholic Diocese implementing, with partnerships with the University of Wa for data collection and Tufts for design and analysis Aker, Asambobillah and Wilson Savings in Ghana 12