Insights from the Field

Infrastructure Loss Guarantee - Expanding Access Profitably

Kap Tower's founding partners helped structure a loss guarantee for the installation of infrastructure to serve a poor rural population. This project not only brought voice and data connectivity to a rural, low income population but it was also profitable for the mobile network operator involved.

Digitizing Payments Drives Benefits for Payees, Payers and Service Providers

Prominent agricultural value chains are well structured in many emerging markets - and heavily dependent on cash. This presents an opportunity to digitize payments to farmers, traders, suppliers and processors. Individuals being paid via a digital transfer rather than cash are able to build a credit history, and have access to savings, loans and other financial services. Digital payments also significantly reduce fraud, human error and theft for farmers, traders and bulk payers alike.

Factors Driving Uptake of Digital Bulk Payments

Sustainability and scalability of bulk payments ultimately rests with the willingness of payees to use the service. Payee receptivity varies depending on a number of factors including the costs of using digital finance as opposed to getting cash payments, local use cases for mobile money, phone ownership, literacy and numeracy, the need to use the service for sending money, and knowledge of and trust in digital finance. Many employed in the tea industry in Uganda are migrant laborers – from either other parts of Uganda or nearby countries – and these workers are heavy users of mobile money to send remittances. This usage pattern has facilitated strong uptake by the employee population. Anne has worked extensively to digitize payments in the tea value chain through PHB Development for the United Nations Capital Development Fund.

Read more about Anne's experience working with PHB Development to digitize the tea value chain here.

Tackling Payday Inflation with Digital Payments

Today the average mobile money user receives over $10 per month in digital bulk disbursements – defined as a payment where one entity pays many individuals (a ‘one-to-many’ transaction). With 690 million mobile money users globally, this represents a market of over US$7.5 billion per month. Facilitating this multi-billion-dollar transition to digital payments is the focus of a lot of work by both companies and the humanitarian sector in emerging markets. The potential impacts include everything from financial inclusion to increased safety and spending management. There’s another significant potential benefit that isn’t often mentioned – reducing ‘payday inflation’.