mobile money saving groups digital currencies

1. Mobile Money Savings
Groups in Lima, Peru
Daniel Boey, Piero Ortiz, Muhammad KR Harahap
Finance for the World’s Poorest, Fall 2020

2. We want to establish Mobile Money RoSCAs
in a peri-urban district in Lima, Peru, reaching
30,000 people/1,500 groups in 3 years.

3. Why mobile money RoSCAs?
Poverty
alleviation
The power of savings
and income
smoothing through
RoSCAs
Financial
inclusion
Gaining access to
formal financial
institutions and their
services (e.g. credit)
Transcend
proximity
limits
The COVID-19 context

4. How do mobile money RoSCAs work?
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Savings Groups/
RoSCAs
The basis for the
model.
Mobile
phones
The link between
members and their
accounts.
Mobile money
providers
Facilitate savings and
disbursements
Mobile Money RoSCAs
(MM RoSCAs)

5. How do mobile money RoSCAs work?
Weekly savings
Disbursement
RoSCAs
The power of savings and
income smoothing through
RoSCAs
Mobile
phones
App OR text message
transaction
Mobile money
accounts
Held by the BiM accounts

6. Esusu
RoSCAs
The power of savings and
income smoothing through
RoSCAs
Mobile
phones
App OR text message
transaction
Mobile money
accounts
Held by the BiM accounts
-Regular and weekly
savings
-Mutual loans and
support
-App or text message
transactions
-The platform on which
$ is initiated, tracked
and sent.
-Where the $ is stored.
-Facilitates transfers
through mobile phones

7. Feasibility -
Client Profile
San Juan de Lurigancho (SJL):
● +1.1 million population
● Peri-urban district of Lima, Peru
● Young population but low level of
education attainment
● Majority are spanish-speakers
● Poverty rates higher than national
average in most of the district
● High access to mobile phones

8. Feasibility - Client Profile:
Financial inclusion
● Low access to formal credit
● Per capita credit from banks in Lima is
20 times higher than in SJL
● Access to “Cajas Rurales” and “Cajas
Municipales”. But access is lower in
high poverty areas.
● “Cajas” had been severely affected by
Covid-19. Higher default rate and stock
of credits stopped growing.

9. Feasibility - Mobile Money in Peru: Billetera Movil
(BiM)
- 898 thousand users and 9 thousand small business nationwide.
- Operability across financial institutions, mobile companies, and ATMs
- Government has promoted use during Covid-19 shutdowns
MM user
● Stores electronic money
● Constitutes a trust for the
protection of funds
● Informs PDP about
payments made and
received
Pagos Digital Peruanos
(Asbanc)
● Administrates the platform
● Generates strategic agreements
with telcos and other relevant
actors
Intermediaries
(Agents, Bimers, ATMs)
● Creates e-wallet account
● Cash-in: Receives cash and
transfers emoney from its account
to the users’
● Cash-out: Transfers e-money from
users’ accounts to its own and
delivers cash
● Facilitates transactions and trains
users Source: IFC

10. Feasibility - Client Profile: Social Organizations
as an opportunity
- Many already existing social
organizations with community leaders
- 2,800 “Vaso de Leche” Committees
- 330 Community Kitchens (“Comedores
Populares”)
- 335 Mother’s Club
- Key potential partners to build outreach
and trust
- Simplifies gathering information at the
beginning of the project
Vaso de Leche Committee

11. Feasibility - Next steps: What are we missing?
Mobile money provider
meeting
03
● Are there regulatory concerns?
● Is it possible to get government support?
● Has training been easy?
● Are there successful experiences?
Social Organizations
meetings
02
● Are leaders willing to support the idea?
● How many persons can each leader reach?
Identify Important missing
information
01
● Smartphones usage
● Are people meeting on existing RoSCAs
● Confidence in the mobile money
● Number of people in the group

12. Program Plan - Detailed
A:
Community
geniuses
B: MM
training
required
C: MM
training and
phones
required
D: New
RoSCAs
Those who already
engage in MM
RoSCAs and can be
the leaders.
Existing RoSCAs that
already have MM-
ready mobile phones.
Existing RoSCAs that
do not have mobile
phones. Start with
traditional RoSCAs.
Completely new
RoSCAs
Progress

13. Timeline
A:
Community
geniuses
B: MM
training
required
C: MM
training and
phones
required
D: New
RoSCAs
Year 1: Focusing on the ready
Year 2: Expanding the reach, finding the capital
Year 3: Reaching the masses

14. Timeline - Start Up Year

15. Growth Plan

16. Network
Project Leader, Field officers (2), and
organization staff (2): daily operation,
outreach, oversight, point of contact with
other stakeholders, like the MM provider
Engage in training for MM usage,
teach other RoSCAs leaders to use
MM.
Receive guidance from Community
geniuses, in charge of managing
RoSCAs
Pay the monthly/weekly contribution
to the RoSCA, get the savings.
RoSCAs
members
RoSCAs
leaders
Community
geniuses
Project
Leader,
Field
Officers and
Staff

17. Budget Assumptions -1
Position Brief Job Description Number of Persons Salary per
month
Project Leader Supervise the whole project and in
charge of outreach
1 $200
Field Officers Oversee the project and also in
charge of outreach to the related
stakeholders, etc.
2 $150
Staffs Conduct the daily operation 2 $125
Community
Geniuses (Mentors)
Serve as the mentors, guiding the
group.
150 $125
RoSCAs Leader Member of the saving groups that is
appointed as the leader of the group.
750 0
RoSCAs Members Members of the saving group 30,000 0

18. Budget Assumptions -2
Item Start Up Year Year 1 Year 2 Year 3
Number of Personnel 5 0 0 0
Number of New Group 0 250 500 750
Cumulative Number of Group 0 250 750 1500
Average Members per Group 0 20 20 20
Total Cumulative Group Members 0 5,000 15,000 30,000
Mentors (Cumulative, 1 mentors for
10 groups)
0 25 75 150
Trainings 1 1 1 1
Conference 0 1 1 1

19. Budget
Item Start Up Year Year 1 Year 2 Year 3
Total Capital 112,500 204,700 262,130 243,260
Total Personnel Cost 10,400 47,400 122,900 233,400
Total Office Cost 4,850 5,270 5,270 5,270
Total Equipment Cost 2,800 0 0 0
Total Transportation Cost 500 500 750 1,000
Total Training Cost 300 900 1,250 2,100
Total Technical Cost 1,450 1,000 1,200 1,350
Total Cost 20,300 55,070 131,370 243,120
Cumulative Total Cost 20,300 75,370 206,740 449,860

20. Monitoring and Evaluation Plan
Output Method Frequency Person In Charge
1. Numbers of the
mentors/advisors that
participated in the project.
Compare the target with the
realization
Annually Project Leader and Field
Officers
2. Numbers of the saving
groups and members that
participated in the project.
Compare the target with the
realization
Annually Project Leader and Field
Officers
3. The amount of savings
generated by the program
Survey method using members as
sample, or if able, involve the
whole members of saving groups
Annually Community Geniuses and
Field Officers
4. The increase in savings or
decrease in loan of the
members
Survey method using members as
sample, or if able, involve the
whole members of saving groups
Annually Community Geniuses and
Field Officers

21. Expected Impact
RoSCAs core goal is
to extend the financial
services that the poor
cannot get. Also,
using inclusion of
financial service, to
smoothen the income
of the poors and in
the end could
alleviate poverty
To assess the impact:
1. Doing a desktop research
about RoSCAs and Mobile
Money;
2. Conduct the fieldwork if
needed and decide the
scope of the assessment;
3. Create the impact
assessment metrics;
4. Conduct the impact
assessment.
The impact this
project aim is to
increase the net
savings in the
sampled area

22. Thank you.
Daniel Boey, Piero Ortiz, Muhammad KR Harahap
Finance for the World’s Poorest, Fall 2020