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Mobile money savings groups

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Mobile money savings groups

  1. 1. Mobile Money Savings Groups in Lima, Peru Daniel Boey, Piero Ortiz, Muhammad KR Harahap Finance for the World’s Poorest, Fall 2020
  2. 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. 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. 4. How do mobile money RoSCAs work? Vestibulum congue tempus Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor. Vestibulum congue tempus Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor. Vestibulum congue tempus Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor. Vestibulum congue tempus Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor. Ipsum dolor sit amet elit, sed do eiusmod tempor. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 14. Timeline - Start Up Year
  15. 15. Growth Plan
  16. 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. 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. 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. 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. 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. 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. 22. Thank you. Daniel Boey, Piero Ortiz, Muhammad KR Harahap Finance for the World’s Poorest, Fall 2020

mobile money saving groups digital currencies

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