Humanitarian Payment Digitisation
Humanitarian Payment Digitisation
Humanitarian Payment Digitisation
Payment
Digitisation:
Focus On
Uganda’s Bidi
Bidi Refugee
Settlement
The GSMA represents the interests of mobile operators The GSMA Disaster Response programme aims to
worldwide, uniting nearly 800 operators with more strengthen access to communications and information for
than 300 companies in the broader mobile ecosystem, those affected by crisis in order to reduce loss of life and
including handset and device makers, software companies, positively contribute to humanitarian response. We work to
equipment providers and internet companies, as well as drive the creation and adoption of coordinated, impactful
organisations in adjacent industry sectors. The GSMA solutions and practices that leverage the ubiquity of the
also produces industry-leading events such as Mobile mobile technology under the umbrella of the Humanitarian
World Congress, Mobile World Congress Shanghai, Mobile Connectivity Charter.
World Congress Americas and the Mobile 360 Series of
conferences. Learn more at www.gsma.com/disasterresponse
Or contact us at [email protected]
For more information, please visit the GSMA corporate
website at www.gsma.com Follow GSMA Mobile for Development on
Twitter: @GSMAm4d
Follow the GSMA on Twitter: @GSMA
The GSMA’s Mobile Money programme works to This initiative is currently funded by the UK Department for
accelerate the development of the mobile money international Development (DFID) and supported by the
ecosystem for the underserved. GSMA and its members.
Authors
Jenny Casswell - Insights Manager, Disaster Response
Jennifer Frydrych - Advocacy Manager, Mobile Money
Acknowledgements
The GSMA would like to express its sincere appreciation to Airtel, MTN, Mercy Corps, the International Rescue Committee,
the United Nations High Commissioner for Refugees (UNHCR) and the United Nations Capital Development Fund (UNCDF)
for sharing their insights and peer reviewing this report.
Contents
1 Executive Summary 2
2 Introduction 4
2.1 Refugees in Uganda 4
2.2 Uganda’s mobile industry 6
6 Success Factors 28
6.1 Frequent communication to build trust 28
6.2 Flexibility and agility on all sides and willingness to make projects succeed 29
6.3 Financial and operational support to build out the mobile money ecosystem 30
6.4 Reliable mobile network coverage 30
6.5 Ensuring agent network availability, competency and liquidity 31
6.6 Humanitarian organisational capacity and sufficient technical knowledge 32
6.7 Significant investment in training and sensitisation of beneficiaries on how to use mobile 33
money to receive payments
7 Challenges 34
7.1 Fast changing Know Your Customer (KYC) regulations 34
7.2 Complex and/or unclear due diligence process for potential partners 36
7.3 Low mobile handset penetration 37
7.5 Ensuring agents have the correct denominations of physical cash 38
1 Executive Summary
Mobile network operators around the world are leveraging their mobile
money bulk payment offerings to deliver humanitarian cash transfers to
people affected by crises.
At a time when humanitarian budgets are being stretched to their limits, electronic
money transfers, notably mobile money, offer a cheaper, faster, more secure and more
transparent means of getting help to those who need it, compared to a physical cash
equivalent. The pace at which humanitarian organisations are shifting from in-kind aid,
to cash transfers, then to digital cash transfers, is intensifying. As such, the humanitarian
sector is increasingly leveraging mobile money, specifically their bulk payment offerings,
to facilitate the delivery of digital cash transfers. The benefits of delivering funds
electronically to beneficiaries through a mobile money provider stretch beyond just
efficiency and transparency - the opportunity to promote financial inclusion is vast. Yet
delivering humanitarian cash transfers (HCTs) in fragile environments is costly business
for mobile money providers, thus, in order to build a sustainable business case, mobile
network operators (MNOs) must drive the usage of mobile money accounts as well as
GSM services to increase average revenue per user (ARPU).
For the first time in Uganda, mobile network operators are using their
mobile money bulk payment service to deliver humanitarian cash
transfers in Bidi Bidi refugee settlement.
Uganda hosts the world’s fastest growing refugee population - today, the country hosts
over 1.3 million refugees. In northern Uganda, the mobile industry and humanitarian
sector have collaborated to deliver humanitarian assistance to refugees via mobile
money. This has resulted in savings in logistical costs, whilst also giving refugees greater
dignity and choice. Such partnerships are a first for MNOs in Uganda who are rapidly
adapting their mobile money services to meet the needs of their humanitarian partners.
This case study offers insights into the business models, modalities and operations
involved in two mobile money humanitarian cash transfers projects in Bidi Bidi refugee
settlement, in northern Uganda. Both projects are based on partnerships; the first
between Airtel and Mercy Corps, and the second between MTN and the International
Rescue Committee.
2 | Executive Summary
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
1. GSMA, September 2017, Enabling Access to Mobile Services for the Forcibly Displaced https://www.gsma.com/mobilefordevelopment/programme/digital-identity/enabling-access-mo-
bile-services-forcibly-displaced
Executive Summary | 3
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
2 Introduction
However, the scale of refugee flows into Uganda is This summit was called to translate the New York
stretching the country to its limit, placing excessive Declaration Commitments4 into action and tackle
pressure on state and host community resources. the chronically underfunded humanitarian appeals,
Bidi Bidi refugee settlement in Yumbe is now the aiming to raise US$ 2 billion a year for the next four
largest refugee settlement in the world, hosting over years to meet needs. The conference raised just
280,000 refugees. Since the escalation of the civil US$ 358 million in pledges, including donations,
war in South Sudan in July 2016 and the declaration investments and programming commitments.5
of famine in February 2017, Uganda has become the
Within this context, the humanitarian sector is
largest recipient of fleeing migrants in Africa, with
thinking creatively about how to maximise the
the total daily new arrivals of refugees averaging
impact of the minimal resources available. As
nearly 3,000 in March 2017. In less than a year, the
donor agencies display an increased preference
refugee population in Uganda has doubled to over
for cash aid to complement in-kind aid, the way
1.3 million, and 80% of refugees are women and
in which many humanitarian organisations are
children.3 As a result of the deteriorating situation in
operating is changing. In northern Uganda, a
South Sudan, a large proportion of refugees are in
number of humanitarian organisations have started
the north of Uganda (see Figure 1), predominantly in
to collaborate with the private sector, in particular
four districts; Arua, Moyo, Adjumani and Yumbe.
mobile network operators, to test whether mobile
In response to the growing crisis, the UN Secretary money should be the preferred modality for the
General António Guterres visited Uganda in June delivery of cash to refugees.
2017 to co-host the Solidarity Summit on Refugees.
2. UNHCR, http://reporting.unhcr.org/node/5129
3. UNHCR, July 2017
4. United Nations, 2016, http://refugeesmigrants.un.org/declaration
5. Devex, July 2017, Uganda seeks support as Africa’s largest refugee host country
4 | Introduction
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
1,355,764
South Sudan
DRC 224,748
Burundi 38,356
Somalia 34,963
Rwanda 15,031
Others 20,763
South Sudan
MOYO
YUMBE
284,927 180,533
LAMWO
Bidi Bidi
30,296
ADJUMANI
ARUA
233,654
226,540
KIRYANDONGO
56,789
Democratic
Republic of the
Congo
Uganda
Kenya
Kyaka II Kampala
Rwamwanja
27,144 98,759
65,564
Lake
Victoria
Nakivale
Oruchinga 97,228
5,787
United Republic
of Tanzania
Rwanda
Introduction | 5
UGANDA’S MOBILE
INDUSTRY
Mobile sector
Mobile Network Operators
42m
Population Multi SIMing is common
1.45 SIMs
per unique subscriber
18.5m 72% 2G
3G 21%
66% use
mobile internet
4G
7%
Smartphone adoption ARPU per subscriber
18% €3.63
Compared to €6.88 for whole
Africa average
Mobile money
8 mobile
money Dec 2016
services
(Africell, Airtel, EzeeMoney, Micropay,
MobiCash, MTN, Smart Telecom, UT Mobile)
21.5m
REGISTERED ACCOUNTS
(Bank of Uganda)
133k
mobile money agents in
Uganda in Dec 2016
UGX 43.8tn
Transacted via mobile
money (US$12 bn)
(Bank of Uganda)
(Bank of Uganda)
Banking
Other stats
Ease of doing business index (World Bank)
115/190
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
3 Humanitarian Cash
Transfer Overview
Many leading humanitarian organisations have plans WFP’s total spend on assistance. In 2000, UNHCR
to use digital cash transfer mechanisms to disburse implemented 15 programmes that relied on cash
humanitarian cash transfers. Between 2009 and and cash-alternatives; by 2015 that number had
2014, the use of cash by the World Food Programme increased to 60 programmes and in 2016 UNHCR
(WFP) increased from US$10 million (less than 1 per delivered US$ 688 million through cash-based
cent of total aid) to US$3 billion, and by the start modalities, which exceeded the in-kind assistance
of 2016 it was estimated that humanitarian cash provided by UNHCR. Almost all of this was delivered
transfers accounted for more than 25 per cent of through unrestricted cash.
FUNDS ARE
TRANSFERRED
FROM THE
ORGANISATION
VOUCHER
Responsibility
falls with…
PRE-PAYMENT PAYMENT CYCLE POST-PAYMENT CYCLE
• Distribution of SIM cards & • Inform mobile money • Technical support for
registering mobile money agents and dealers of beneficiaries to replace SIM
accounts (KYC) cash-out day, and support cards, or obtain new PINs
Mobile money with liquidity management
provider • Ensure presence of
sufficient agents in specific
location
1 2
Funds moved from NGO bank NGO identifies how much funds go to each
account to MNO escrow account beneficiary, and shares this with MNO
3 4
Platform / technical Y Y Y
Staff liaison Y Y Y
SIM provision Y Y Y
Customer registration Y
Cash-out fee Y Y
Liquidity management Y Y
Security cost of cash handling Y Y
Merchant acceptance network Y
Customer service Y Y Y
NGO staff training Y Y Y
Beneficiary training Y Y Y
Marketing & Communications Y Y Y
Risk management & compliance Y Y Y
“Network coverage has been scaled up recently. We provided mobile BTS (base
transceiver station) in Bidi Bidi last year in November and we now have two
permanent sites installed in zones 2 and 3 of Bidi Bidi – providing 97% of the
settlement with 3G coverage.”
Felix Mugeni, Regional Mobile Money coordinator – Northern Uganda, MTN
In the case of Bidi Bidi, UNCDF, alongside cases for site roll out. We anticipate an additional
UNHCR, and other humanitarian organisations, three permanent sites in the Yumbe settlements
provided MNOs with critical information to alone. We also have a facility available to de-risk
help inform their decision to upgrade and the installation of towers. The promise of a loss
expand coverage in the settlement, including guarantee, whereby we reimburse the MNO for
the provision of GPS coordinates, population any losses suffered through the site, can enable
statistics, and predicted trends. the MNO to invest in a new site without financial
risk.”
“We are helping the MNO understand refugee
and host community settlement demographics, Delia Dean, Value Chains & Digital Financial Services
patterns and aggregate demand to mobile Consultant, UNCDF
money so that they can make informed business
COSTS BENEFITS
Box 4: NGO perspectives of leveraging mobile money for humanitarian cash transfers
to meet needs of refugees in Uganda
Mercy Corps
“Mercy Corps decided to provide cash transfers to refugees using mobile money to
help meet their immediate needs as they arrived from South Sudan. In the long-term,
we see tremendous potential in linking refugees with financial services using their
mobile money accounts. It’s important to have mobile network infrastructure and
strengthen the payment ecosystem in Bidi Bidi to expand livelihood opportunities
for refugees. Many of the refugees do not have mobile phones when they arrive in
Uganda and are new to mobile money. We need to support their ability to purchase
a phone as needed, assist them to feel comfortable transacting on the phone, as well
as understand their interest in other services they can access from the mobile money
account, including storing money, sending payments, and receiving remittances.”
Miji Park, Director of Programs, Mercy Corps Uganda
Withdrawal/cash-out fee
(UGX)
1,210 N/A N/A
5 In Depth:
Humanitarian Cash
Transfer Projects
in Bidi Bidi
In November and December of 2016, as refugees from South Sudan
arrived in their thousands across the Ugandan border each day and
settled in Bidi Bidi settlement, humanitarian organisations had to
move quickly to support their immediate and longer-term needs.
IRC, Mercy Corps and DanChurchAid were some of the fast movers
in developing programmes to support refugees with cash aid. This
section captures their projects with MTN and Airtel respectively,
outlining the operational activities of the projects and documenting
the success factors, challenges and lessons learned for future
humanitarian cash transfer projects.
Type of Persons with Specific Needs (PSNs) Persons with Specific Needs (PSNs)
beneficiary defined through vulnerability criteria.
*IRC and Mercy Corps avoid
PSNs include women and child-headed
duplication of beneficiaries by sharing
households, elderly (60+), chronically
beneficary list
ill, physically or mentally disabled and
lactating or pregnant mothers.
Amount UGX 38,000 (US$ 10) on a monthly basis UGX 40,000 (US$ 11) on a monthly basis
transferred
Amount 1. Transaction fee: UGX 300 (US$ 0.08) 1. Transaction fee: UGX 390 (US$ 0.11)
charged by for every transaction regardless of for every transaction regardless of
MNO value value
2. Withdrawal fee per transaction - cash 2. Withdrawal fee per transaction - cash
out UGX 1,210 (US$ 0.33) out UGX 1,210 (US$ 0.33)
3. SIM costs: UGX 3,000 per SIM card 3. SIM costs: Free SIMs
Project 1
5.1 International Rescue Committee
and MTN Uganda
Overview
The IRC has been working in Bidi Bidi to provide The intended benefits of integrating a cash
emergency health response since August 2016 and component into IRC’s programming were twofold.
now serve all five zones in the settlement through Firstly, to give the most vulnerable refugees the
a mixture of health, protection and sexual and flexibility to use cash as and when they need it to
gender-based violence (SGBV) programs. IRC’s address their unmet needs, and secondly, to reduce
Economic Recovery and Development department the heavy burden of logistics, including transport
is implementing unconditional humanitarian cash and storage involved with in-kind distributions.
transfers in northern Uganda through mobile money,
in partnership with MTN Uganda.
In early 2017, IRC’s Emergency Response Team Box 5: IRC’s commitment to cash
visited Uganda to support in-country staff during
the crisis and suggested exploring the use of mobile
money for cash transfers, given IRC’s commitment IRC’s global 2020 vision is committed to
to having active cash transfer programmes in 75% of delivering 25% of its humanitarian assistance
their country offices by 2020 (see Box 5), and their through cash over the next five years and to
proven successes using mobile money as a modality having active cash transfer programmes in
in some of IRC’s other operating countries, including 75% of IRC’s country offices. Furthermore, IRC
Pakistan and Cameroon. have a target that 75% of all the cash delivered
is done so digitally.
There were also a number of specific advantages of determine mobile network strength in specific zones
leveraging mobile money as the modality of choice of the Bidi Bidi settlement, and found MTN to be the
for cash transfers: strongest. As a result, the IRC approached MTN to
partner on an HCT project. Part of the agreement
• Accountability and compliance: Generating
was for MTN to upgrade their network, which
reports gives real-time information on the delivery
resulted in them replacing a temporary tower with a
of cash to beneficiaries.
permanent one in Zone 3 of Bidi Bidi settlement.
• Flexibility and freedom: Beneficiaries have the
With funding coming from Stichting Vluchteling
choice and liberty to withdraw cash at any time.
(SV), the IRC targeted 1,225 beneficiaries (858
• Improved safety: The replacement of physical refugee People with Specific Needs8 and 367 people
cash with digital cash removes the need for IRC from the host community), with the objective of
staff to move large amounts of cash from banks enhancing their purchasing power to access life-
two hours’ drive away, preventing some very real saving commodities within their local markets and
dangers. In recent years, an NGO lost a member to reducing their dependence on negative coping
of staff caught up in a violent attack whilst strategies. US$ 11 was transferred to beneficiaries
delivering cash in Gulu. once per month for three months.
• Ease of monitoring and follow-up: Ability to
easily follow up with beneficiaries in case of a
problem.
In March 2017, the IRC conducted a study to
Contracting Process
In March 2017, IRC contracted MTN to facilitate Furthermore, the MNOs are required to perform
the payment of cash transfers through MTN’s bulk due diligence on any potential partners with which
payment mobile money offering, and the first they transact9, this is a stringent risk management
cash transfer was made in April. Contracting took process which resulted in a long process for IRC to
longer than three months and presented challenges collate and present the necessary documentation
for both parties, largely due to the fact that a for compliance. This delayed the start of the project
partnership of this nature was a first of its kind. by several months.
According to the IRC, many People with Specific to essential items, particularly for PSNs. IRC’s
Needs (PSNs) in the refugee settlements lack assessments showed that PSNs have multiple
sufficient support to meet their basic needs. and complex needs, depending on their
World Food Programme (WFP) provides food circumstances. The intention, therefore, was that
distributions, but the amount and type of food the integration of a cash component into IRC’s
sometimes does not meet dietary diversity programming would give the most vulnerable
expectations. Similarly, core relief items are refugees the flexibility to use cash as and when
provided by UNHCR but gaps remain in access they need it to address their unmet needs.
8. PSNs include women and child-headed households, elderly (60+), chronically ill, physically or mentally disabled and lactating or pregnant mothers.
9. Businesses are required to conduct basic due diligence with every transactional partner where transactions pass a certain threshold. This is true for all organisations, not just financial
institutions. Due diligence is a risk management process that organisations undertake to ensure they are entering into business with partners that are not involved in corruption, money
laundering, etc.
Project 2
5.2 Mercy Corps and Airtel
Overview
In partnership with Airtel, Mercy Corps is delivering Organisation (TPO) focusing on social protection,
unconditional humanitarian cash transfers in psychosocial and mental health needs of vulnerable
Bidi Bidi settlement, as part of an eight-month people across the programme.
project funded by the European Civil Protection
Mercy Corps is delivering cash to 4,750 Persons with
and Humanitarian Aid Operations (ECHO).
Specific Needs (PSNs), out of a total of 10,633 PSNs
The programme is part of a consortium, led
in the settlement identified in February 2017. 4,550
by DanChurchAid, and supported by UNCDF,
beneficiaries are South Sudanese refugees and 200
distributing cash in zones 1, 2 and 5, with Mercy
are from the host communities. Each month, UGX
Corps as an implementing partner, distributing cash
38,000 (US$ 10) was transferred to each beneficiary
in zones 3 and 4, and Transcultural Psychosocial
via Airtel Money.
“Physical cash transfers using bank models Mobile money will be a dominant channel for
can cost up to six times the amount of using humanitarian organisations delivering cash
mobile money transfers. Using mobile money is because most of the resources go directly to
the cheapest option with no maintenance cost beneficiaries. Humanitarian donors support
for the dashboard, and only UGX 300 for each mobile money because more cash ends up in
sending fee and UGX 1,210 for each withdrawal the hands of refugees as less is required for the
fee, totalling around 50 US cents per refugee operational costs.”
[UGX 1,510 / US$ 0.48]. Even working directly
Ronald Rwakigumba, Uganda Country Coordinator,
with a security company using a van to deliver
Agri-Fin Mobile, Mercy Corps.
cash to the settlement, costs on average US$ 2
per refugee.
Contracting Process
Mercy Corps began discussing the proposition of a bulk payment account with Airtel in December 2016.
Upon providing the organisational Know Your Customer (KYC) information required, the contract between
Mercy Corps and Airtel was signed by both parties on 7th February 2017.
Box 8: Financial inclusion and wider benefits to refugee and host communities
What are the benefits of using mobile What are the wider benefits to refugees
money as the e-transfer modality for and local communities?
humanitarian cash transfers? Mobile money infrastructure development also
Mobile money has the potential to address brings along network improvements that benefit
the needs of forcibly displaced populations. all refugee and host populations, for example,
Beneficiary needs and conditions are the biggest payers like Mercy Corps and DCA advocated
driver, for example security of cash, mobility of for good network coverage to facilitate mobile
cash. Money stored in a mobile money account money transfers, but this also supported the
is safer than cash in refugee settlements when entire refugee population to utilise the improved
refugees have sufficient opportunities to use network coverage to communicate with their
their mobile money account. relatives and friends though voice and data.
Airtime purchases also became possible using
the developing mobile money agent network.
How can mobile money drive financial
Ronald Rwakigumba, Uganda Country Coordinator,
inclusion for refugees?
Agri-Fin Mobile, Mercy Corps.
Mobile money is the most accessible form of
financial inclusion, enabling access to savings
and loan products. For example in the first year
(Aug 2016- Aug 2017) of MTN introducing a
mobile money loan product, MoKash to Uganda,
US$ 8.33 million worth of loans was disbursed,
showing high demand for mobile financial
services. Availing and exposing these services to
refugees improves their dignity and parity with
host communities. Uganda has over 20 million
mobile money accounts and by distributing cash
through mobile money to refugees, they are able
to be included in digital cash opportunities just
like their host members.
6 Success Factors
BIDI BIDI
Mercy Corps and Airtel were faced with a number of challenges at the start of their respective
projects, due to a change in regulation in Uganda no longer allowing previously recognised forms
of identification to be used for refugees to register SIM cards or open mobile money accounts (see
section 7.1). Consequently, funds were stuck on deactivated SIMs. Airtel quickly credited Mercy Corps’
account with the unallocated money and communicated all processes and actions to the Mercy Corps
team, building confidence for all parties.
28 | Success Factors
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
BIDI BIDI
Flexibility of donor: One of the top three success factors highlighted by IRC was donor flexibility.
IRC’s donor, Stichting Vluchteling (SV), gave them free reign to design the humanitarian cash transfer
project entirely as they saw fit, instead of pre-determining the project design. This gave IRC the
agency to design and adapt the project to best suit the specific context.
Adapting to changing regulation: In the third month of Mercy Corps and Airtel’s project, a decision
was made to transfer money via physical cash distribution vehicles, due to temporary KYC issues
around electronic money transfers, as outlined in Section 7.1. Mercy Corps approached a bank,
which unfortunately could not deliver a quote on time, so then quickly found a security company
to transport the cash to the settlement in a van. This experience led Mercy Corps staff to recognise
the significant benefits of mobile money beyond just reduced cost and increased efficiency. Notably,
physical cash provides no digital footprint of the transactions - Mercy Corps’ finance and programme
teams had to travel to the field every day to physically collect thumbprints of refugees on paper to
prove authenticity, increasing time and cost. The flexible way in which Mercy Corps and Airtel were
able to adapt, to ensure the continuation of the project, was an important part of the process, with
important lessons for all stakeholders.
Willingness of MNO to ensure language barriers were overcome: During product education, MTN
had to ensure that there were multiple translators to ensure all refugees could understand MTN’s
mobile money product. Multiple languages spoken by the refugees included Arabic, Nubi, Kakwa
and Dinka.
10. GSMA, 2016, Mobile Network Operators Partnership Guidelines: Building effective partnerships between MNOs and NGOs in complex environments and criseshttps://www.gsma.com/
mobilefordevelopment/wp-content/uploads/2016/03/GSMA_Partnership_MNOs_NGOs.pdf
Success Factors | 29
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
BIDI BIDI
As outlined in section 4.1, the leading MNOs in Uganda upgraded or expanded their coverage in Bidi
Bidi following the refugee influx at the end of 2016, to ensure that potential customers could benefit
from a suite of mobile services, including mobile internet.
Both IRC and Mercy Corps requested for Airtel and MTN to upgrade their mobile coverage in
particular areas of Bidi Bidi settlement to ensure the smooth running of their projects. The MNOs were
happy to meet these expectations, to meet high demand and ensure that their customers would be
satisfied with the service being provided.
To successfully register beneficiaries for a SIM card and mobile money, an electronic KYC app is used.
The app works with 3G connectivity and is able to capture the OPM ID, photograph and registration
form of the beneficiary. Registration is instant, followed by mobile money activation upon successful
registration.
30 | Success Factors
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
BIDI BIDI
A survey conducted by Mercy Corps with refugees in January 2017 revealed that both agent network
and liquidity were insufficient. Indeed, there was limited network coverage in zones 3 and 4 of Bidi
Bidi where Mercy Corps was planning to conduct HCTs. Further, there were very few mobile money
agents and this formed the basis for partnership with MNOs who were willing to invest in the key
infrastructure for network coverage and for mobile money roll out. The nearest bank to Bidi Bidi is
two hours’ drive from the settlement (in a town called Koboko), so it was essential to come up with
innovative strategies to improve agent liquidity in order to support large-scale disbursements. Despite
substantial efforts from MNOs and other stakeholders, capacity of agents and liquidity remains a
challenge.
AIRTEL
Bidi Bidi is a new settlement and as recently as December 2016, Airtel only had four permanent
agents in the area with an average float of UGX 150,000. Today, Airtel has 27 permanent agents with
an average float of between UGX 300,000 – 500,000. On days when beneficiaries are due to cash-
out their funds, Airtel (via its dealers/distributors, also known as ‘master agents’) ensures there are a
further 20 roving (non-permanent) agents that come to the settlement to support cash-out.
MTN
MTN has 23 permanent agents in the settlement and employs a number of unique strategies to
ensure a robust agent network, including hiring a reliable franchise-dealer in charge of the territory to
manage liquidation of agents. The dealer has recruited a helper and given him a motorbike to drive
around the settlement to help liquidate agents by rebalancing their e-money float and cash. During
cash-out days, MTN also brings in additional agents to facilitate cash-outs.
11. GSMA, 2017, Landscape Report: Mobile Money, Humanitarian Cash Transfers and Displaced Populations https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2017/05/
Mobile_Money_Humanitarian_Cash_Transfers.pdf
12. UNCDF, July 2017, Time for Action: http://mm4p.uncdf.org/tags/solidarity-summit
Success Factors | 31
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
For HCT projects, a common and realistic their payment partners must be aligned on their
understanding of the challenges, opportunities and objectives – a process that can be made smoother
costs associated with serving displaced populations if there is sufficient expertise of the private sector,
via mobile money help to determine project within humanitarian organisations, as well as of the
feasibility, as well as operational and financial complexities of mobile money ecosystems.
sustainability. Humanitarian organisations and
BIDI BIDI
Mercy Corps’ Uganda project team had extensive technical experience of mobile technology, making
all components of the HCT project smoother – from negotiation with the MNOs at the outset, to
interpretation of challenges and proposals for innovative solutions.
IRC staff working on the project had interacted with MTN’s mobile money product in the past and
were familiar with how it worked. This reduced the amount of capacity building necessary, speeding
up the process of familiarising the IRC’s project team with how the product works, the security
features and potential risk areas (e.g. PIN security). When it came to IRC working alongside MTN to
educate beneficiaries on mobile money awareness training, including addressing issues such as PIN
security, mobile money fraudsters, general safety and security, the process was a lot smoother and
quicker.
32 | Success Factors
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
BIDI BIDI
The beneficiaries of Mercy Corps’ and IRC’s projects were Persons with Specific Needs (PSNs) -
including women and child-headed households, elderly (60+), chronically ill, physically or mentally
disabled and lactating or pregnant mothers; a demographic who are the least likely to have previously
owned or used a mobile phone and adopted mobile money. Therefore, it was crucial for the
implementing partners to dedicate additional time and resource to ensuring that these beneficiaries
had the sufficient digital literacy to effectively use mobile money as a form of cash transfer. The fact
that there was pre-existing capacity to use mobile money in the communities, given that mobile
money is also available in South Sudan, meant that beneficiaries had an awareness of mobile money
as a service.
Mercy Corps and the IRC, alongside the MNOs, conducted group meetings with beneficiaries in each
of the villages targeted, to educate them on the process for obtaining money via Airtel Money and
MTN, including how to ensure the security of their mobile money accounts and PINs. Sessions on the
purpose of the unconditional cash transfers, to sensitise beneficiaries on the suggested ways to spend
the money, were also conducted.
The IRC and Mercy Corps ensured that their staff were present and visible at the cash distribution
points to assist beneficiaries on any issues with cashing out. Toll free call centres and protection
information points were also setup to support beneficiaries with any queries. These investments in
capacity building, training and support services for beneficiaries were critical for ensuring that PSNs
could efficiently receive their cash transfers. Further research is needed to measure the success of
such strategies and understand the socio-economic impact of HCTs on refugees in Bidi Bidi.
Success Factors | 33
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
7 Challenges
13. GSMA, August 2015, Proportional risk-based AML/CFT regimes for mobile money https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2015/10/Proportion-
al-risk-based-AMLCFT-regimes-for-mobile-money.pdf
14. FATF Guidance: Anti-Money Laundering and Terrorist Financing Measures and Financial Inclusionhttp://www.fatf-gafi.org/publications/financialinclusion/documents/revisedguidanceon-
amlcftandfinancialinclusion.html
15. GSMA, September 2017, Enabling Access to Mobile Services for the Forcibly Displaced https://www.gsma.com/mobilefordevelopment/programme/digital-identity/enabling-access-mo-
bile-services-forcibly-displaced
34 | Challenges
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
UGANDA
In April 2017, the Uganda Communications The deadline for SIM re-registration was later
Commission (UCC) issued a directive to extended to 20th May and subsequently to 30th
deactivate any SIM cards that had not been August.
registered using national IDs by 20th April
The implication of this Directive on refugees
(within seven days), following an initial deadline
was even more problematic, no longer allowing
to deactivate by March 29th. Previously, UCC
refugees to register for SIM cards and mobile
accepted Government-issued identification
money accounts with previously accepted
documents including passports and driving
identification documents, such as UNHCR ID. In
permits. The consequences of the new Directive
response, Airtel and MTN went to the regulator
were drastic on a national scale. An estimated
to highlight the issue of refugees being excluded
15 million Ugandans had registered for national
from the use of mobile services due to the
IDs, while approximately 21 million Ugandans
new KYC requirements. The regulator agreed
had registered SIM cards. This left around 6
to accept refugee biometric IDs issued by the
million Ugandans to register for national IDs in
Office of the Prime Minister (OPM). As of May
seven days16 and then re-register their SIM cards,
2017, 81 percent of refugees and asylum seekers
or risk having their phone lines de-activated.
in Uganda had been biometrically registered.17
BIDI BIDI
There were immediate implications of the UCC These examples show that, despite challenging
Directive for stakeholders with humanitarian regulatory environments, MNOs and NGOs,
cash transfer projects already underway. The together with other stakeholders, can advocate
Directive impacted Mercy Corps’ project, for sufficient and achievable KYC requirements,
culminating in SIM cards being blocked the as well as work together to find innovative
night before one of the cash-out days in April solutions to overcome temporary bottlenecks.
2017. Money had already been transferred to
To combat such challenges, GSMA has worked
the refugee SIM cards but Airtel reacted quickly
with key stakeholders to develop a policy note,
by crediting the cash back into Mercy Corps
highlighting identity-related barriers faced by
account.
underserved populations who lack identification
For IRC, their project went live several months documents. The policy note18 outlines a number
after the UCC Directive, meaning that a of recommendations for governments on why
significant proportion of beneficiaries in their they should, and how they could create enabling
operating zones already had been issued with an environments that allow forcibly displaced
attestation card (OPM ID). To avoid delaying the populations to access mobile connectivity and
projects, IRC asked refugees without the OPM ID mobile money services.
(approximately 30%) to nominate a relative to
receive the cash on their behalf.
16. NTV, Experts say UCC Directive on SIM card registration could have far reaching implications, April 2017, http://www.ntv.co.ug/news/local/14/apr/2017/experts-say-ucc-directive-sim-
card-registration-could-have-far-reaching#sthash.0GkrWVgV.dpbs
17. UNCDF, MM4P, 2017, Study on Know-Your-Customer Requirements for Digital Financial Services in Uganda http://mm4p.uncdf.org/sites/default/files/Documents/know-your-custom-
er_requirements_summary_revised_15-09.pdf
18. GSMA, September 2017, Enabling Access to Mobile Services for the Forcibly Displaced https://www.gsma.com/mobilefordevelopment/programme/digital-identity/enabling-access-mo-
bile-services-forcibly-displaced
Challenges | 35
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
Another key challenge experienced by NGOs was Even within the same country, different MNOs can
the due diligence process, whereby humanitarian apply varying due diligence requirements due to
organisations present the requested documentation ambiguity in the regulation, and the stringency of
to the MNO to meet their requirements before their own risk management policies.
they can open a mobile bulk payment account.
BIDI BIDI
Mercy Corps and IRC experienced challenges MTN were rigorous, resulting in them working
when it came to opening mobile bulk payment solely with Airtel for the disbursement of
accounts with Airtel and MTN. It took IRC three funds. This example highlights the issue that
months for the contract to be signed, due to even within the same country, different MNOs
difficulties involved in acquiring the necessary apply varying due diligence requirements due
documentation to become a client. to ambiguity in the regulation, making the due
diligence process for humanitarian organisations
For Mercy Corps, the due diligence requirements
complex.
for them to have a bulk payment account with
36 | Challenges
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
BIDI BIDI
The negative implications of low handset • Beneficiaries cannot be notified about arrival
penetration for humanitarian cash transfers are of funds via SMS
wide-ranging making operations more complex
• A higher proportion of SIM cards are damaged
and challenging for beneficiaries, MNOs and
or lost
NGOs. However, all stakeholders are finding
innovative solutions, proving that under such • Financial inclusion impact is low and
circumstances humanitarian cash transfer profitability limited for the mobile money
projects are still be feasible. In Bidi Bidi, low provider
handset penetration resulted in the following In an effort to minimise such challenges and risks
complications: in the future, Mercy Corps solicited funding from
• Additional time required to perform cash-outs NetHope to subsidise 20,000 feature phones
due to the need to insert and extract SIM cards and 1,050 smartphones for vulnerable refugees
from agents’ phones in Bidi Bidi, at a cost of less than US$ 3 per
refugee. Simple interventions such as this can go
• Intense use of mobile phones by agents
a long way in solving such challenges.
requires extra charging stations
Challenges | 37
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
Beneficiaries of humanitarian cash transfer projects denominations of money for each beneficiary. This
in Bidi Bidi typically cash-out the full amount proves difficult when smaller notes are necessary as
transferred to them. Therefore, during large it can be challenging to get hold of a large quantity
cash-out cycles, agents must have the correct of these smaller denominations.
BIDI BIDI
At first, Mercy Corps’ plan was to transfer Airtel solved this challenge by partnering
each beneficiary US$ 10 (fluctuates around with a greater number of financial institutions
UGX 38,000) per month. For the first transfer to expose mobile money agents to different
(involving 667 beneficiaries), agents experienced sources through which to access physical cash.
no issues obtaining lower value bank notes, A more straightforward solution was for the
however when the number of beneficiaries was IRC to fix disbursements at UGX 40,000, even if
increased to 1,500, agents struggled to obtain this was a little over or under the US$ 11 amount
the lower value notes from the banks (agents initially proposed.
needed 3 x 1,000 shilling notes per customer).
38 | Challenges
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
GiveDirectly – Can large cash grants II is in south-western Uganda and has been
accelerate a refugee’s journey to self- hosting refugees since 1984, primarily from DRC.
sufficiency? Refugees in Kyaka II are at a more advanced
stage of displacement compared to those in
GiveDirectly, an NGO that delivers unconditional
Bidi Bidi refugee settlement. Whilst Mercy Corps
cash transfers to the extreme poor in Africa, is
and IRC are responding to the acute needs of
undertaking a new initiative in Uganda to test
refugees who have very recently been displaced,
whether providing refugees with large cash
GiveDirectly is addressing the longer-term needs
grants enables them to accelerate their journey
of refugees.
towards self-sufficiency.
A total of approximately US$ 600 (on par
According to Joanna Macrae, Director, European
with an average household annual income)
Partnerships, GiveDirectly, “Given the fact that
will be transferred via mobile money in three
refugees increasingly remain in exile for long
tranches over three months. The first instalment
periods of time, this project seeks to address
is approximately 10% of the total transfer
how we can help refugees rebuild their lives
and the latter two instalments each comprise
in the long-term. Instead of offering small
approximately 45% of the total transfer.
payments which are unlikely to allow them to
overcome savings and credit constraints, this GiveDirectly will work in partnership with the
project will deliver larger payments which will Government of Uganda and UNHCR to develop
help people to invest in assets and as a result a robust approach to targeting and registration
improve their overall income.” of recipients into the project. Field officers will
provide basic mobile phones to households
The project also aims to contribute to poverty
without them, and also deliver basic training
eradication and economic growth for host
on how to use mobile money to receive the
communities, and to strengthen social cohesion
transfers. This is an important component of
between the refugee and host communities.
the project given that a recent study suggests
In this unique approach, GiveDirectly has that just 15% of refugees had phones and 6%
partnered with MTN to deliver unconditional had access to mobile money. The value of the
cash transfers to refugee households in Kyaka II mobile money account as a savings instrument,
settlement, as well as 800 households living in particularly given the comparatively larger sums
extreme poverty in the host community. Kyaka of money being transferred to refugees, is high.
Challenges | 39
Humanitarian Payment Digitisation: Focus On Uganda’s Bidi Bidi Refugee Settlement
8 Conclusion and
Future Thinking
In Bidi Bidi refugee settlement, mobile network challenge, a workaround solution was found to
operators have shown a great deal of goodwill solve the problem. This highlights the importance of
to ensure that humanitarian cash transfer (HCT) strong and trusting partnerships.
projects can be a success, meeting the needs of
Looking to the future, for HCT to be profitable for
refugees. Given the complexity of digitising HCTs,
MNOs, particularly in areas where mobile money
especially for areas previously not covered by GSM
is nascent, MNOs must scale both mobile money
or mobile money agent networks, MNOs have had
transactions, by building out the product ecosystem,
to invest in building infrastructure from scratch. This
and scale GSM revenue. Delivering HCTs to a
has also been supported by development agencies,
beneficiary’s mobile money account, rather than as
who will continue to play a key role until the
a voucher, will accelerate this process.
business case becomes more sustainable.
Using mobile money as the digital modality of
NGOs have also had to put in extra time and
choice can connect refugees to a range of financial
resource to see projects through to the end,
and other mobile-enabled services, increasing the
despite challenging and fast-changing regulatory
potential for financial inclusion, whilst increasing
environments. This study makes it clear that if
transparency, safety, cost saving and efficiency
the private sector is to successfully partner with
for donors and humanitarian organisations.
the humanitarian sector to deliver HCTs, then the
Improving handset ownership rates will be key to
national financial regulator must consider refugees
achieving these common objectives. Whilst this
as a distinct set of individuals, with unique needs
research focuses on the operational success factors
and circumstances, thereby ensuring that KYC
and challenges for MNOs and NGOs delivering
requirement is proportional.
humanitarian cash transfer projects in Bidi Bidi,
While the challenges are many, so are the innovative further research is needed to understand and
solutions being implemented. In both of the HCT measure the socio-economic impact of HCTs for
projects documented in this case study, for every beneficiaries.