 Executive Vice President, Program Strategy and Institutional Relations, Grameen Foundation

Lauren Hendricks

Newly arrived South Sudanese refugees at the Bidi Bidi camp have few resources, but mobile money and agent banking are among several potential vehicles for financial inclusion. 

Blog Post

Lauren Hendricks of the Grameen Foundation recently spent time at the Bidi Bidi camp. Below are her reflections.

The Bidi Bidi refugee camp, in northwestern Uganda, is the largest refugee settlement in the country, and the second-largest refugee camp in the world, hosting 220,000 refugees who have fled the devastation and humanitarian crisis of the protracted civil war in South Sudan. In contrast to long-established refugee settlements elsewhere in the country, the inhabitants of <a href="https://www.theguardian.com/world/2018/may/19/inside-world-largest-refugee-camp-uganda-south-sudan-civil-war">Bidi Bidi</a> are newcomers: all of them have arrived since the 2016 “<a href="https://reliefweb.int/report/south-sudan/south-sudan-finding-way-forward-after-july-2016-crisis">July Crisis</a>” in South Sudan.

Because of the long-term stability, favorable policy and social environment, and freedom of movement in Uganda, the majority of refugees in more established camps are either already engaging in small businesses or would like to start one (a recent World Bank study cited that 72 percent of refugees are operating some sort of micro or agri-business.) But at Bidi Bidi, the relationships and arrangements among people that create an active economy have not had time to develop, and economic activity remains low. These refugees arrived with literally just the clothes on their back and the few assets they could carry, and are to a greater extent than most refugees in Uganda, still struggling to establish themselves and supplement the limited support NGOs and the UN can provide.

However, there is a potential game changer: mobile phones and mobile money are widely available, and they hold enormous potential for generating economic activity. <a href="https://grameenfoundation.org/where-we-work/sub-saharan-africa">Grameen Foundation</a> is working with <a href="https://www.gsma.com/r/mobileeconomy/sub-saharan-africa/">GSMA</a> (the association of mobile network operators) to develop ways to increase financial inclusion among the refugees. In my visit to Bidi Bidi to consider how mobile money could help kick start the camp economy activity, I found many possibilities.

The challenge is to make it easier for people to make payments. Right now, many people receive transfers from abroad and from relief agencies via mobile money. In order to use this money for purchases, they either need to find an agent who can cash it out or a merchant who accepts mobile payments. Both are in extremely short supply in Bidi Bidi. Currently when refugees receive transfers from abroad, or from relief agencies, it can take up to a week to find an agent with liquidity. The camp has only 17 agents for over 200,000 people. To reach the ideal penetration ratio of 1,000 to 1 it would need ten times as many agents.

Our work has shown that a focus on female agents will pay off, especially because a majority of the refugees are in women-headed families. Increasing the number of agents cannot be done all at once, however. Currently, agents report an average of 20-30 transactions per day, which does not suggest an overwhelming demand. The pace of recruitment of new agents would need to track the development of the payments and transfer ecosystem within the camps.
<blockquote>A focus on female agents will pay off, especially because a majority of the refugees are in women-headed families.</blockquote>
Equally important is acceptance of mobile money payments by local merchants, which will allow refugees to use mobile money to purchase food and essential goods. Currently, merchants in the camps accept only cash. When refugees cannot turn their relief and transfer payments into purchases, they face severe delays in access to food and essentials. Many merchants believe that accepting mobile money is expensive, but new products are on offer that reduce fees significantly.

Another supporting element for creating an active payments ecosystem is to attract a "super agent," such as a microfinance institution (MFI) or bank that can help agents and merchants balance their liquidity, an essential function. One possibility is <a href="https://rufimfi.com/">RUFI</a>, a unique MFI founded by South Sudanese refugees in 2009 and working on both sides of the South Sudan-Uganda border, and the only microfinance institution serving refugees in Bidi Bidi. RUFI is also an agent for Centenary Bank, offering savings and other services. Currently RUFI’s nearest office is over 30 kilometers away, a significant distance barrier for refugees. By locating in Bidi Bidi and becoming a super agent for mobile money, RUFI could not only help manage agent liquidity, it could also get to know agents and merchants that could become credit clients, and move its own credit and savings transactions to digital form. This would position it well to develop a loan product to help <a href="https://reliefweb.int/report/uganda/refugee-entrepreneurs-boost-host-communities">female entrepreneurs</a> finance the capital needed to become agents.
<blockquote>A super agent can help agents and merchants balance their liquidity and get to know potential clients.</blockquote>
Reports by <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;ved=2ahUKEwiJh6D2mPjiAhXqqFkKHRNtDvAQFjAAegQIAxAC&amp;url=https%3A%2F%2Fwww.uncdf.org%2Fdownload%2Ffile%2F127%2F6633%2Fuganda-refugee-remittances-assessment-report0620v3pdf&amp;usg=AOvVaw1uX4vhWZodJZ-OcUtUJAML">UNCDF</a>, DCA, and Platform for Inclusive Finance indicate that informal savings groups are active in Bidi Bidi settlement, though estimates range widely regarding how many adults participate (from 11 to 49 percent, depending on the report). Working with savings groups could be an effective way to increase digital financial literacy among refugees, increasing their comfort with digital payments. One of the appeals of digital money is its security, and savings groups may be looking for ways to secure their pooled resources, given security issues within the settlement. Encouraging savings groups and their members to use mobile money would help develop the market for mobile money which in turn is needed to support an agent network.

With steps like these, the economy can slowly begin to rev up, providing benefits to all the residents of Bidi Bidi.

A Ugandan Refugee Camp Hosts Potential for Financial Inclusion

&gt; Posted by Lauren Hendricks, Executive Vice President, and Christian Loupeda, Senior Director Financial Inclusion, Grameen Foundation  

<img class="alignright wp-image-23864" style="border: 0 solid #000000" src="https://centerforfinancialinclusionblog.files.wordpress.com/2017/07/thumb_4818000712eb421992b7ee990b13a4db.jpg" alt="" width="330" height="220" />

For poor, rural communities “field force” workers such as mobile money agents or government agricultural extension officers can be lifelines to services and information that bring rural residents greater control over their financial lives and help them increase their incomes and gain a connection to the larger world. But, for women, rather than a bridge, field force workers too often end up being one more hurdle on the way to access resources.

Across the developing world, almost all agricultural extension services <a href="https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2016/04/SOTIR_2015.pdf">lack female participation</a>. Women, on average, comprise 43 percent of the agricultural labor force in developing countries and account for an estimated two-thirds of the world’s 600 million poor livestock keepers. Yet only 15 percent of the world’s agriculture extension agents are women, and only 5 percent of women farmers benefit from extension services--despite the fact that women play a significant role in farming activities from production all the way to commercialization. Similarly, for mobile money agents, GSMA reports that among its members that report on gender, only 23 percent of agents and 37 percent of customers are female.

As Lisa Kienzle mentioned in <a href="https://cfi-blog.org/2017/06/23/helping-women-control-their-financial-lives-through-digital-financial-services/">her post</a> in this series on digital financial services for women, Grameen Foundation has found that a woman often benefits from being able to work with a trusted agent who can directly help her understand and use the services available. That’s why we have helped to develop women as banking agents in the Philippines. We created an independent network of female financial agents who work out of their neighborhood sari-sari (variety) shops. The all-female network now includes 862 trained agents, who bring digital financial services to more than 66,000 low-income clients. Recruiting female agents benefits the end clients, but also the female entreprenuers who become agents who typically see an increase in their own income of at least 20-to-30 percent.

In Burkina Faso, we assisted a partner microfinance institution, Réseau des Caisses Populaires du Burkina (RCPB) in training its female community agents to be financial agents. Previously, these women specialized in the promotion and formation of savings groups. Along with the training, they are equipped with smart phones to provide deposit and withdrawal services for the savings group members. The transactions link back to RCPB’s new digital transaction platform. RCPB is pilot-testing a network of 40 agents in selected communities, leveraging their intimate understanding of savings groups operations and of the financial needs of the women members.

Contact with a female field force worker can help female clients in multiple ways. In Malawi, Zoona reports that female agents help clients stick with a provider and more actively use their accounts. This makes sense. Female agents tend to be more patient and willing to help customers with transactions and women in many markets report that they are <a href="https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/09/2014_DI_Reach-half-of-the-market-Women-and-mobile-money.pdf">more comfortable</a> sharing their personal information with female agents. In Burkina Faso, when asked why she became a financial agent, one agent replied that she was proud to help support her sisters. <a href="https://www.womensworldbanking.org/research/">Evidence shows</a> that female mobile money users tend to need to complete more successful transactions in order to become regular mobile money users. Therefore, having an agent who is willing to assist in the learning process and demystify the service can be the difference between an active user and one who lets her account become dormant out of frustration or humiliation.

There are similar benefits for women farmers working with female extension workers. For example, one study in Nigeria found that women farmers who had females for extension agents had relatively higher levels of awareness, adoption and technical knowledge of recommended practices, as well as greater satisfaction with the quality of agents' services and credibility. However, some clients remain skeptical of female extension agents and sometimes lack confidence in their abilities. A study in Malawi found that while smallholder farmers who had a female extension agent had higher agricultural yields, farmers perceived female agents as less capable and were less likely to pay attention to their messages.

In some instances, social norms hinder women’s freedom to interact with agents. In many cultures the constraints on interactions between men and women limits women’s ability to receive services from men. In 2015, GSMA published <a href="https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2016/04/SOTIR_2015.pdf">new research</a> calculating that the gender gap in mobile money access was 14 percent in low and middle income countries and as high as 38 percent in South Asia, and that a major contributing factor was “the social norms around how women and men make financial decisions in a household, the ‘appropriateness’ of men and women interacting with sales agents of the opposite sex, and community perceptions of male and female roles.”

Female agents can help to overcome such social barriers, and in doing so, help women gain more control over their financial lives. In Somaliland, the hiring of female agents removed a significant barrier to women, who otherwise couldn’t open an account with a male agent. In addition, female agents are a source of inspiration for their peers who may feel empowered to play leadership roles in their communities.

It is important, however, that female agents be incorporated into mainstream field force networks, rather than sidelined into the “female-only” category. This is true even in markets like Somaliland where clients are quite segregated by gender. If they are to bring the maximum benefit to their clients in the field, women agents need to receive the same training and market engagement as male agents. In agricultural extension models of female-only agents targeting only women farmers, those farmers tend to be sidelined into traditional crops, with a focus more on subsistence and nutrition rather than on access to markets and integration into commercial value chains.

More research is needed into the impacts of female agents on women clients. It can be challenging to hire women as field force workers, given that women may have lower literacy and numeracy skills than men, and may have less ability to invest in becoming an agent. To attract more female applicants, agricultural enterprises and mobile network operators need to invest more in dedicated recruitment and training opportunities for women. In order to justify this additional investment, businesses and/or donors need the evidence that this investment will result in greater outreach and benefit for female customers and their communities. If successful that investment could have significant benefits. In the mobile space alone, closing the gender gap is an estimated $170 billion market opportunity.

Have you read?

<a href="https://cfi-blog.org/2017/03/23/will-the-crowd-support-more-women-agents/">Will the Crowd Support More Women Agents?</a>

<a href="https://cfi-blog.org/2017/02/24/why-women-in-smes-lean-out/">Why Women in SMEs Lean Out</a>

<a href="https://cfi-blog.org/2016/04/20/g2p-and-gender-when-will-pakistani-women-be-able-to-withdraw-their-own-money/">G2P and Gender: When Will Pakistani Women Be Able to Withdraw Their Own Money?</a>

&nbsp;

Lauren Hendricks

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