In recent years, much investment and research has focused on the potential of cash-based assistance to equip low-income and crisis-affected people with financial services that can improve their long-term well-being. What we find is that doing digital bulk payments right is not as easy as some have thought. So far, few recipients have used their accounts for much beyond receiving transfers and cashing out, especially in emergency cash transfer contexts. Lately, the World Food Programme (WFP) Kenya’s work in Kenyan refugee camps has made me wonder whether we have had difficulty linking digital bulk payments to financial inclusion partly because we have been focusing on recipients but largely ignoring traders. Could we be missing an opportunity to advance financial inclusion by bringing traders in recipient communities on board with mobile money?
In July 2015, WFP Kenya introduced a mobile cash transfer program called Bamba Chakula (literally translated as “get your food”) in the refugee camps of Kakuma and Dadaab, later expanding it to the surrounding settlements. Unlike other transfer programs, Bamba Chakula payments are transferred through a specifically designed mobile payments system that allows refugees to buy food from the local markets with cash from their mobile phones. The aim of the program is to increase refugees’ choice and control over what they eat while boosting market demand for local produce and introducing refugees and traders to mobile payments.
With the introduction of Bamba Chakula, WFP Kenya contracted local traders — many of whom are themselves refugees — to accept the mobile payments and sell their goods to Bamba Chakula recipients. The selection and training of traders proved to be more challenging than in other cash transfer programs since mobile payments were not used as widely in the camps and surrounding settlements as they are in other parts of Kenya. Although most of the traders selected for the program were familiar with the concept of mobile money, few had used it. This meant that WFP Kenya and its payments service partner, Safaricom, had to help traders open accounts and register merchant tills. They also had to train them intensively on processing Bamba Chakula payments and transferring funds from their tills to their personal accounts. Despite these challenges, however, the focus on traders seems to be a worthwhile investment.
Lolem Boyo Emilat, a widow and mother of four, is one of the traders that WFP Kenya contracted under this program. Lolem has said that it was a difficult journey for her to adopt this new technology, invest in stocking up her vegetable stand, and meet the program’s trader requirements. But today she knows that it was the right decision. Starting as a vegetable seller along the dusty streets of Kakuma with no more than 400 Kenyan shillings (about $4) in her pockets, she has become a saleswoman with a six-digit mobile wallet balance, was elected as a trader coordinator, and is now mentoring others who are starting to use mobile payments.
“At first, carrying out transactions was a very big challenge for me. I had to call my cousin to help me since I had no confidence and didn’t understand the processes very well. I was always on the phone with the WFP Kenya team asking for guidance. Thanks to the WFP, I’m now an enlightened business woman." — Lolem Boyo Emilat, merchant in the Kalobeyei settlement in northern Kenya
Is this not just the type of story we have been searching for in digital cash transfers programs to prove the financial inclusion hypothesis? Stories like Lolem’s show that spurring uptake and continuous use of mobile wallets among low-income merchants, including refugee merchants, can become a real success for financial inclusion. Her story also provides a glimpse into how accepting mobile money from bulk payment recipients can lead to a substantial improvement in a trader’s welfare.
It seems likely that the primary use cases for recipients of digital bulk payments programs will remain cash-outs, occasional money storage, and receipt of payments from others. Especially in social protection and humanitarian contexts, we may need to wait a bit longer to see significant financial inclusion and welfare outcomes for recipients. In the nearer term, there might be an opportunity to advance financial inclusion by investing in efforts to get small traders like Lolem on board with digital payments through training and targeted financial services that can help them grow their small businesses. When paired with a revenue opportunity, the value of using digital financial services is much more apparent for traders.
And if such efforts lead to more digital payments service points, the value proposition for recipients to go digital may become more evident as well.