Financial inclusion is an intermediary target in 8 of the 17 SDGs. Consequently, igniting progress towards the SDGs requires a large-scale push to increase financial inclusion. This blog explores how both start-ups and corporates alike have leveraged the mobile money ecosystem to catalyse progress towards the SDGs. Notably, mobile money is a key enabler of innovations within Future Planet’s impact areas of food security, climate action, education and health.
Igniting faster progress towards the SDGs requires a large-scale push to increase financial inclusion. One channel through which this can be achieved is mobile money. This is technology which allows users to receive, store, spend and send money using just a mobile phone and its SMS signal. In Sub-Saharan Africa, mobile phone adoption is forecasted to grow by 4.3% year-on-year until 2025. With greater mobile penetration comes the potential for sustainable ventures to reach a previously ‘unbanked’ population and achieve an impact on a much larger scale.
Two features of mobile money are particularly salient. First, it provides a safe and low-cost method of saving money. For example, a study in Uganda found that the use of mobile money increased food expenditures per adult by nine percentage points and reduced perceived food insecurity providing valuable liquidity to vulnerable households. Second, mobiles provide a fast and low-cost method of sending and receiving money. In fact, remittances sent via mobile transfer are on average 50% cheaper than traditional methods. Consequently, the well-known mobile payment service M-PESA in Kenya was found to increase per-capita consumption and lift 194,000 households, or 2% of all households in Kenya, out of poverty.
While financial inclusion is an intermediary target in 8 of the 17 SDGs, how have start-ups leveraged the mobile money ecosystem to catalyse progress towards the SDGs? Let’s touch on a few of Future Planet’s impact areas; climate action, education and health.
SDG 13 - Climate Action
Climate change threatens to drive an estimated 100 million people into poverty by 2030. Mobile money innovations plays a key role in mitigating climate risks by helping farmers become more resilient and helping communities that have been displaced by climate shocks. Index insurance, which can act as a safety-net for farmers following climate shocks on their crops, use mobile money to distribute payouts to farmers. In a similar fashion, government-to-person (GTP) payments are often enabled by mobile money. For instance, in 2014, the Government of Fiji partnered with Vodafone MPaisa to disburse assistance to over 32,000 households affected by Tropical Cyclone Winston. In the Philippines, Mercy Corps and BanKO implemented a mobile money programme to distribute financial aid following Typhoon Haiyan in 2013.
Integrating payment technology with climate ventures is nothing new. Alipay, an online mobile and payment platform with over a billion users, launched Alipay Ant Forest in 2016, a mobile app which rewards users with ‘green points’ for undertaking low-carbon activities. For every virtual tree a user plants, Alipay plants a real tree. To date, 500m users have planted 100m trees in arid areas throughout China spanning a landmass of 933km2 (equivalent to the size of 130,000 football fields!)
SDG 4 - Quality Education
Increasingly, mobile technology is being used by EdTech start-ups across emerging markets to enhance and supplement traditional ‘brick and mortar’ schooling, providing better access to primary, secondary and tertiary education or professional development training.
In Africa, collaboration between mobile money and EdTech start-ups is mutually beneficial. Mobile operators have reached the scale that start-ups lack, such that EdTechs can address infrastructure challenges related to delivering and supporting education where conventional models fail or are non-existent, particularly in remote rural areas. On the other hand, start-ups have the local innovation mobile operators need. For instance, Kenyan start-up Eneza Education partnered with mobile operator Safaricom to launch a virtual classroom available on any mobile phone. To date, it has provided over 10 million learners with access to primary and secondary education resources. In a similar purely ‘offline’ offering, Ghanaian start-up Chalkboard Education leverages existing mobile networks to provide access to university courses for disadvantaged students via distance learning using just SMS. In Uganda, a flexible education loan using mobile money wallets and a pay- as-you-go (PAYG) business model is helping parents pay school fees. In households using this product, only 15% of students missed a day of school compared to 24% of students in households that did not use the product.
Deeper, more integrated partnerships between mobile operators and EdTech ventures are necessary to build on these gains to ensure access to quality education can continue to be offered at scale. In this context, the mobile industry has a significant role to play in improving the accessibility, affordability and quality of education in emerging markets.
SDG 3 – Good Health and Well-Being
When it comes to global health, mobile money lowers financial barriers to receiving healthcare by lowering the costs of registering with health insurance, paying premiums, and receiving disbursements. In Kenya, M- Tiba’s mobile health wallet enables health payments, savings and access to credit via mobile money. Since its launch in 2016, it has facilitated 155,000 patient visits to medical facilities and $2m in medical payouts. It also contributes towards disease detection. In Pakistan, providing incentives via mobile money resulted in a 300% increase in tuberculosis detection over one year and a 90% increase in patients adhering to treatment.
A View to the Future
A plethora of rigorous evidence exists on the enabling role of the mobile money ecosystem in progressing the SDGs. Deeper, more integrated approaches are needed between mobile providers, start-ups and investors to capitalise on potential synergies in collaboration. Here at Future Planet, we provide growth financing to scale these innovative solutions. In doing so, we ensure that innovative start-ups can realise their growth potential to ensure a healthier, safer and fairer future planet.