Digital Financial Services / Mobile Money Solutions for Cash-Based Transfers in Jordan

Context: Jordan

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Central role in the refugee crisis • Population of 9.5M, 3M of which are non-

Jordanians • Of non-Jordanians, registered refugees

total approx. 730,000, with an estimated 1.5M total Syrian refugees (including unregistered)

Well-coordinated response efforts • Emphasis on both relief and resilience

in the Jordan Response Plan 2016 – 2018

• Trend towards unconditional CTPs

Strong foundation for DFS / mobile money to be used for cash assistance

• Supportive regulatory environment • PSPs poised to ramp-up operations • Reliable telecommunications infrastructure

Why the focus on digital financial services / mobile money?

A growing body of evidence demonstrates that DFS / mobile money helps to improve welfare and promote resilience

Rwanda: In the aftermath of an earthquake, mobile transfers

allowed households to receive remittances from more people, from longer distances to help

recover

Increases flow of remittances

Afghanistan: Mobile wallets provided a more accessible account to save than banks;

coupled with a default contribution savings product, 40% of individuals were more

likely to save

Provides an accessible account to store / save

funds

Kenya: Access to mobile money lifted 2% of households out of

poverty, with greater impact on female-headed households

Helps to increase savings and reduce poverty

Niger: Cash transfer recipients who received funds through

mobile money traveled shorter distances and waited for less time than those who received

cash manually

Saves time and costs in accessing cash transfers

1. Jack, W. & Suri , T. (2012), “Risk sharing and transaction costs: Evidence from Kenya’s mobile money revolution”, Working Paper. 2. Blumenstock, J.E., N. Eagle, and M. Fafchamps, “Risk Sharing and Mobile Phones: Evidence in the Aftermath of Natural Disasters,” Working Paper, 2014. 3. Blumenstock, J., Ca llen, M. & Ghani, T. (2015), “Mobile-izing Savings: Experimental Evidence on the Impact of Automatic Contributions in Afghanistan”. 4. Jack, W. & Suri , T. (2016), “The long-run poverty and gender impacts of mobile money,” Science 354 (6317), 1288-1292. 5. Aker, Jenny C., Rachid Boumnijel, Amanda McClelland and Niall Tierney. 2014. “Payment Mechanisms and Anti-Poverty Programs: Evidence from a Mobile Money Cash Transfer Experiment in Niger.” Center for Global Development Working Paper 268.

Summary of Assessment Findings

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Jordanian mobile money industry • Has all the necessary ingredients to scale, but a strong business case is needed for mobile money

providers to increase investments in order to accelerate wallet uptake and usage • Initiatives to promote the use of mobile money are underway but lack coordination, resulting in small-

scale, siloed efforts • CTPs present a strong entry point and a potentially viable business case

Cash transfer programs • CTP disbursement systems of government and humanitarian agencies are too narrowly designed; they

do not provide an account in the individual’s name to store funds, spend, and transact • Agencies have expressed desire for a system that both improves efficiency of disbursement and

facilitates financial inclusion and asset building of beneficiaries

Financial services needs of refugees and Jordanians • Refugees and Jordanians experience pain points related to the use of cash (security, transaction costs),

inadequacy of informal financial services, and challenges with existing CTP disbursement systems • Mobile money provides a pathway to financial inclusion that can help to address these pain points

Mobile Money for Resilience (MM4R) Initiative

Humanitarian Agencies, NGOs

Government Agencies

Private Sector (PSPs, Banks, MFIs)

Market Actors Customers / Beneficiaries

Refugees

Jordanians

Merchants / MSMEs

Grant funding

Convening power

Expertise and research capabilities

Debt, equity, credit guarantees

Implementation Tools

Objective Improve the quality of life of refugees and Jordanians by expanding access to finance, developing the DFS ecosystem, and improving the effectiveness of CTPs

MM4R Workstreams

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Incubation and Acceleration

• Design pilots / scale-up programs • Develop and facilitate

partnerships • Manage pilots / programs

Research and Knowledge Management

• Oversee quantitative and qualitative surveys, impact assessments

• Develop white papers and blogs, and facilitate industry workshops

• Establish a DFS Academy focused on promoting best practices in Jordan and globally

Products and Services Development • Work with agencies, private

sector to develop and promote products for various customer segments and use cases (e.g. savings, insurance, remittances, merchant payments)

Payment Tech

• Test payment tech innovations (e.g. blockchain, regtech, credit innovations)

DFS Awareness and Financial Capability

• Promote awareness of DFS / MM among consumers, government / humanitarian agencies, and private sector

• Enhance financial capability of refugees and low-income Jordanians

Partnerships and Outreach • Lead outreach to and

management of partnerships with donors and government / humanitarian agencies

Institutional Development

• Enhance CBJ capacity (people, systems, processes)

• Strengthen capacity of private sectors and agencies using DFS

Public-private Cooperation Enabling Environment and Advocacy

Financial Capability Knowledge Capture and Dissemination

Regulations and Advocacy

• Strengthen regulatory environment for DFS

• Advocacy to align CTP requirements with principles of cash-based aid

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Thank you!