The Bill & Melinda Gates Foundation and the U.S. Agency for International Development have announced a $10 million fund to jumpstart financial services by mobile phone in Haiti and expedite the delivery of cash assistance by humanitarian agencies to victims of January's devastating earthquake.
The fund will offer cash awards to companies that initiate mobile financial services in the impoverished country. The first company to develop a mobile money service that meets certain criteria in the next six months will receive $2.5 million. The second such operator to launch and meet the benchmarks within a year will receive $1.5 million. Another $6 million will be awarded as the first five million transactions take place, divided among those operators that contribute to the total number of transactions.
Enabling Haitians to send, receive, and store money using their mobile phones has the potential to dramatically improve their lives while leapfrogging conventional banking models to safer, more affordable alternatives. Often called "mobile money," such services reduce the risks and costs of financial transactions, help customers increase their savings, and generate employment. They also can be used to connect people to vital services such as banking, insurance, and utilities, which have proven difficult for Haitians to access.
In the aftermath of the earthquake that destroyed more than a third of the country's bank branches, ATMs, and money transfer stations, cash shortages among Haitians were, and continue to be, widespread. Establishing the new services will help families and individuals, humanitarian agencies, charities, and donors get billions of aid dollars and remittances into the hands of ordinary Haitians.
"Out of the ruins of Haiti's tragic earthquake, there is an unprecedented opportunity to improve the lives of millions of Haitians and unlock the country's economic potential through mobile money," said Mark Suzman, acting president of the foundation's Global Development Program. "Making financial services widely available to the poorest families in the developing world can help break the cycle of poverty by giving them a safe place to save, guard against risks, build assets, and provide opportunities for the next generation."