A $2.5 million prize to get Haitians buying, selling and banking with their mobile phones didn't push the winner into the mobile banking business, but the Gates Foundation's incentive did make the company move much faster.
"It was a real gruesome race," Digicel CEO Maarten Boute after the Bill & Melinda Gates Foundation announced Monday that his company had won the money for being first to establish cell phone banking in Haiti in less than six months.
The foundation plans to give away a total of $10 million to the first companies that help Haitians with mobile banking. The country has three cell phone companies, and one other also has started offering mobile banking.
In the past 4½ years, the Gates Foundation has committed nearly $500 million toward helping the poor get mobile access to financial services, mostly in Africa. The foundation has also given $2 million toward relief efforts in Haiti, including shelter, food, sanitation and health.
The Haitian mobile banking prize was announced in June as a way to push the marketplace toward change. Besides death and destruction, the Jan. 12, 2010, earthquake in Haiti also devastated the country's financial system.
The U.S. Agency for International Development has added another $5 million to the project for technical assistance.
Before the earthquake, fewer than 10 percent of Haitians had ever used a commercial bank, according to USAID. Boute said every Haitian household now has access to a cell phone, either owned or shared, and 37 percent have their own phone.
"That's quite impressive for a country like Haiti, he said.
Carleene Dei, USAID's Haiti mission director, said the project already has increased significantly the number of Haitians with access to banking services, and it has the potential to give universal access thanks the penetration of cell phones in the country.
The ability to both get and use money rapidly will help Haitians with both their emergency and long-term needs, Dei said.
The most difficult challenge to meeting the criteria for the Gates prize was getting bank regulator approval, Boute said. Digicel had already been looking into mobile banking and did a soft launch in Fiji before introducing its mobile money service called Tcho Tcho Mobile in Haiti, where it already a mobile phone company.
In just a few months, the company moved from concept to launch in Haiti, thanks to open-minded and flexible bank regulators, Boute said. Once the regulations were in place, the banks followed.
Haitian citizens are quickly adopting mobile banking thanks in part to companies that have started paying their employees by depositing money on their cell phones, instead of making them wait in line on payday to get their cash.
USAID and nongovernment organizations are also adopting cell phone banking as a way to distribute cash grants to the elderly, mothers with small children and others getting financial aid.
The new way of getting paid is growing in popularity because it is safer than carrying around cash and it saves time that may have been spent waiting in line or traveling to bank branches, Boute said.
Digicel plans to use the Gates Foundation money for customer education, he said, adding that the company joined the race for the digital banking prize "not that much for the money but more for the prestige."
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Online:
Digicel: http://digicelgroup.com
Gates Foundation: http://www.gatesfoundation.org
USAID: http://www.usaid.gov/