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Contributors: Cherie Blair and Maura O’Neill

Boosting women’s entrepreneurship via mobile money

By Devex Editor18 December 2012

A woman sells prepaid mobile phone airtime credits.

This guest column was authored by Cherie Blair, founder of the Cherie Blair Foundation for Women, and Maura O’Neill, USAID’s chief innovation officer. It is published here as part of Devex Impact, a global initiative of USAID and Devex that focuses on the intersection of business and global development and connects companies, organizations and professionals to the practical information they need to make an impact.

For Marion, the challenge of starting her own business was not lack of initiative — she had plenty — but rather dearth of startup capital. At 20-years old, Marion dropped out of school because she didn’t have sufficient funds for school fees. In Dar es Salaam, Tanzania, where she lives, this is a common trend for many women and girls, one that stretches across sub-Saharan Africa and far beyond. But Marion was undeterred.

Thanks to her friend’s suggestion, Marion latched onto an idea of selling prepaid mobile airtime to financially support her parents and four siblings with whom she lives. She started working at a small restaurant as a server, in order to save enough money to break into the business. Marion saved and saved, and began to sell airtime in bits and pieces. Yet by the time she turned 22 and made the decision to do it full-time, she was 70,000 Tanzanian shillings ($43) short of the 100,000 TZS ($62) required to finance the initial capital. Marion had nowhere to turn to make up the difference. And now this shortage of cash is keeping her from pursuing what should be a tangible dream — to become an entrepreneur and move into her own home.

Fortunately, new opportunities that will address Marion’s challenges are emerging.

Mobile technology continues to be an enormous growth industry in developing countries, particularly in sub-Saharan Africa, where approximately 3.5 million jobs can be attributed to the mobile industry, according to GSMA. With the surge in mobile connections around the world, there is rightly a great deal of interest in using the technology to maximize development outcomes. This includes the delivery of key information and health services, the use of mobile money for those who are unbanked, and the ability to establish social and business networks without having to travel great distances. For women like Marion, this is an enticing pairing of potential long-term employment and enhanced livelihood.

Despite the gains the mobile telecommunications industry has had nationally, there continues to be significant gaps in how much individuals benefit economically from mobile services and applications. This includes the extent to which women have been able to participate in the retail channels of mobile network operators, beyond the sale of top-up cards and accessories that fetch little profit. These retail chains are not only where basic mobile necessities such as airtime and SIM cards are sold and marketed, but they also serve as the frontlines of the rapidly growing mobile financial services industry. This ballooning sector includes mobile payments and savings, insurance purchases and conditional cash transfers, services that are traditionally unavailable for the unbanked — particularly women. The business of selling mobile products and services can be an important income stream but, in most markets, women are not participating on par with their male counterparts.

This leaves Marion and women like her at a distinct and, frankly, unnecessary disadvantage.

The U.S. Agency for International Development and Cherie Blair Foundation for Women, in partnership with leading mobile operator Millicom, or Tigo, have joined forces for an innovative project to correct this trend and maximize mobile financial service opportunities for women entrepreneurs and their communities throughout Tanzania, Rwanda and Ghana. This public-private partnership will showcase a sustainable and scalable approach to increasing the number of women entrepreneurs working as mobile money agents in the retail networks of mobile operators.

The 18-month partnership will work to address two key challenges that exist throughout the three countries: 1) broad levels of financial exclusion among the general population, and 2) lower levels of women’s participation in mobile retail chains. Both challenges impact Marion’s ability to afford the cost of school, yet the potential mobile solutions broaden her access to financial, health and social services. In becoming a mobile money agent, Marion and other women can begin to redress sub-Saharan Africa’s high rate of unbanked individuals (only 12 percent of the region’s adult population has access to any form of formalized banking). They can do this by bringing in new mobile money clients and keeping them on-board, largely through the trustworthiness and relationship-building that women provide.

Together with leading local microfinance institutions, the project will be working with over 4,000 women to not only increase their income as they conduct mobile money transactions but also improve their financial literacy, business acumen and access to capital — a critical component to business growth that has hampered Marion from launching into it full-time — so that they may establish and expand their own businesses.

Through a series of reduced interest loans and locally tailored business training, the participating women will receive support that has been elusive to-date in mobile money services, thereby improving their capability, confidence and capital. There are also benefits for mobile operators when they include women in mobile value chains, as recent

It will also have multiplying effects for their families and communities-at-large. With this higher-value income stream, thousands of women will have additional funds necessary to invest in their own families, whether that means sending their children to school or paying for medical care or household items. On a larger scale, this improved income might be reinvested in expanding businesses where women can hire additional employees, creating job opportunities for their communities and contributing meaningfully to the local economy. As part of this project, the partners will be assessing the extent to which this could be a successful model for mobile operators around the world to replicate in order to expand mobile money operations and financial inclusion for the unbanked.

This is a new business model that, if proven successful, will achieve positive development outcomes for Marion and her female compatriots, and increased revenue for mobile operators. It applies the best components of both the public and private sectors for enhancing economic growth and equitable participation. For USAID and the Cherie Blair Foundation, we believe that women need increased opportunities in proven growth industries, so that we are not making stand-alone investments. Consider the opportunity that awaits Marion if she can channel income from her mobile money business into a formal education, not just for herself but for her family. This is an opportunity we cannot afford to let pass.

As such, we are tremendously excited to announce this groundbreaking partnership and, together, shape the next mobile revolution — with Marion alongside — in key emerging markets in Africa. We look forward to sharing the project’s progress in the coming year.

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