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Can Haiti's informal economy eschew cash and embrace phone-to-phone money transfers?
Neither Bouchereau nor Desrouleaux said how much their companies will charge for the service. Mobile banking costs an average of $3.90 per month in other parts of the world, according to a study by the World Bank.
That’s about 19 percent cheaper than traditional banking, but it could be significant for Haitians, 80 percent of whom lived on $2 a day before the January earthquake killed at least 230,000, left more than 1 million homeless and crippled the economy.
“Life has gotten more expensive. … Before, three milk cans sold for 10 gourdes. Today, one milk can sells for 40 gourdes,” said Duthard Charles, 54, as he checked out a mobile banking demonstration recently. Charles has a bank account but he can’t make withdrawals because he keeps only the minimum balance.
Much the way mobile phones spread in communities that never had landlines, supporters believe mobile banking can surpass bank accounts, credit and debit cards in developing countries.
“It has the potential to be transformative and reach people who have never had access to financial services,” said Sarah Rotman, analyst with the World Bank’s Consultative Group to Assist the Poor.
Although other developing countries have embraced mobile banking, Rotman said Haiti has potentially unique challenges. Because the economy is largely informal, it will be difficult to find a critical mass of merchants who can act as mobile agents. Those agents are points of contact where users go to withdraw from and deposit to their mobile accounts.
“You need some formality and professionalism so that the clients can build trust in the system,” she said. Merchants in Haiti “may be a little below the level of formality that’s needed.”
Convincing Haitians is another challenge.
Oregon-based Mercy Corps is incorporating mobile money into a food aid program that gives families $40 per month to buy beans, rice, cooking oil and corn.
Instead of distributing paper vouchers, Mercy is sending money to mobile bank accounts. A shopper will visit an approved store, buy food and, instead of paying cash, type a series of numbers into their phone — including the amount and a secret code — and the shopkeeper will receive a message that the money has been transferred. The shopkeeper can buy elsewhere using the electronic balance or cash out the balance at a local bank.
In principal, it’s a simple combination of traditional shopping and sending a text message. In reality — especially in a country in which four in 10 adults can’t read — setting up such a service is more difficult.
In a Baptist church two hours north of the capital, Port-au-Prince, about 60 Haitians gathered to hear Sossouvi pitch the service. She treats them like luddites.
“Have you ever sent minutes to another person on the cell phone?” she asks.
“Yes,” they respond tepidly.
“Good. Instead of sending minutes you’ll be sending cash. That’s the idea. Is it a good idea?”
“Yes,” the response grows with the mention of cash.
“Does it sound hard?”
“You won't have to worry about finding the vendors because Mercy Corps is finding them for you. We will do that work. … We will supply the SIM card. The SIM is very important because that’s the place the money will be stored.”
At this, the crowd seems confused. A man in the back of the room shakes his head and crosses his arms. The questions that follow range from what happens if the bank folds to whether they have to spend the money at one store or if they can shop around.
Whether mobile banking can spread through Haiti will depend largely on how readily groups like those in Saint-Marc embrace it.
Sossouvi said it’s about “changing their mindset.”
“Instead of having someone put all their money all year into a raising an animal and selling it — when things could go wrong, like the animal could get sick and die — we’re trying to get them to put it in the bank,” she said. “We have people here storing money under their mattresses. Mobile banking here in Haiti will take off because the need for financial services is so great.”