How Haiti is fighting poverty by killing cash
In Haiti, cash is escaping from wallets and savings accounts are breaking free from brick-and-mortar banks.
Two years after 2010鈥檚 devastating earthquake, mobile money has taken off in the island nation. While the country has seen setbacks in many areas and continues to struggle, one bright spot is the transformation of the country鈥檚 traditional banking sector.
Physical banks were wiped away by the quake and subsequent hurricane, and a mobile banking network that uses cell phones has grown up in their place.
Toting your money around on a cell phone might sound scary, but for many Haitians it鈥檚 more secure than carrying around a wallet, which isn鈥檛 protected by a PIN. The handy infographic to the left shows how a mobile money transaction works.
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In the months following the quake, both (our parent organization) and sponsored separate Haitian cell phone companies, and , to help mobile money take off, with the Gates Foundation offering monetary incentives for and in order to get entrepreneurial engines revving.
For many Haitians, mobile money can open a door to personal choice. Mercy Corps has used mobile money to distribute food aid to families across Haiti and deliver payments from its . Instead of spending hours waiting in line for a cash payment or a food ration, Haitians receive a wireless money transfer on their phones once a month.
The technology holds promises for the future, too. Long-term, mobile money could be expanded so that it鈥檚 accessible to everyone for all of their personal purchases. Haitians could use mobile money to send remittances to family members in other parts of the country, . And after visiting with Mercy Corps staff in Haiti in 2010, New York Times columnist Nicholas Kristof . Most banks won鈥檛 accept very small deposits, but now a mobile phone could double as a savings account. It could blow the microsavings sector wide open.
Mobile money could also help make Haitians healthier. Even before the earthquake hit, Haiti鈥檚 public health indicators , according to the US Department of State, and those problems were only compounded by the disaster.
In Kenya, one of the first countries to adopt mobile money, customers can use it to pay 鈥� and save up for 鈥� health services. Expectant mothers use it to save for health care, and in rural communities Kenyans have used the service to pay for access to clean water, . Looking forward, a mash-up of mobile health and mobile money technologies in Haiti could lead to new insurance plans and health voucher programs, according to .
With mobile money quickly gaining widespread use, the developing world is leaps ahead of the developed. Mobile money launched in Kenya in 2003, according to The National Archives, but similar service in the United States wasn鈥檛 released until September of last year and has yet to truly take off. Maybe it鈥檚 time for American company executives to start taking a few pointers from Haiti.
鈥� first appeared at , a blog published by .
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