Going cash lite

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Going cash lite building supply and demand
ITU Workshop on Digital Financial Services and
Financial Inclusion (Geneva, Switzerland, 4
December 2014)

• Till Bruett,
• Programme Manager, UN Capital Development Fund,
  mm4p_at_uncdf.org

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UNCDFs focus financing for development

• 2 KEY AREAS OF WORK
• Local Development Finance
• Focus on public finance and decentralization
• Inclusive Finance
• Focus on access to financial services for
  individuals and small enterprises

• COMMON THREADS
• Goal inclusive and sustainable growth
• Approach piloting leading to national
  reforms/scalability
• Tools capital investment technical assistance

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Local Development Finance where we work

• We help governments by
• 1. Fostering decentralization and local
  governments capacity to provide services
• We pilot and scale up sub-national planning
  systems
• We pilot and scale up Public Finance Management
  systems
• 2. Leveraging local governments capacity to meet
  specific development challenges
• climate change resilience
• food security
• social protection
• gender equality
• local economic development

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Local Development Finance where we work
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Inclusive Finance where we work

• We bring the financial sector to the poor by
• Building inclusive financial sectors
• We support policy makers and regulators
• We finance and incentive financial service
  providers
• We build support services for microfinance
• We promote financial literacy and consumer
  protection
• (2) Testing innovative approaches globally
• Bring market leaders to LDCs (MicroLead)
• Enable youth access to financial services
  (YouthStart)
• Lifting the poor out of energy poverty
  (CleanStart)
• Spreading technology-based banking in LDCs
  (Mobile Money for the Poor)
• Innovations in Remittances and Micro-insurance
• Empowering people through electronic payments
  (Better than Cash)

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Inclusive Finance where we work
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Mobile Money for the Poor

• Started through a joint UNCDF-UNDP-EU-AusAid
  Pacific Financial Inclusion Programme
• Developed to build digital finance ecosystems
  that can serve all citizens, including rural and
  women in LDCs
• Started March, 2012, Based in Brussels, Belgium
• Programs in Uganda, Malawi, Liberia, Lao and
  Nepal entering Benin, Senegal, Zambia
• Coordinating with other global funders (IFC,
  World Bank, DFID, GSMA, etc.)

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DF Stages of Development
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Theory of Change
Expansion to Consolidation
Start-up to Expansion
Inception to Start-up
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Translating Analysis into Work
Analysis Framework
Work Stream
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Customer at the Center
Where does policy and regulation most?
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Making the Shift to Electronic Payments
December 2014
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The Better Than Cash Alliance is a global
alliance of governments, the private sector, and
the development community committed to shifting
payments from cash to electronic.
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What Is the Problem?

• Cash Is Expensive Inefficient Unsecure
  Untraceable

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• We believe that electronic payments are a part of
  the solution

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Why Shift to Electronic Payments?
Financial Inclusion
New Market Access
Cost Savings
Transparency
Security

• Decrease costs of in-kind payments.

Increase accountability and tracking, reducing
corruption and theft.
Typically safer and have faster delivery.
Can accelerate access to and use of financial
services.
Open doors for new business models for previously
excluded people and create additional benefits.
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The Payments Shift Grid
Payer Payee Payee Payee
Government Private Sector / Business Individual / Person
Government G2G Budget allocation Funding programs G2B Grants, payment for goods and services G2P Salaries, pensions Social protection
Private Sector / Business B2G Taxes, fees, permits B2B Payment for goods and services in value chain B2P Salaries, Benefits
Development Organization D2G Taxes D2B Payment of goods and services D2P Salaries, benefits Cash transfers
Individual / Person P2G Taxes P2B Purchases P2P Remittances, gifts
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Challenges to Making the Shift

• Lack of political will due to resistance from
  vested interests and inadequate coordination
• Absence of a robust, reliable, and interoperable
  infrastructure due to perceived zero-sum game
• Regulatory barriers to innovation and e-payments
  due to cross-sector areas affected

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What the Better Than Cash Alliance Does

• Advocates for payers to commit to transition the
  distribution of government benefits, humanitarian
  aid, and payroll and supplier payments from cash
  to electronic
• Provides the policy, technical, and financial
  assistance needed to identify and implement the
  most effective approach for local market
  conditions
• Develops cutting-edge research products, good
  practices, and case studies in order to make the
  shift in country markets and achieve scale
  globally

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Committing Members

• Governments 9 committed, 12 in pipeline.
• Private sector One committed, many others in
  pipeline.
• Multi- and bi-lateral organizations 3 committed,
  4 in pipeline.
• Nongovernmental organizations 10 committed, plus
  others in the pipeline.

Peru
Philippines
Rwanda
AND MANY OTHERS!
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Technical Assistance Facility

• TAF projects Peer learning between governments
  (audit, tax, budget, etc.) regional African
  Finance Ministries meeting diagnostic and
  implementation grants.
• Ecosystem partnership development Drawing on
  neutrality of being based at UN and UNCDF remit
  to also work with private sector, focus on
  convening and connecting at the country level.

Delegates from the Philippines with hosts from
Kenya during a Peer Learning Exchange in August
2013
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Knowledge Generation

• White Paper, Diagnostics and Case Studies
• The Journey Toward Cash Lite
• Country Diagnostics (Philippines, Colombia,
  Nigeria, Malawi)
• G2P Digital Payment Case Studies (Kenya, Haiti,
  Uganda, Philippines)
• Government Shift Case Study (Mexico)
• Stakeholder Case Series (Colombia, Nigeria,
  Philippines)
• Technical Toolkits
• Ecosystem measurement
• Ecosystem diagnostics
• Stakeholder Toolkits
• Government
• Business
• Development Organizations

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Joining the Better Than Cash Alliance

• What do you get?
• Recognized for leadership.
• Invited to participate in events and learning
  opportunities.
• Given access to the latest evidence and case
  studies.
• Eligible for technical assistance and/or funding.

• How can you join?
• Learn more from BTCA team
• Identify opportunities (cash payments) to shift
• Make a commitment to shift cash payments to
  electronic
• Start or advance the shift

info_at_betterthancash.org www.BetterThanCash.org