Remarks by Administrator Rajiv Shah at the Ford Foundation

Monday, September 24, 2012
Subject 
Better Than Cash Alliance

Remarks as prepared

Let me begin by saying how pleased I am to join you today. The commitments you’ve heard about this afternoon represent a powerful new approach in development that brings public and private partners together to dramatically transform the way we work every day.

Increasingly, it is an approach that will define the future of development—and determine our ability to deliver results that improve the lives of millions.

Over the last few months, I’ve had the opportunity to travel around the country and hold business roundtables with entrepreneurs and CEOs from a diverse range of American companies.

In every city—from Miami to Clemson, South Carolina—I’ve heard real recognition and eagerness to work together to deepen investment and unlock opportunity throughout the developing world. And perhaps nowhere is there greater potential to affect more lives than our work in electronic payments and mobile money.

We know that more than 90 percent of the adult population in the developing world is unbanked. And more than 2 billion of these unbanked individuals are already using mobile phones in deeply innovative ways.

In fact, I’ve seen the real potential for this work myself not far outside of Nairobi, where I met a dairy farmer named Gitau who didn’t have access to the electric grid or running water. But by using a mobile phone app called iCOW, he could invest in his business, vaccinate his animals, improve their feedstock, and track milk output and local prices.

“Information is power,” he told me.

There’s an exciting opportunity here for those of us working in this field. An opportunity to usher in a new era of development by forming public-private partnerships that change the way we do business—while expanding opportunity to millions.

That’s why we came together to build a network called the Better Than Cash Alliance—to accelerate the adoption of electronic payments around the world and to bring electronic payments and mobile money into our USAID programming with an eye towards greater gender equality and financial inclusion.

Technology isn’t everything, and it can’t solve all of our problems. But tools like the mobile phone or the debit card—and new partnerships like Better Than Cash—represent very real opportunities to generate results on a dramatic scale.

Delivering Results through Mobile Money and E-Payments

As a signal of our commitment, we are placing a huge new emphasis on building new partnerships that can deliver results through electronic payments and mobile money.

In the Philippines, we’re working with a range of public and private partners to transition 100 companies to e-payroll. And I’ve personally offered President Aquino our support for their new commitment to electronic payments in government.

In Malawi, we are supporting the efforts of the government to shift 300,000 civil servant salaries from cash to mobile money—as well as transition over the nation’s largest agricultural voucher program from paper to mobile delivery. 

And in Afghanistan, we are delighted by the very recent news that they have made their own commitment to Better than Cash. We will continue to work closely with them to ensure more than 300,000 Afghans can pay their electricity bills from their phonesultimately helping to drive more revenue to the utility company and expand electricity to 80 percent of Afghans that don’t have access today.

Underpinning these efforts, we have also recently forged two new partnerships with Citi and Vodafone and Technoserve to reach a scale in mobile money previously unimaginable. This partnership will build on our work across the world, but especially in Haiti—where we helped launch a mobile money revolution, expanding access to more than 800,000 people.

Collective Action for Transformational Change  

But to really deliver on these partnerships, we have to ensure that our own financial footprint is more assertively moving toward electronic payments.

That’s why we have introduced new language in our grants and contracts to ensure USAID programs are moving out of cash. And that’s why we are putting in more than $30 million in programs to assist our partners and governments in their migration.

Despite our progress, a great deal of work remains.

We’ve seen that even in Kenya, where 80 percent of adults use M-PESA in their daily lives, over 98 percent of transactions are still conducted in cash. And across our own community, development organizations still rely heavily on cash for many of our transactions—from cash-for-work programs to emergency relief payments.

If we’re serious about realizing the full benefits of technology, we have to make a real commitment to change the way we do business.

We know it won’t be easy.

It took the credit card industry fifty years to gain traction in the United States.

But this slow rate of adoption teaches us that collective action is necessary to drive transformational change.

Ultimately, many of us are here today because we already know the value of electronic payments. We know they can create cost efficiencies, accelerate financial inclusion, improve transparency and unlock new markets.

In Brazil, we’ve seen administrative costs drop from 14 percent to under 3 percent when the country switched to electronic benefit cards. And in Mexico, the government saved 20 percent after doing the same.

But Better Than Cash is about more than cost-savings. It is about having a meaningful impact. Electronic payments can become the onramp towards critical financial services for 2.5 billion adults who currently do not have them. They empower voices, energize economies, and bring added security to society’s most basic transactions.

Most importantly, they build the capacity of individuals to lift themselves—and future generations—out of poverty.

At the end of the day, however, we know a commitment is just words on a piece of paper. We know that to deliver results, these commitments must be backed by actions and the hard work of making changes to contract language and internal processes.

Today, we have a chance to honor our progress. But tomorrow the real work begins.

I’m pleased to welcome so many new partners, and we look forward to growing the Alliance together. Our vision will no doubt take time to realize. And there will be false starts, but I believe that we can—and will—do better than cash.

Thank you.

Ford Foundation, New York, NY

Last updated: December 16, 2014

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