By Erin Powell
An estimated 220,00 people died and an additional 3.5 million were affected by the magnitude 7.0 earthquake that struck near Port-au-Prince, Haiti, on Jan. 12, 2010. Almost three years later, even though the devastation is still seen across the country, a new technology is lifting restoration efforts to the forefront of progress: The use of cell phones for aid and as mobile money.
Even before the earthquake, Haiti was one of the world’s poorest nations, with more than 70 percent of Haitians living on less than 2 U.S. dollars per day. According to the Disasters Emergency Committee, half of the people in Port-au-Prince had no access to latrines and only one-third had access to fresh tap water. Why then would a country so desperate to escape the poverty trap invest in something as materialistic as cell phones?
Rather than for traditional entertainment and telecommunication use, cell phones in Haiti are serving as debit cards, giving citizens the opportunity to receive aid provisions through SMS messages, sending money through wire transfers, buying groceries, and participating in mobile banking. If a customer wants to make a purchase at a local store, all he or she has to do is enter a code (linked to a bank account) into the phone, and the transfer is complete. Aid organizations, such as U.S.-based Mercy Corps, can even distribute virtual food rations en masse to those who need economic assistance.
Besides the opportunity for Haitians to receive aid and manage their finances, the use of cell phones cuts down on diseases such as cholera that can be passed through paper money. In addition, the buying and selling of cell phones for this purpose has stimulated parts of the country’s economy and has given merchants more products to sell. Corruption is also less likely, since the SMS messaging system increases the difficulty for crime and exploitation as everything is linked electronically and a record is retained. Haitians who use the phone system no longer have to worry about the cost or time of travel to and from bank branches and cash machines, which can be scarce. They can bank from any location.
This past July the two main mobile network operators in Haiti, Digicel Group Ltd. and Voilà, received a $3.2 million award from the Haiti Mobile Money Initiative, a partnership between the Bill & Melinda Gates Foundation and USAID, for surpassing the milestones of five million transactions. In August, Digicel and the Haitian government joined forces and transferred money to more than 5,000 victims of Tropical Storm Isaac, allowing them to withdraw funds electronically via SMS to use in a variety of locations.
Although the mobile money initiative is strong, it has not yet reached its full potential. Two-thirds of Haitians have access to mobile phones, however only 10 percent have bank accounts. Much of the population remains skeptical about using the phones for banking since the concept is new and strange amidst the constant political instability of the country. Some Haitians have never been exposed to cell phone technology, and they need education and training to understand how to use it and to teach others in their communities.
Before the cell phone initiative can truly flourish, changes in the financial sector need to be put in place, such as an increase in the number of banks and services, a rise in the availability of technological resources and a more stable infrastructure for supporting cell phone use. Until then, Haitians can continue to spread the word about all that is possible through cell phones. Which countries in the developing world will we next see emerge with a similar enterprise? Many nations can learn from this initiative. Developing nations can advance technology, and this can both change the global market and improve efforts as to how aid is administered.
(Photos courtesy of the Gates Foundation via Flickr, through a Creative Commons License)