Mobile Financial Services (MFS) have provided marginal populations with access to basic financial services, including savings programs and insurance policies. Disaster relief response has been characterized by the use of MFS as a vehicle for charitable donations, both directly from diaspora populations as well as campaigns organized by traditional relief organizations. The paper will develop a financial model and analysis of how scaling MFS can be commercially viable and sustainable. The analysis will assess the extent to which the deployment of MFS as a disaster risk mitigation measure may be enhanced by the provision of information on available risk profiles. The paper will assess the enabling environment for successful deployment of MFS as a mechanism for managing financial shocks in disaster relief and for mitigating individual risk. Statistical models have been developed using mobile network operator (MNO) call detail records (CDRs) to assess which subscribers may present better credit risks as well as how to best structure premium levels and payment methods to best fit subscribers’ abilities and needs. Based on such models and on the pricing structures of MFS, the paper will extrapolate from instances where farmers have secured insurance against weather-related crop failures and where MFS have been developed. MFS adoption in developing countries follows a model in which remittances lead to the adoption of other MFS. The overview indicates that the existence of established reciprocity and social networks drives volume and that establishment of trusted networks is critical to MFS achieving scale. In conclusion, the analysis will examine how patterns of use of MFS provide an informational basis on which disaster risk reduction can be implemented in different form factors.
- Normalize Difference Vegetation Index
- Credit Risk
- Disaster Risk
- Disaster Relief
- Mobile Network Operator
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
This is a preview of subscription content, access via your institution.
Tax calculation will be finalised at checkout
Purchases are for personal use onlyLearn about institutional subscriptions
Aker, J. C., & Mbiti, I. (2010). Mobile phones and economic development in Africa. Journal of Economic Perspectives, 24(3), 207–232.
Beko, A., & Lytle, P. F. (2014). Poverty and social impact assessment of Burundi coffee production. World Bank Working Paper.
Cole, S., Bastian, G., Vyas, S., Wendel, C., & Stein, D. (2012). The effectiveness of index-based micro-insurance in helping smallholders manage weather-related risks. London: EPPI-Centre, Social Science Research Unit, Institute of Education, University of London.
Consultative Group to Aid the Poorest (CGAP). (2013). International remittances through branchless banking. http://www.cgap.org/news/international-remittances-and-branchless-banking-2013-landscape. Accessed 20 Jan 2014.
Cox, C., Hug, A., & Bruzelius, N. (2011). Losing ground. University of Iowa Environmental Working Group. http://static.ewg.org/reports/2010/losingground/pdf/losingground_report.pdf. Accessed 20 Jan 2014.
Crawford, J. (2014). Satellite imagery analysis for agricultural insurance. Telephone Interview. 6 February 2014.
Dafuleya, G. (2012). Enterprising in the face of death: Social entrepreneurship in African burial societies. Journal of Enterprising Culture, 20(3). doi:10.1142/S021849581250015X
Di Castri, S. (2013). Mobile money: Enabling regulatory solutions. London: GSMA, Mobile Money for the Unbanked (MMU).
Duncombe, R. (2012). Understanding mobile phone impact on livelihoods in developing countries: A new research framework. Working Paper Series, Paper No. 48. London: Centre for Development Informatics, University of Manchester.
Food and Agriculture Organization of the United Nations (FAO). (2013). Our food and agriculture in numbers. http://www.fao.org/resources/infographics/infographics-details/en/c/203558/. Accessed 20 Jan 2014.
Grantham J., & Mayo van Otterloo, G. (2011). LLC (investment firm). Quarterly Investment Newsletter.
GSMA. (2013). Mobile for development intelligence database. https://mobiledevelopmentintelligence.com/products/map/countries/mobile-money/organisations/organisation-types/mobile-microinsurance. Accessed 22 Jan 2014.
GSMA. (2014). MMU 2013 State of the industry report (p. 56). London: GSMA, Mobile Money for the Unbanked (MMU).
Jack, W., & Suri, T. (2014). Risk sharing and transaction costs: Evidence from Kenya’s mobile money revolution. American Economic Review, 104(1), 183–223.
Kumar, K., & Mohota, K. (2012). Can digital footprints lead to greater financial inclusion? (p. 2). CGAP Brief.
Monsanto. (2013). Monsanto to acquire the climate corporation, combination to provide farmers with broad suite of tools offering greater on-farm insights. http://news.monsanto.com/press-release/corporate/monsanto-acquire-climate-corporation-combination-provide-farmers-broad-suite. Accessed 21 Jan 2014.
Smith, A. (2013). Trust and agent networks in mobile money deployments. Personal interview.
Stuart, G., & Cohen, M. (2011). Cash-in, cash-out Kenya: The role of m-pesa in the lives of low income people. Financial Services Assessment. College Park: IRIS Center at University of Maryland and Microfinance Opportunities.
Tellez, C., & Zetterli, P. (2014). The emerging global landscape of mobile microinsurance. CGAP Brief.
Uthayakumar, N., & Goslinga, R. (2012). Kilimo Salama (safe farming) weather index insurance in Kenya: Early market success. International Finance Corporation. http://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/industries/financial+markets/retail+finance/insurance/kilimo+salama. Accessed 22 Jan 2014.
West, D., & Valentini, E. (2013). How mobile devices are transforming disaster relief and public safety. Center for Technology Innovation at the Brookings Institution.
World Bank. (2011). The migration and remittances factbook 2011 database. http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:22759429~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html. Accessed 22 Jan 2014.
The author would like to thank Paula Lytle and Tim Kelly at the World Bank for feedback on an earlier presentation which provided impetus to this paper. Additional feedback from Charles Martin-Shields and Anne Nelson is gratefully appreciated. The author would also like to thank Maj Fiil-Flynn for her perspective on mobile money and Madeline Kleiner for her research support.
Editors and Affiliations
© 2015 Springer International Publishing Switzerland
About this paper
Cite this paper
Garrity, D.M. (2015). Mobile Financial Services in Disaster Relief: Modeling Sustainability. In: Hostettler, S., Hazboun, E., Bolay, JC. (eds) Technologies for Development. Springer, Cham. https://doi.org/10.1007/978-3-319-16247-8_5
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-16246-1
Online ISBN: 978-3-319-16247-8