MICROCAPITAL BRIEF: United Nations, Smart Communications, Land Bank of Philippines Use Mobile Money in Recovery from Typhoon Haiyan (Yolanda)

The United Nations Development Program (UNDP), in partnership with Smart Communications Incorporated (Smart), a Philippines-based telecommunications company, and the Land Bank of the Philippines (LBP), a government bank specializing in serving farmers and fishermen, reportedly have commenced using mobile money to facilitate wage payments under UNDP’s “cash-for-work ” program that was launched for the 12 month period beginning in November 2013 in areas of the Philippines struck by typhoon Haiyan (Yolanda). Recovery workers receive text message (short message service) notifications from Smart when their pay is credited to their Land Bank payment cards. The work includes clearing debris, disposing medical waste and re-establishing drainage systems. Similarly, the World Food Programme (WFP), the United Nations agency tasked with providing food aid in response to the storm, engaged Smart to disburse funds through electronic vouchers to approximately 200,000 people as part of its “cash-for-food” program.

UNDP had a budget of approximately USD 857 million for the 2013 fiscal year. WFP assisted 97 million people across 80 countries in 2012. As of year-end 2012, LBP had PHP 691 billion (USD 15.4 billion) in total assets, a total gross loan portfolio of PHP 331 billion (USD 7.38 billion) and deposits worth PHP 273 billion (USD 6.09 billion). Smart reported 52.6 million subscribers as of 2012.

By Chikondano Faith Chisala, Research Associate

About The United Nations Development Program (UNDP):
The mission of the United Nations Development Program (UNDP) is to provide developing countries with knowledge, experience and resources in line with the United Nations’ Millennium Development Goals (MDGs), a set of eight goals intended to be achieved by 2015. UNDP operates in partnership with national governments in 177 countries and territories as of 2013. UNDP estimates an institutional budget of USD 857 million for the 2013 fiscal year.

About Smart Communications Incorporated:
Smart Communications Incorporated (Smart) is a wireless service provider in the Philippines that was founded in 1991. Smart provides postpaid and prepaid plans; broadband Internet services; and Smart Money, a mobile phone service that is linked to a debit card to allow for users to pay bills, purchase goods, and transfer funds. Smart is a subsidiary of the publicly traded Philippine Long Distance Telephone Company (PLDT). As of December 31, 2013, PLDT reports total assets of PHP 399 billion (USD 9.8 billion). PLDT provides service to 68.6 million subscribers including 52.6 million Smart customers, as of 2012.

About the Land Bank of the Philippines:
The Land Bank of the Philippines is a government bank specializing in serving farmers and fishermen. As of December 2012, Land Bank reportedly had PHP 691 billion (USD 15.4 billion) in total assets, a total gross loan portfolio of PHP 331 billion (USD 7.38 billion) and deposits worth PHP 273 billion (USD 6.09 billion).

About The World Food Program:
World Food Program is a United Nations agency tasked with providing food aid. The organization is guided by five objectives: (1)prepare for emergencies, (2) save lives and protect livelihoods during emergencies, (3) restore and rebuild lives after emergencies, (4) strengthen the capacity of countries to reduce chronic hunger and (5) reduce under-nutrition. World Food Program assisted 97 million people across 80 countries in 2012.

Sources and Additional Resources

[1] Sun Star, “Mobile money platform backs ‘Yolanda’ recovery efforts,” http://www.sunstar.com.ph/davao/business/2014/03/22/mobile-money-platform-backs-yolanda-recovery-efforts-334464

[2] United Nations Development Program, Press Release, “UNDP launches cash-for-work programme for destroyed communities in the Philippines,” http://www.undp.org/content/undp/en/home/presscenter/pressrealeses/2013/11/25/undp-launches-cash-for-work-programme-for-destroyed-communities-in-the-phillippines.html

[3] United Nations Development Program, Press Release, “Japan and UNDP intensify support to Yolanda recovery efforts,” http://www.undp.org/content/undp/en/home/presscenter/pressrealeses/2014/03/27/japan-and-undp-intensify-support-to-yolanda-recovery-efforts-/

[4] World Food Programme, Our Work, “Cash and Vouchers,” http://www.wfp.org/cash-and-vouchers

MicroCapital, July 27, 2013, “Government of Cameroon Partners with United Nations Development Program (UNDP), International Fund for Agricultural Development (IFAD), United Nations Capital Development Fund (UNCDF) to Consolidate Microfinance Sector,” https://www.microcapital.org/microcapital-brief-government-of-cameroon-partners-with-united-nations-development-program-undp-international-fund-for-agricultural-development-ifad-united-nations-capital-development-fund-unc/

MicroCapital, May 18, 2013, “Land Bank of Philippines Announces Bayadload E-Payment Service for Mandatory Government Contributions,” https://www.microcapital.org/microcapital-brief-land-bank-of-philippines-announces-bayadload-e-payment-service-for-mandatory-government-contributions/

MicroCapital, December 5, 2012, “Smart Communications to Launch Mobile Microfinance Service Provider mBank Philippines,” https://www.microcapital.org/microcapital-brief-smart-communications-to-launch-mobile-microfinance-service-provider-mbank-philippines/

MicroCapital, May 19, 2011, “Oxfam America, World Food Program (WFP) Offer Crop Microinsuarance for Ethiopian Farmers in Return for Labor,” https://www.microcapital.org/microcapital-brief-oxfam-america-world-food-program-wfp-offer-crop-microinsurance-for-ethiopian-farmers-in-return-for-labor/

MicroCapital Universe Profile: United Nations Development Program, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=United+Nations+Development+Program+%28UNDP%29

MicroCapital Universe Profile: World Food Program, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=World+Food+Program+%28WFP%29

MicroCapital Universe Profile:Smart Communications Incorporated, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Smart+Communications%2C+Inc.+%28SMART%29

MicroCapital Universe Profile: Land Bank of the Philippines, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Land+Bank+of+the+Philippines

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Chikondano Faith joined MicroCapital after holding various rolse at a commercial bank, where she improved and diversified her skill set by exploring many banking functions including: trading, treasury management, credit analysis and business development. She developed an interest challenges faced by entrepreneurs in emerging economies after taking up a small business development and entrepreneurship course during her undergraduate studies at the University of Pretoria in Pretoria, South Africa. She holds also Masters degree in Strategic Management from the University of Derby, her independent study topic focused on strategies to support Small and Medium Enterprises (SMEs) in Malawi. In working with MicroCapital, she hopes to expand her knowledge of microfinance and to use this internship as a foundation to pursue a career in micro and developmental finance. Chikondano Faith enjoys travel, drawing, jazz music, and improving her French during her spare time.