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In our main program, GiveDirectly gives those who don’t already have a mobile phone the option to buy one, subtracting the ~$15 cost from their first transfer, an offer taken by 90% of recipients. Your donations then go directly to the SIM card in their phone, a technology called mobile money. 

The primary benefits of direct cash – improved earnings, health, education, etc. – may obscure a secondary benefit of our work: connecting people to a mobile network. Below we lay out what the evidence shows impact and how we specifically extend impact.

Access to mobile money and phones has distinct benefits

large analysis found mobile money access alone (without cash grants or other aid) has lifted 194K or 2% of Kenyan households out of extreme poverty by increased savings, resilience, and access to better business opportunities. Other research finds mobile money usage can help African families be more resilient to economic shocksaccess healthcare more often, and have more social closeness and lending reciprocity than similar households without mobile money.

Even without access to mobile money, simply owning a phone improves resilience and earnings by reducing travel costs and increasing social connection. Phone ownership also allows for innovative responses to shocks and disasters. During COVID-19 lockdowns, the government of Togo targeted and sent cash aid fully remotely, taking advantage of the fact that some 90% of their citizens already owned a phone. Health officials in low income countries have harnessed phone data to track disease outbreaks.

GiveDirectly overcomes structural obstacles to bring mobile access

We issue mobile phones and free SIM cards to households that need one. Our staff walk recipients through how to use this new technology, guiding them to set their unique PIN and check their balance. We also sensitize them to fraud risks and inform them what fees they should expect when they visit an agent to cash out. A government ID is required to register for mobile money, so in some cases we coordinate with local governments to hold ID-issuing campaigns ahead of our enrollment. 

But even with phones, many villages will still struggle to access the benefits of mobile devices due to other structural hurdles. Here are some solutions we implemented to help:

We bring cell network where it never reached before. 16% of Africans do not live within reach of a mobile network, with the biggest gaps in the poorest regions due to a lack of demand – telcos only build towers where they believe they’ll have customers. However, when GiveDirectly starts a project, we’re creating thousands of new subscribers. Our project reaching 15K families in Kiryandongo, Uganda motivated two telcos (MTN & Airtel) to extend coverage and mobile money agents to the area. In Maryland, Liberia, where we’ve enrolled 11.5K households in our basic income program, we co-financed 10 new cell towers with local telco MTN, bringing cell coverage for the first time to over 2,400 adults across 21 villages (see video below). 

We get cash to remote communities. Over 75% of recipients choose to cash out rather than keeping their transfers in their mobile money account, as many rural merchants only accept cash. In some rural areas, banks and agents do not have enough cash on hand for hundreds of families to withdraw large amounts in a matter of days. GiveDirectly collaborates with national banks and mobile money operators to ensure sufficient liquidity in the regions where payments are about to go out. In some of the most remote areas, we arrange for mobile money agents to travel to village centers to cash out recipients.

The final challenge of charging phones without an electric grid is solved by recipients themselves. When dozens of their neighbors get phones at once, an enterprising person often invests in a solar panel and battery to offer a charging station at ~$0.20 per charge which can last up to a week.

More can be done to reduce barriers to connectivity

While cash transfer NGOs extend access to hundreds of thousands that lack phones or mobile money access, there are structural issues larger than our programs can overcome. 

  • Mobile network coverage and usage is limited in the poorest areas. Coverage rates are particularly bad in Central Africa, where over a third of adults are not reached by network – worrying given this region is home to 215M people in extreme poverty. Cash transfer NGOs alone will not incentivize enough network expansion to address this, but focused private and philanthropic infrastructure investment could, as Open Philanthropy argues.
  • Vulnerable populations may be ineligible for mobile money. Some countries do not allow refugees the requisite ID card needed to register for SIM cards and mobile money. In Kenya, home to over half a million refugees, we had to instead open formal bank accounts for urban refugees due to mobile money restrictions, an approach that would not work in rural settings.
  • Giving smartphones might increase impact, but isn’t cost-effective. Some research suggests that giving people smartphones could help them more than giving them simple phones. However, the cost is significantly higher ($93 vs. $14), which could mean the gains are outweighed by the expense. Furthermore, in a GiveDirectly pilot giving smartphones to over 1,000 Kenyan youths in an informal settlement, half of the phones had been lost, stolen, or damaged two years later. And even for those who retained them, continued usage was difficult as 1GB of data costs 8% of the average monthly income in sub-Saharan Africa, the highest rate in the world.
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Sorted by Click to highlight new comments since: Today at 12:22 PM

Nice article and the analysis - mostly really matches up with my experience, especially that mobile money usage can increase healthcare access as we've seen that in our facilities with mobile money available close by.

 Our small OneDay Health survey in remote places showed that out of 170 households surveyed, only one didn't have at lest 1 active cellphone within the famliy unit. Obviously many (maybe even the majority) of members within that family wouldn't have a cellphone, but I would imagine this comment..

 "GiveDirectly gives those who don’t already have a mobile phone the option to buy one, subtracting the ~$15 cost from their first transfer, an offer taken by 90% of recipients"

...doesn't necessarily mean that 90% of recipients don't have cellphones (many of them would have had one already), but more that they were willing to spend that $15 they hadn't received yet on a cellphone? Not sure about this though. Or does that 90% figure only include those who don't have a cellphone already?

We also gave 15 nurses smartphones once as a trial, and over half of them were broken or lost within a year - to be honest I'm impressed that half of them were still there after 2 years time! I also wanted to read that article but your link didn't work it would be great if you could fix that!

Thanks, very interesting insights re: healthcare access (you'd enjoy this pod with our research director who is a former medical doctor). The ~$15 is at market value for a phone, so the incentive isn't especially appealing. That said, sometimes other members of a household will have a phone but the assigned recipient does not so elects to buy one.

Here's the link in question: https://www.fsdafrica.org/wp-content/uploads/2021/11/YEG-Brochure-29.10.21.pdf 

This is super interesting! Somehow I wasn’t aware that GiveDirectly helped people get mobile phones too!

Fwiw, the 50% loss rate isn't that different from the Roessler paper, which still found effects in spite of the losses/sales/breakage (see pg. 9).

"As expected, by endline self-reported phone ownership in the treatment conditions far outpaced control (72% in the pooled phone conditions to 27%) but also revealing the attenuating effects of handset turnover. Pinning down the exact mechanisms that account for handset loss among those in the phone groups is challenging because of survey demand effects.11 We could, however, verify whether participants had the program handset on their person during the endline survey: while 50.7% of those in the basic group still had the basic handset, only 34.2% in the smartphone group did. Below we refer to subjects displaying the project phone at endline as compliers."