How mobile money can transform access to healthcare

According to the most recent World Bank statistics, while almost all people in OECD countries have access to a bank account, in Brazil it’s 70%, and just 21% in Pakistan. Worldwide, some 1.7 billion people are “unbanked”.

There are several reasons for this: financial institutions aren’t always trusted in less stable regions, people in rural areas cannot reach bricks and mortar banks and not everyone has the formal ID necessary for opening an account. This inability to access financial services is known as financial exclusion, and it has a knock-on effect on health.

Mobile money is a method of transferring money via mobile phones, with credit linked to a SIM card rather than a formal bank account. It removes some of those key barriers to inclusion: it doesn’t require a visit to a physical bank, or internet access, and money can travel instantly over long distances.

Financial exclusion leads to inequality in health

Bank accounts allow people to save. Without savings, a health crisis can push people into poverty.

“At least half of the world’s population lacks access to full health care coverage, forcing them to pay out-of-pocket for care and pushing around 100 million people into extreme poverty each year,” explains Sophie Sirtaine, CEO of financial inclusion organisation CGAP.

Financial exclusion also affects health workers: without access to formal banking, workers in remote areas cannot receive salaries in a timely fashion. And transferring cash across long distances to pay these workers is risky. This makes it hard to employ people in rural areas, which in turn makes it harder for rural populations to access the care they need.

Without adequate, swift action from healthcare workers, stopping the spread of disease becomes much harder. During the Ebola outbreak in Liberia, rural health workers went on strike when they experienced long payment delays. But there was a solution: mobile money.

Mobile money can solve multiple challenges

Mobile money is a method of transferring money via mobile phones, with credit linked to a SIM card rather than a formal bank account. It removes some of those key barriers to inclusion: it doesn’t require a visit to a physical bank, or internet access, and money can travel instantly over long distances. It’s a become a popular tool: mobile money is now used by 1.2 billion people around the world.

“With mobile phone usage becoming the norm across Africa and Asia, there is a considerable opportunity to leverage this infrastructure to ensure that caregivers and healthworkers receive the funds they need to access and provide immunisation services,” says Moz Siddiqui, Head of Strategic Innovation and Partnerships at Gavi.

Around 29% of mobile money transactions are person to person, since these platforms are commonly used to send money to relatives. But users can also receive salaries, and in some countries government credits. Users can transfer credit into cash with a network agent who earns commission for acting a bit like a human ATM.

As Sirtaine explains: “Digital financial services like mobile money can reduce vulnerability to health shocks by facilitating access to remittances from family and friends, to savings, and to government transfers that can help to pay for preventive care and emergency health expenses.”

In Uganda, for example, research has shown that women who were given access to mobile money services were able to receive government credits, which allowed them to access prenatal care more readily that those without that access. Many ministries of health in Africa already collaborate with the private sector to use mobile money to pay health workers.

For rural health workers, mobile money provides a way to deliver timely payment, regardless of location. In the case of Liberia’s striking Ebola workers, USAID supported the Liberian government to set up mobile money payments and fund a wide network of agents, ending the strikes.

And the Bill and Melinda Gates Foundation has worked with partners to roll out mobile money payments for health workers delivering polio vaccinations in Côte d’Ivoire – ensuring 250,000 workers were paid in as little as two days.

It’s not a perfect system

Risks still exist with mobile money. Transferring mobile money into cash to purchase everyday items requires a network of agents across the country. But in a "chicken-and-egg" situation, agents – who earn commission – won’t go to locations where mobile money is less popular, but mobile money can’t become more popular until there are enough agents.

And while mobile money is in many ways safer than cash – every transaction is tracked and traceable – its link to a SIM card means that losing a phone can be disastrous. The strength of mobile money platform regulation also varies region to region, though this remains true of traditional banks, too.

To counter some of these risks, some platforms are offering the possibility to link phone wallets to traditional bank accounts, combining the old and the new. The GSMA, a mobile money industry group, have produced the Mobile Money Regulatory Index, which tracks regulation across different countries against criteria like agent networks, transaction limits and consumer protection. Ghana, Kenya, Nigeria and Rwanda are high on the list, with measures like ‘Know-Your-Customer’ rules in place and deposit insurance.

Mobile money is providing previously excluded groups access to health services. In the shadow of COVID-19, as the world’s poorer countries suffer the twin challenges of vaccinating their populations and tackling increased poverty, such innovations could be key.

There are bumps to iron out, but as mobile money coverage expands, we can hope to see its positive impact on health.