March 2

Luke Kyohere / Julienne Lauler

Five Reasons NGOs and Social Enterprises are Going Cashless

With over 250 services deployed in 89 countries worldwide, mobile money has enjoyed explosive growth among consumers in emerging markets. But while much has been said about the potential of mobile money to enhance financial access for the unbanked, digital payments are also transforming the work of many organizations working in emerging countries. Development-focused organizations, specifically, are increasingly investing in shifting their bulk payment systems from cash to digital payments, which has been proven to have far-reaching organizational and financial benefits.

Development organizations from NGOs to social enterprises channel an estimated 10 to 30 percent of their funding through cash disbursements annually, comprising between $1.9 billion and $3.7 billion. Bulk payments are primarily used for travel and expenses, paying staff salaries and suppliers.

Mobile money bulk payment solutions can effectively address the inefficiencies inherent to cash, prompting a continued drive to implement digital payments among organizations and businesses in developing countries. Below we illustrate five key benefits of this approach, and explore the experiences of some organizations that have switched to cashless payments.


Cost savings: Cash is not free

While cash itself is free, the associated transportation costs and staff time required to disburse cash payments can be very costly for organizations and businesses operating in emerging markets. Though there are some costs associated with the use of mobile payments, shifting to mobile can bring dramatic cost savings: Systems such as Kenya’s leading mobile money provider M-PESA have been proven to be one-third to one-half as expensive as alternative payment systems.

A cost analysis of cash versus mobile money by fishery and aquaculture research center WorldFish in Bangladesh, showed that shifting to mobile payments brought the organization nearly $20,000 in annual cost savings. Mobile dramatically reduced the staff time required to disburse money to farmers participating in its programs, while eliminating the transaction and transportation costs that had previously been involved in the process.

Similarly, Educate!*, a nonprofit that teaches African youth to be leaders and entrepreneurs, experienced a 33 percent reduction in direct payments costs after shifting from cash to mobile bulk payments. Reducing the costs of cash can free up capital for more productive purposes, such as investment in organizational growth and expansion of services.


Organizational Efficiency

Cash payments are not only costly, they can also be slow, while breeding operational bottlenecks. Disbursing bulk payments via mobile can enable organizations to enhance the delivery speed of payments and reduce wait times for field staff and beneficiaries to receive money.

This was the case for English in Action, an educational NGO in Bangladesh, which began disbursing bulk payments through mobile money in 2013. By paying educational officers and teachers with bKash mobile money, EIA was able to increase the number of trainings it conducted from 10 to 30 within the same period and with the same staff, boosting staff efficiency and enabling their program to scale.

Educate! experienced similar gains, with mobile money bringing a 20 percent reduction in travel time and time spent processing payments. Rather than having to physically come into the office to submit cash requisition forms and receive two weeks’ worth of cash, recruiters could submit forms via email, and Educate! could send payments directly to their mobile money accounts. As a result, recruiters were able to stay in the field longer and devote more time and energy to their projects, rather than managing cash payments and paperwork.





Transparency and reduced leakages

Cash payments are highly vulnerable to misuse and corruption, as they tend to pass through many hands and lack a transparent tracking process. A desire for greater transparency thus drives many organizations and businesses to shift to digital payments.

With mobile money, financial flows can be more accurately monitored via an open and transparent digital platform. This results in safer and speedier transactions and reduced opportunities for corruption and theft.

The experiences of bulk mobile money provider Beyonic (where the authors work) in Uganda have shown that many organizations are surprised to see how much more efficient and transparent their operations become after transitioning to mobile payments.



In many countries, carrying large volumes of cash across long distances can leave staff members or other payees vulnerable to theft or other safety concerns. Mobile money directly addresses this issue, by reducing the need for individuals to handle or transport cash. Early studies of M-PESA in low-income areas found that using mobile money reduced the risk of muggings, because the presence of cash was less obvious.

Ugandan social enterprise BeadForLife* made the shift to mobile nearly three years ago, and reported that it has enhanced the safety of members. Previously, some members would leave the organization’s office with cash and get followed on their way home. Using mobile money has reduced the risk of this happening. Ugandan agribusiness Agrinet* has observed similar benefits in its work providing market linkage solutions and services for the agriculture value chain.


Financial Inclusion

While it is often not their primary motivation, the long-term goal of enhancing financial inclusion does in fact encourage many organizations and businesses to shift to mobile money. Paying (often unbanked) beneficiaries and staff members using mobile money has the potential to connect poor individuals to the formal financial sector, fostering local economic growth and employment.

In some cases, organizations or businesses require payment recipients to create a mobile money account in order to receive salaries or bonuses. Armed with this account, they can then access an increasing array of other financial services, from mobile-based savings to insurance products. Mobile money usage data can also create a financial track record, unlocking access to previously inaccessible credit. Bulk payments via mobile money thus serve as a stepping stone toward broader financial inclusion.



*Agrinet, BeadForLife and Educate! are Beyonic customers.

Photo credit: Laura, via Flickr.


Luke Kyohere


Julienne Lauler


digital payments, financial inclusion, mobile finance