SINPF AND MOBILE NETWORK OPERATERS (MNO’s) TO PILOT AIR TIME SERVICE FOR youSave CUSTOMERS SOON
An innovative digital financial service pilot project for enhancing access to finance and enabling financial inclusion for the informal sector in the Solomon Islands is in its final stages of implementation by the Solomon Islands National Provident Fund (SINPF). This is to enable the use of mobile Airtime (Top Up) to make deposit payments directly into the youSave accounts of customers. Currently “youSave” is a very popular retirement savings product for the informal sector of Solomon Islands that was launched in 2017 by SINPF and is supported by the Australian High Commission’s Department Foreign Affairs & Trade (DFAT) and the United National Capital Development Fund (UNCDF).
Team Leader of youSave, Wilson Hano provided an update on the innovation that is about to be launched. He informed that the UNCDF, through its Pacific Financial Inclusion Program (PFIP) has provided technical assistance to SINPF, to engage the services of an international expert to oversee the possibility of using airtime (Top Up) for making deposit payments into the youSave customer account. The scoping study of this possibility was done at the end of 2018 and it was found to be viable through some technology upgrades and customizations with the Mobile Network Operators (MNO’s) and SINPF, and if some tax concessions can be considered for making the product viable and sustainable, as there is a GST on sales of airtime, which if refunded by the Inland Revenue Department (IRD) will provide a win-win-win case and make the product viable for all the stakeholders, especially the informal sector and low income groups of the Solomon Islands.
He further informed that the pilot project is being led and coordinated by the Central Bank of Solomon Islands (CBSI) and the overall implementation of the airtime project that will be piloted by the 2 MNO’s (Telekom and Bmobile) together with SINPF. Currently, the technical expert is in the country working with all relevant stake holders focusing on finalizing the software and process flow designs and technical preparation before the actual launch of the pilot project.
Hano was of the view that over the last forty years, NPF services to the people was incomplete because it was only focusing on serving the working class or the formal sector. However, with the introduction of youSave in 2017, makes NPF more complete, because all Solomon islanders can save money for retirement or old age. He believes that this pilot project with the innovative approach to use conveniently available airtime to make direct deposit payments into the customer’s account will a game changer and bring digital financial services to all.
The main goal of the airtime project is to provide easy and secure access to youSave members to able to save for old age without having to come physically to SINPF head office in Honiara and other two provincial branches. More importantly, they can do this at any time and from anywhere in Solomon Islands, from the convenience of their homes. The key innovation here is the use of airtime payment for deposit/savings product. While airtime has been used to make payments for services such as power, or water or insurance, this is a first time anywhere in the world, where airtime will be used for savings. This is a unique approach and thus the reason for UNCDF / PFIP to provide support as it provides a tool for better saving practices through a digital channel as it is proven that digital financial services can make this a reality for low and middle-income people. This can help improve the livelihoods by providing safety nets in case of emergencies, preparing for unexpected expenses, and enabling financial independence.
“We hope that the piloting of the airtime project will be successful, as once implemented, it will help our members a lot and will be a major boost to increase savings of youSave members using the service doing their transactions” Hano said. He explained with the proposed airtime project youSave members can buy airtime from any Telekom or Bmobile topup agents and send the credits they buy as their savings to youSave using a designated USSD code 673 from their mobile phones. For those youSave members that use this service, they will receive a message notification on their phone once their account is updated, on a real time basis. Using the same code, members will also be able to find the current balance of their youSave account.
Currently total youSave membership had surpassed 11 thousand members, with about $8 million in net savings. Withdrawal is still small, around 10% and youSave is encouraging the informal sector to save more for their old age.
Meanwhile, the project’s technical expert assigned by UNCDF/PFIP to help in the implementation and assist the stakeholders is Sanjay B. Shah from PHB Development. He informed that the project is in the final preparation stages for the launch of the pilot project’s implementation. Sanjay is a senior consultant with expertise in the field of digital finance and has been working in the areas of digitization, digital finance, financial inclusion and access for more than 15 years in different regions of the world.
“I am here to advise, guide and prepare the stakeholders and to make sure that all the technical elements, the preparedness and the discussion on human resources, and all the processes work seamlessly and correctly – so as to ensure a successful project. With such kinds of multi-stakeholder projects, tasks and requirements and their implementation can become very complex – thus a major role that I play is to ensure smooth coordination among the partners and that all are at the same level of understanding. Another strong element that I assist the stakeholders with, is to ensure that the technology and processes, and how it will function, has to be done with the customer as the main focus, so that it is secure, practical and convenient for them. Thus, I am here to put all these elements into place, so that when the technologies are ready and all the processes come together, then youSave airtime project can go live”, Sanjay said,
“Currently the teams from all the stakeholders are working towards a target to launch the project in October 2019. Thus, September will be for initial testing of all aspects of the project, and if all goes well, the service to use airtime for deposit payments into youSave accounts can be launched in October 2019 and I hopeful that the target dates can be met.” Sanjay will be closely involved in the project through its entire project cycle and will be playing an advisory role and help the stakeholders, especially the youSave team to react rapidly to any changes that may be required as the transactions begin to scale.
Finally, Isaac Holly, the Country Technical Specialist of UNCDF, said that “This project is a significant step towards the digital economies in Solomon Islands and we are thankful to the Australian High Commission for their continued support to these projects.”