What if the informal sector had a payslip? In the same principle that a payslip shows you your earnings each month (minus those pesky taxes), the informal sector payslip shows a transaction history allowing the bustling informal sector employee to track how much they make in a month!

What if you were asked to imagine further that this Payslip (mobile transaction history) based on mobile money transactions allowed one to connect a mobile money account to a Bank account linked to a traditional financial institution. Would this facilitate access to savings and credit services for the informal sector? What possibilities could this create? It may just open opportunities for the traditionally unbankable who have too long been denied access to services such as loans, insurance products or social security. With a 70% mobile service penetration as reported in the scoping study done by the International Finance Corporation (IFC Mobile Money Scoping: Country Report Zambia n.d.) this may not actually be far from reality!

 According to the 2015 Living Conditions Monitoring Survey Report  average monthly income for a low income household was K2,180.50 (USD161) against a reported basic needs basket of K3,797.55  (USD281.3) for a family of five in Lusaka during the same year. Commonly referred to as scavengers, people that separate and collect waste from dumpsites make up the vulnerable population of the country. They go around picking waste that ranges from plastic to paper to sell to companies that process the waste into products for domestic, construction or other uses. In Lusaka, which is one of the fastest growing cities in southern Africa, with the current population density 4.85 persons per square kilometre (Lusaka City Council, About Lusaka, 2015), the bulk of the waste remains uncollected.

The lack of a proper waste management system has created challenges for the city among which has been the breakout of communicable diseases such as cholera and dysentery as well as pollution of water, air, soil and land resulting in proliferation of pests and vermin and the loss of aesthetic beauty. The issue of waste cuts across different goals within the Sustainable Development Goals (SDGs) contributing to the development of sustainable and clean energy; responsible consumption and production as well as the establishment of sustainable cities and communities

Sustainable waste management creates opportunities to grow alternative energy sources that are clean, affordable and reliable while at the same time helping to create clean cities; for instance, current technological advancements provide opportunities to recycle biowaste to produce biogas for power production. This is an alternative that promises to actualise green cities as it guarantees protection of the forest long ravaged for its trees for firewood. It will also provide organic fertilisers that can be used to replenish the soil. The use of biogas holds economic benefits as it is a cheaper source of power, which for most households will build resilience at two levels. At one level, waste has value and could be sold to a biogas producing company and at another level, the reduced costs on biogas frees money for other needs.

As the population becomes aware of the need to create a clean and healthy Zambia, locally sourced solutions to the waste burden are evolving into private-public initiatives. The initiatives are creating opportunities for waste collectors to get into the formal sector. Potentially these private-public partnerships are birthing profit-making organisations that promise to improve incomes for the waste collectors and ensure waste collection is done safely and hygienically.  

A recent solutions safari by the Accelerator Lab team revealed an innovative use of a mobile application to manage financial transactions between the people collecting waste (Collectors) and the buyers, known as aggregators. The initiative is still in pilot phase, but the lab team saw an exciting opportunity the mobile application would provide for the waste sellers 70% of whom are women, this could have positive effects as waste collectors access to credit support will increase going up the waste management value chain. This is strategic since the industry promises to boom with the increasing desire to create smart cities.

Further the potential such an innovation brings with its possibility to scale up to similar informal businesses. The economic benefits that would be garnered from the waste management value chain potentially has power to trigger the country’s economy as other business opportunities could leverage on the sector. For those that have informally been working on the sector, it creates an opportunity to improve their conditions as other players come in to invest in the value chain. An important player that has come on the scene is the mobile phone companies. Potentially, mobile phones have opened access to financial services that people in low income ventures could not have access to. People working in the informal waste management business are among the population left out from financial services because the fall in the low-income earner bracket. The mobile app was designed to keep a record of a waste seller’s transactions, similar to an employee’s payslip giving opportunity for a person to know their gross income thereby acting as an impetus to prudent financial management. In this way, a seller would be able to plan, save or invest their money more productively raising their credit worthiness with credit providers. It would not be far from the truth to make a hypothesis that if the waste sellers use a mobile platform to store transaction history then the sellers will have access to formal credit.

Expectations are to see possibility of linking the transaction history as a leverage to a savings and credit facility. Cognisant of the important role small and medium enterprises play in driving the country’s economy linking them to financial facilities would be a good push towards scaling up their operations and improving financial inclusion in the country

We would be happy to hear your experiences on how mobile apps are being used to increase financial inclusion for the vulnerable population especially women. #UNDPZambia. #AccleratorLabs Email: acclab.zm@undp.org