Home / How Mobile Money Saved This Project 60% in Grant Operating Costs

An attendee at a voter registration event in Dzomba, Msambweni Constituency, 2.5 hours outside of Mombasa, Kenya, receives her transport and meal allowance via M-PESA

(Photo Credit: USAID KTI Project Nov 2012)

By: Svitlana Hall & Anthony Latta

 In February 2012, the USAID-Kenya Transition Initiative (KTI) started using mobile money as a means to reduce operating costs for facilitating payments to grantees. Using cash payments for providing grants in rural Kenya requires significant costs in terms of travel-related expenses and staff time. Being in Kenya, where mobile money is now widely available and having a project with a large grant component requiring frequent small payments and reimbursements in cash, KTI made a perfectly suited project to shift to mobile money enabled payments. KTI turned to M-PESA, due to its wide outreach and its online corporate bulk payment service, to send grants and payments to project recipients in rural areas, resulting in greater efficiency, lower costs, and increased security.

By March 2012, KTI processed 306 project-related mobile money transfers amounting to 1,600,000 KES (approximately $19,000) via M-PESA and, by October 2012, the number of monthly mobile money transfers increased considerably to 3,372 project-related M-PESA transactions totaling 7,041,840 KES (approximately $84,841).

Cost Savings

Analyzing the before and after scenarios, the project has been able to document significant cost savings. During the month of October, KTI’s Nairobi office (one of four project offices) sent 966 M-PESA transfers totaling $37,569.  For these payments alone, the project previously paid approximately $2,111 in fuel costs, airfare, lodging, and per diem, not to mention a significant amount of staff time related to disbursing these grants.  Utilizing M-PESA’s online bulk payment service and partnering with counterparts, the project only paid $845 in fees.  This resulted in substantial operational savings of $1,265 during the month of October alone, a 60% reduction in costs.

 Comparison of Operating Costs for Grant Disbursements/PaymentsKTI Nairobi Office, Oct 2012
Expenses Cash Payments Mobile Money Payments
Fuel costs  $629  
Airfare $482  
Lodging $560  
M&IE $440  
Fees   $845
Totals $2,111 $845

Improved Efficiency & Increased Security

Using the example of just one grant event, the shift to using mobile money transfers over cash-based transactions clearly demonstrates the overall improvement in efficiency. In a typical series of Yes Youth Can grant events managed by the Nairobi office and conducted in Mombasa, Eldoret, Kisumu, and Kakamega, a KTI project employee would have flown or driven to each multi-day event, resulting in several days of staff time entailing a significant security risk of carrying around large amounts of cash. By shifting to mobile money transfers instead of cash payments and by coordinating with local implementing partners at the event who assisted in the preparation of sign-in sheets, KTI was able to send approximately 400 transfers while saving several days of staff time and facilitating grant disbursements more efficiently and securely than before.

For those interested in hearing first hand about the experiences of the KTI project and its use of mobile money to save costs and improve efficiency, make sure to listen as Anthony Latta joins the panel discussion during the Mobile Money Global 2012 part of the Connected World Forum 2012 in Dubai on Wednesday, November 21, 2012 as well as to listen to Anthony Latta share his tips during the workshop on Thursday, November 22, 2012.


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_______________________________________________________________i     Anthony Latta is a project management and international development specialist with Chemonics International and has administered USAID and other U.S. Government projects throughout Europe, Eurasia, Afghanistan and Kenya. He has extensive experience and is recognized as a company leader in using mobile payments (M-Pesa) for operations and grants activities.

Svitlana Hall is a Finance Associate at Chemonics International.  She has provided support to Chemonics’ three other USAID projects in Kenya to make use of the M-PESA Corporate Bulk Payment Services as part of Chemonics International’s internal work to shift from cash to mobile money and electronic payments.