Building Resilience in Complex Crisis Financial Service Assessment Report
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Photo by Mercy Corps Nigeria BUILDING RESILIENCE IN COMPLEX CRISIS FINANCIAL SERVICE ASSESSMENT REPORT 2019 `0 BRICC - Financial Service Providers Assessment Report Table of Contents GLOSSARY 2 EXECUTIVE SUMMARY 3 BACKGROUND: 4 PURPOSE: 4 METHODOLOGY 5 KEY FINDINGS: 10 ANALYSIS 12 REGULARITY REVIEW / RECOMMENDATIONS 18 CHALLENGES AND LIMITATIONS: 19 CONCLUSION AND RECOMMENDATIONS: 20 1 BRICC - Financial Service Providers Assessment Report GLOSSARY ACF Action Contre la Faim BOA Bank of Agriculture BRICC Building Resilience in Complex Crises CARM Community Accountability and Response Mechanism CBN Central Bank of Nigeria COOPI Cooperazione Internazionale CCT Conditional Cash Transfer CTP Cash Transfer Program DEC Development Exchange Centre DRC Danish Refugee Council EFCC Economic and Financial Crime Commission E-Platform Electronic Platform EU European Union FCMB First City Monument Bank FGD Focus Group Discussion FAO Food and Agricultural Organization of the United Nations FSP Financial Service Providers FSPA Financial Service Providers Assessment FGD Focus Group Discussion Globacom Global Communications Limited IBTC Investment Banking & Trust Company ICRC International Committee of the Red Cross ICT Information and Communications Technology INGO International Non-Governmental Organization KII Key Informant Interview LGA Local Government Area MEAL Monitoring Evaluation and Learning MC Mercy Corps MFI Microfinance Institutions MMO Mobile Money Operators MMT Mobile Money Transfer MNO Mobile Network Operators MTN Mobile Telephone Network NGO Non-Governmental Organization POC People of Concern POS Point of Sale PWDs People with Disabilities SCUML Special Control Unit on Money Laundering SIM Subscriber Identity Module SMS Short Message Service SCI Save The Children International TORs Terms of References UBA United Bank for Africa UCT Unconditional Cash Transfers 2 BRICC - Financial Service Providers Assessment Report UN United Nations UNOCHA United Nations Office for the Coordination of Humanitarian Affairs WFP World Food Program YESSO Youth Employment and Social Support Operation EXECUTIVE SUMMARY: In December 2019, under the leadership of the Mercy Corps, an FSP assessment was conducted to identify a viable modality for delivering financial assistance to Programme Participants targeted under the Building Resilience in Complex Crises (BRICC) programme, A European Union (EU) funded Program in 6 Local Government Areas (LGAs) of Damaturu, Potiskum, Gujuba, Gulani, Geidam, and Yunusari. The assessment also seeks to identify potential service provider(s) for humanitarian assistance through Cash Transfer Programming. The consortium comprised of Mercy Corps, COOPI International and Danish Refugee Council as Consortium partners. The assessment will also help in identifying the most efficient and effective cash transfer options available in these areas of operation and recommend the best mechanism for the delivery of cash transfers to vulnerable conflict-affected Households. Some of the excerpts from the assessment: - Cash in envelope (cash on counter) has been the most preferred delivery mechanism by elderly women, men, and young girls due to access issues; - Six Mobile Money Operators in Damaturu with their agents are willing to work in the BRICC Local Government Areas of intervention, - Five commercial banks/MFI who have previous experience in Cash Transfer Programming, couple of them have potential to come into terms - there are four E-platform service providers operating within Yobe State. However, two of them are already having partnership with the BRICC consortium members (RedRose and Nagis) – and these are the most viable service providers observed as per their structure, operational and technical capacity and remote management skills - Commercial Bank has also expanded their network from main cities to small towns with increased dependency on Mobile Money Agents - The Commercial Banks mostly rely on agents for outreach; to whom they provide POS machines for the delivery of cash to remote locations, - The banks also have static and mobile agents who are local and with good financial capacity but with limited structure and formal business ethics. These cash out agents are mostly mobile and have the ability to move to areas where there are shortages of Mobile Money Agents. Considering the coverage of the Mobile Money Operators per location; Damaturu and Potiskum being largely urban areas, have Airtel, MTN and Globacom. Gujba, Geidam and Gulani have only Airtel mobile services with irregular occurrence while there is no network in Yunisari 1 There are around 5000 to 6,000 (formal and informal) Cash out/Mobile Money Agents in the state who are being directly and indirectly contracted by the Government, NGOs, MMT companies and 1 This calculation is based on the information provided by different actors; randomly calculated about the numbers of agents in different parts of Yobe 3 BRICC - Financial Service Providers Assessment Report Banks for humanitarian response and government programs. Indirect engagement with these mobile Money Agents in program implementation will be helpful to expedite the cash out process; assuring that robust monitoring measures are in place during the implementation, vis-à-vis EFCC compliance and regulations are taken in to consideration The assessment also gathered information from three implementing partners that have previous experience of Implementing CTP (WFP, ACF and Save the Children) in Yobe State. Contracting with different service providers for one task remained a lesson learned. It has been encouraged to shoulder responsibility to one service provider, develop strong monitoring system and ensure the compliance and avoid the risk of delays and mismanagement, increased exploitation and fraudulent acts by Mobile Money agent BACKGROUND: The BRICC consortium was launched in April 2019 with the aim of building the resilience of 26,875 households comprising 6,719 men, 6,719 women, 6,719 male youth, and 6,718 female youth in 6 Local Government Areas (LGAs) of Yobe state. BRICC is a three-year Programme funded by European Union (EU) and implemented by a consortium comprising the lead agency Mercy Corps (MC), Danish Refugee Council (DRC) and COOPI. The Programme will build the resilience capacity of households exposed to shocks and stresses induced by conflict, climate change and other adversities in Yobe state. The programme’s resilience strategy will lead to the implementation of diverse yet interrelated technical approaches that will restore and reinforce the absorptive, adaptive and transformative capacities of individuals, households, communities and governance structures in Yobe state. Some of the technical approaches to be implemented include the transfer of cash to households, promotion of savings groups, providing technical assistance to the state and local government structures on social protection, training of community structures on conflict management and mitigation, strengthening farmer groups and associations and facilitating their access to input and output markets and entrepreneurship development and start-up support for youth. In the transfer of cash to households and providing technical assistance on social protection the BRICC programme intends to establish linkages and collaborate with existing financial service and safety net providers in Yobe that have experience and capacity in cash transfer and safety net activities. This assessment generates awareness and evidence in the results of the analysis conducted against the primary and secondary sources related to the financial services and safety net providers and help the program to choose the most viable options of delivery mechanism and service providers This assessment also considers the most preferred transfer modality by program participants bearing in mind safety, efficiency, user friendliness and the modality that gives room for little or no extortion. PURPOSE: The results of the assessment will be used to identify, prioritize and recommend options that are most effective, timely, efficient and safe to transfer un/conditional cash to programme participants. The specific objectives of the assessments are to: 4 BRICC - Financial Service Providers Assessment Report ● Identify existing FSPs in Yobe state and determine the types and features of financial services and products that they offer including cash transfers, savings and loans products and the modalities through which these are provided ● Identify existing safety-net providers and determine the types, features and delivery channels they use in providing safety nets to communities in Yobe state ● Determination of the types, status and penetration of infrastructure used by FSPs in the delivery of cash transfers and financial services to communities in Yobe state ● Establish the end user level of awareness, knowledge, usage, satisfaction and preference of modalities used to deliver cash transfers and financial services by FSPs in Yobe state ● Analyze the identified existing FSPs delivering cash in Yobe state and recommend the most effectives options to be considered for use by the BRICC programme considering the number, value, frequency, efficiency and purpose of transfers, flexibility, risk and geographical coverage ● Analyze identified existing safety net programmes and recommend those that should be considered for referral and transitioning linkages of household caseloads by the BRICC programme considering alignment of target groups, purpose and location