Beyond a humanitarian support mechanism, the UnBlocked Cash is generating a market multiplier effect for local businesses, becoming a localized market stimulus for recovering economies. It also sets an example of partnering with the private sector to extend the program’s impact.
At the vendors training in Port Vila for the Oxfam UnBlocked Cash program, the room is full of proud shopkeepers and micro-entrepreneurs with radiant smiles as they successfully complete an electronic transaction for the very first time. The Vanuatu Business Resilience Council (VBRC) field team has now trained over 320 vendors across Shefa, Tafea and Sanma provinces since September 2020.
The VBRC is a sub-committee of the Vanuatu Chamber of Commerce and Industry, and provides a coordination mechanism for the private sector to engage with government and partners on resilience building, response and recovery activities. VBRC is supporting Oxfam as a partner providing outreach and training to build the network of local vendors supporting the UnBlocked Cash program.
Financial literacy and inclusion
In a country where only 37% of the population has access to formal banking systems, many of the vendors have never processed electronic payments. Beyond using a basic calculator, the vast majority of local business people and small vendors are unable to easily adopt the use of available technology — such as POS devices, electronic cash registers and other card-scanning devices — to process payments in their stores. Now, equipped with a smartphone and the Sempo App they are able to receive a payment into their digital wallets with just a tap of the card, which the UnBlocked Cash e-voucher Oxfam has provided to over 4,000 households across the country. Vendors can instantly receive payments, are able to access revenue through a weekly payout system and can use other vendors in the network to send and receive payments or cash-out funds when needed.
Vanuatu’s local vendors in the UnBlocked Cash network are now at the center of a technology and banking revolution.
Despite some initial trepidation, the vendors are completing their training and leaving excited and confident about using this new tap and pay retail system. The program also focuses on improving digital and conventional financial inclusion, encouraging vendors to sign up for bank accounts in order to receive timely payments for their participation in the program. This focus on finance has also been mainstreamed by VBRC in training and vendor support, as it also encourages better financial management through improved tracking and reporting of sales income; this has enabled businesses to more confidently operate and make decisions.
A last-mile solution
Many of the registered vendors are from small rural communities without access to electricity grids, but with access to mobile phone networks. It is common in Vanuatu to see solar chargers in rural communities crowded with mobile phones plugged in, demonstrating that mobile devices are still a core tool for local people and businesses alike. By using the Oxfam-issued smartphone to connect to mobile data networks, vendors are able to easily upload and process payments from households visiting their locations to purchase goods, such as fresh food, hardware, medication, utility payments and transport. The app is also available in the local language Bislama to make it accessible to large and small, informal vendors alike.
For the few stores in the larger towns that have a conventional point of sale systems integrated with their cash registers, the Sempo application and smartphone-based POS functionality also process a simple daily sales file that can be sent via email, ensuring that larger businesses are able to integrate and reconcile payments and daily cash flow across multiple devices.
Using the technology the vendors are able to better support each other, too. A vendor-to-vendor payment and the cash-out option allow vendors to transfer money between themselves, encouraging vendors to utilize the revenue to restock and buy supplies within the vendor network. This helps the smaller vendors to purchase goods from the larger wholesalers electronically, providing more secure and easy transactions and encouraging the vendors to support each other across the value chain.
We believe that this the program is generating a significant market multiplier effect, acting simultaneously as a critical humanitarian support mechanism, as well as a localized market stimulus.
With payments automatically being deposited into business owner bank accounts, sales and business income are better managed. Vendors who are far from wholesale stores and banking facilities, and who need to pay to travel to town to make deposits are now benefiting from lower costs to access banking services by leveraging the transport providers across the network, and benefiting from Oxfam’s weekly payout mechanism to ensure cash flow remains steady. In previous cash transfer programs we have witnessed the payments to vendors sometimes taking weeks, which explains why only the bigger vendors who could afford it could participate. Over 90% of the vendors enrolled in the program have reported an increase in revenue since October 2020.
Inclusive of informal vendors
From a gender equity perspective, the program has given many female market vendors a wonderful opportunity to increase sales and become more in charge of the income that they bring into the household. While many formalised businesses in Vanuatu are owned by men, it is mostly women — the “market mamas” who sell fresh fruit and vegetables at the roadside markets. This program has given them an economic boost, while also providing a boost to their confidence.
In addition, many have now benefited from an increase in digital literacy, having learned how to use and navigate a smartphone for the first time. The VBRC team has created specialized financial literacy programs to work alongside the Oxfam program to support market vendors with greater financial literacy.
For many women, this is their first opportunity to be part of a formal program or receive such support.