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A Big Day for Inclusive Finance — and for Digital Public Goods

Lin Gao - Former Research Specialist, Innovation, The Rockefeller Foundation

Around the world, 1.7 billion adults don’t have a bank account. Many more have an account but pay significant fractions of their income to do basic transactions, wait days for transactions to clear, or can’t easily access their money.

The Covid-19 crisis has made the need for financial inclusion even more clear. As the world shelters in place, digital payments and remittances became the only way to do business in some cases. Withdrawing money from a bank became impossible in many places. Governments have been able to distribute relief payments—but without digital payments, this help is taking months to arrive, even in wealthy countries like the United States.  As we beat back the virus, contactless payments may become the new default, locking out those without an account.

This is why The Rockefeller Foundation joined a coalition of philanthropies and businesses earlier this month in launching The Mojaloop Foundation. This new organization is dedicated to developing Mojaloop, an open-source software project that will make financial services available to the world’s poorest people.

Mojaloop doesn’t provide financial services itself. Rather, it’s a free set of tools that can be used to build financial services that are instant, cheap, and accessible to anyone with a mobile phone. It will be the basis of Tanzania’s Instant Payment System launching this fall, and, soon after, a mobile money wallet that works across the African continent.

While all of The Mojaloop Foundation’s backers share a vision of financial inclusion, there are two specific reasons why The Rockefeller Foundation is joining.

  1. Digital payments systems are basic infrastructure for all of our work. For example, our partners in ending energy poverty generally need to charge their customers to make their operations sustainable. If their customers can pay easily and in small amounts, without large transaction fees, they can offer service to more people. Digital payments then give those people more options for earning a livelihood using their newfound access to power.
  2. The Mojaloop Foundation represents bold new thinking about how to build this kind of digital infrastructure. The goal of Mojaloop isn’t to launch a new payments system—it’s to work together to build a common set of tools and common set of standards, making it easier for anyone to create payments systems that work for the poor and work with each other.

Like Linux and other open-source software, Mojaloop is openly available as a digital public good and built on open standards to foster interoperability. Our hope is that it will allow governments, businesses, and non-profits to create better systems that work for more people in more places, cutting costs and improving services.

The Mojaloop system was originally developed by the Bill and Melinda Gates Foundation. The creation of the Mojaloop Foundation marks the moment when a much broader community takes on the responsibility for the project.

If it’s going to be a building block that will underpin the livelihoods of billions of people, Mojaloop will need to be built on the ingenuity and effort of many organizations and individuals. As we’ve seen with other grantees and partners developing digital public goods, like the Open Mobility Foundation, technology gains more power to do good when it has a community and organization behind it.

Building this community and organization won’t be easy—there isn’t an established playbook for creating this type of public good. But it’s worth doing. We look forward to helping grow and broaden Mojaloop’s community with an eye toward openness, interoperability, and universal financial inclusion.

To learn more, read this Mojaloop Foundation Q&A with Kevin O’Neil, Director of Data and Technology at The Rockefeller Foundation.