If they are not considered entirely essential, mobile phones are a basic tool for our everyday life and facilitate how we live. Mobile technology can be a significant driver in terms of our welfare and is, therefore, fundamental in the transformation of a more disadvantaged person’s life.

The use of new technological tools, such as mobile money, is being embraced as a way to better address the needs of people suffering the consequences of a severe humanitarian crisis.

For the population of war-torn Yemen, the new initiatives for the application of mobile money technology are designed to increase financial inclusion across the country and to enforce its ecosystem.

This is the aim of The National Wallet Company, a Yemeni fin-tech company that is currently proposing an innovative mobile money platform to be used by those that are most in need of support.

Yemen’s humanitarian crisis is one of the worst in the world

More than four years of civil war has caused mass instability, danger, and insecurity in Yemen. According to the UN, the country is facing the world’s worst humanitarian crisis with the overwhelming majority of its population living on the brink of famine and poverty. Despite a large relief operation in the country led by various international and local partners, an estimated 80% of Yemen’s total population, an estimated 24.1 million people, is in need of some form of humanitarian or protective aid. Of those, 14.3 million are in serious need of assistance.

Yemen’s economy, as a result of the war, has collapsed and exacerbated the humanitarian crisis. A number of currency depreciations in 2018 and 2019 and the destruction of public infrastructure and financial services have contributed to the population’s agony. Almost half of Yemen’s population before the war lived below the poverty line, that number has not risen to 71 and 78%.

During its recent humanitarian update about Yemen, the United Nations Office for the Coordination of Humanitarian Affairs stated that relief workers who attempt to operate in the country face serious obstacles when trying to reach millions of at-risk people in hard-to-reach districts. Restrictions on movement prevent humanitarian operations from getting off the ground in 75 of Yemen’s 333 districts. This effectively deprives at least 5.1 million people of the aid they need. The authorities are of little help as Yemen’s wartime bureaucracy is often slow to approve projects and regularly forces aid agencies to file additional documentation and pay unforeseen taxes.

Technological innovation for development

Amid the financial uncertainty and an economy on the verge of collapse, innovation initiatives are trying to fill the financial exclusion gap to reduce poverty and achieve inclusive economic growth by bringing in new and using already established technology that can contribute to meeting Yemen’s Sustainable Development Goals.

Mobile money has brought several benefits to countries with similar humanitarian crises, including Kenya and Somalia, as it can be a driver for financial inclusion. Anyone with a simple mobile phone is able to transfer money, pay bills, and do other types of transactions without requiring a bank account or having to look for cashpoints, particularly in warzones where neither would be easily available.

In Yemen’s scene, the mobile money sector is slowly developing. The National Wallet Company, or NWC, the Yemeni-run business that develops a mobile money e-wallet for the country, is designed to boost financial inclusion across the country, including in hard-to-reach rural communities.

The potential of mobile money in the southern Arabian Peninsula could make a significant impact in Yemen, according to the co-founder of NWC, Mohamed Hayel Saeed, who reiterates that the number of people in Yemen who are without or have no access to a bank account could amount to over 20 million. By bringing this population into the formal economy, this would enable the growth of Yemen’s money supply and provide a gateway to transformative services that would include healthcare, education, financial services, employment, and social protection.

‘‘Personally, every day I learn from the incredible potential and entrepreneurial spirit I see in the Yemeni population, those who want to feel more in control of their future. My brother and I are committed to working with international partners and the local communities to deliver an innovative platform that will kick start the Yemeni economy and enable the recipients of aid to break free from the cycle of poverty which blights the lives of millions,’’ said Saeed before adding, “Yemenis in every town and village across all 22 governorates will be able to carry out everyday necessities such as paying for food and water, bills or paying their workers’ salaries through a simple, secure and accessible platform
that will replace their current dependence on cash.”

The platform could also allow NGO’s and other humanitarian organisations operating in the country to seamlessly provide their assistance to those who are most in need. According to Saeed, these organisations experience significant challenges with cash transfer programmes that use expensive and nonsecure methods to distribute cash and aid.

Using a technology that enables the disbursement of money through a basic mobile phone ‘‘will help to significantly reduce costs for development partners and enable greater investment in organisational growth, increase staff productivity and the capacity to deliver vital services on-the-ground,’’ Saeed said.

The platform’s requirements

The current mobile money regulatory guidelines in Yemen state that banks only have the jurisdiction to operate mobile money platforms from a single pool account. According to Saeed, the ongoing civil war allows for only a limited geographical reach for each individual bank. Updating the guidelines would allow non-bank payment service providers to launch mobile money services in Yemen as part of an effort to reduce any insolvency risks and increase financial inclusion.

The only way this can happen, Saeed adds, is with the scalability of mobile money to the communities on a nationwide scale.

Introducing new technology into a country with major security risks, like Yemen, certainly has its challenges. What’s key to the successful implementation of mobile money is to ensure that the population is equipped with the proper knowledge and expertise that it needs.

‘NWC’s unparalleled insight into Yemen’s local dynamics and cultural nuances will be
combined with financial literacy and education programmes to build trust within communities and protect the many vulnerable people who will be using digital financial services for the very first time. NWC is looking for partners in the international community to help deliver financial education programmes,’’ said Saeed.

NWC aims to launch the mobile money platform by working in partnership with all of Yemen’s major banks, mobile network operators, distributors and retailers. Its investors are fin-tech investment vehicle Murooj Electronic Services, WeNet (the Yemen Financial Services Company), owned by 11 banks operating in Yemen, and Hayel Saeed Anam Group.