Best Practices for Using Mobile Money Alongside DreamSave

Best Practices for Using Mobile Money Alongside DreamSave

DreamSave is a powerful mobile Android solution that empowers informal savings groups, community banks, and Village Savings and Loan Associations (VSLAs) to keep better financial records. Instead of using paper, which can be insecure and prone to error, DreamSave lets groups store their financial information digitally. This makes their records more accurate and helps them access formal credit.
For many groups, switching from paper ledgers to digital records is the final step in modernizing their processes. But for others, it’s just the beginning. For these tech-savvy groups, the ultimate goal is to completely digitise all their activities by shifting member savings and loan payments from cash to digital using mobile money.
DreamStart Labs is actively working to include a mobile money feature in DreamSave to support their growing demand. In the meantime, VSLASs and savings groups can use DreamSave alongside their mobile money accounts. This guide explains how groups can do this effectively.

Digital transaction needs for each DreamSave group

To start, it’s important to recognise that not all digital savings groups (DSG) are the same. Depending on their level of maturity, groups can vary widely in terms of formalization as well as both their readiness and willingness to fully digitise their operations. The different kinds of DSGs can be broadly categorized into three general levels varying by the type of virtual interaction and payment method used, as illustrated in the diagram below:
DSG Levels Diagram
Level 1 groups meet in person and conduct all their transactions in cash using a physical cashbox. Level 2 groups also meet in person but some members choose to use mobile money (MM) for their transactions while others continue to use cash. Lastly, level 3 groups are characterized by zero cash transactions. These groups prefer to primarily use MM to save and borrow and feel comfortable meeting completely remotely.
Understanding which category your groups fall into is key to understanding how DreamSave can be used to satisfy their digital payment needs. To help NGO partners leverage DreamSave in addition to MM, this note will focus only on Level 2 and Level 3 DSGs.

Key prerequisites for Using Mobile Money with DreamSave

In the same way that individuals must meet certain conditions before they can start using MM, DSGs also need to ensure they satisfy certain criteria before incorporating MM into their meetings on DreamSave. Depending on their level of digitisation, MM may imply significant changes to how a group is organized and how meetings are conducted. Table 1 outlines these prerequisites for the successful inclusion of MM into a group’s DreamSave meeting procedure.
 

Requirements

Level 2 DSG

Level 3 DSG

Secure MM group account[1]

Registered SIM Card with a MM account for the group

  1. Registered SIM card with a MM account for the groups
  2. Member’s accounts registered under their names if possible

DreamSave mastery

Bookkeepers can run meetings with the app


  1. Bookkeepers can run meetings with the app
  2. Members are able to use their personal accounts to check their balance in addition to SMS receipts

Technical readiness

  1. Availability of MM services in the area (with at least one MM agent)
  2. Reliable network to process transactions
  3. Basic Knowledge of mobile money operations among members

Behavioural

  1. Group officers’ transparency & honesty
  2. MM agent’s non-disclosure of member financial information
  3. Group officers’ availability for MM withdrawal
  4. Trust between members and their leaders with real or digital money
  5. Group consensus on how money is handled and distributed between physical and virtual cashboxes

MM transfer fee


Each DSG must decide whether or not to add the transfer fee to each mobile money transaction. The decision should be captured within the topic discussion


Table 1 Prerequisites for MM adoption with DreamSave

Guidelines for DreamSave Meetings Using Mobile Money

Using mobile money for transactions introduce a few changes to the usual DreamSave meeting process, depending on the group’s digitization level
[2]. 
For simplicity, this section will only focus on describing how Level 2 and 3 groups can incorporate mobile money into their digital meeting recordkeeping with DreamSave.

1. Level 2 groups

The meeting starts as a normal DreamSave meeting with a few adjustments:

  1. Attendance: MM usage introduces a new form of being "Absent with Representation." Instead of contributing through someone, such members can send digital payments directly. This adds uncertainty to the attendance step, as a member initially marked absent may later send a payment. To keep attendance efficient and hassle-free, bookkeepers should first mark all members as present. Later, they can reopen the step and update statuses: absent members who sent digital payments will be marked "Absent with Representation," while those who neither came or contributed will be marked “Absent”.
  2. Opening summary: The group leader will check the MM account balance. The bookkeeper initiates the USSD transaction and then hands the phone to the treasurer to discreetly enter the passcode. The sum of the MM balance and the cash balance should match the total funds balance in DreamSave.
  3. Savings: The bookkeeper should record digital payments in the same way as cash payments. There is no need to record the transfer fees if members add them to their digital payments
    . Digital contributions are recorded in DreamSave when confirmation SMSes are received by the group phone. Any digital payments received after the meeting will be recorded on the next meeting.
  4. Loans: For simplicity, groups should withdraw loan amounts from the source with the highest balance. In case that source is the group MM wallet, lenders will sign within the app after receiving the transfer notification on their phones.
  5. Miscellaneous transactions: The recommendations for recording expenses are the same as those for loans. The amount should be withdrawn from the source with the highest amount. Incomes generated can be added to the loan fund in cash or via MM transfers.      
  6. Closing summary: The account balance will be checked using the last SMS receipt sent by mobile money or via the USSD prompt.

2. Level 3 groups

The below approach can be taken by groups aiming to conduct meetings in DreamSave completely virtually with MM:

  1.  Start: The president announces the start of the meeting through a communication channel like WhatsApp. The bookkeeper opens the DreamSave app and starts a new meeting.
  2. Attendance: The bookkeeper marks members as present. He or she will reopen this step at the end of the meeting to mark “absent with representation” members who sent their contributions to the group virtual cashbox or MM wallet but were not virtually present. Members who didn’t send contributions or communicate will be marked “absent”.
  3. Opening Summary:
    The bookkeeper checks and records the group MM account balances.      
  4. Savings: Members send their contributions (shares, social funds, loan repayments) via MM. Transactions are visible to the bookkeeper through SMS notifications. The bookkeeper will record the digital savings as confirmation SMSes. Remember, the bookkeeper has the phone that contains the virtual cashbox’s SIM card.
  5. New Loans:
    Lenders page all members or at least the group officers to express their interest in a loan. Objections are raised via calls to the president. If no objections are received within the meeting time, the loan is considered approved and will be recorded in DreamSave.
  6. End: The bookkeeper edits the attendance status, imposes fines if applicable, and closes the meeting in DreamSave.

Risk Mitigation with Mobile Money

Digital payments introduce a new kind of risk DSG: virtual cashbox funds mismanagement. This risk can be mitigated by setting up a secured mobile money wallet for the group. Here is how to do so:
  1. A member, usually the president, purchases a new SIM card and registers a Mobile Money account in their name.
  2. The SIM card is then handed to another member (e.g., the treasurer), who changes the account’s passcode.
  3. The SIM card is inserted into the group’s smartphone, which is managed by the DreamSave bookkeeper.
The 3 members above shouldn’t belong to the same family or live in the same neighborhood. If possible, other literate members can check the mobile money SMS notification and note the remaining balance after each meeting.

Conclusion

By following these guidelines, DSGs can safely and efficiently use Mobile Money during their DreamSave meetings. Though different groups may use mobile money in different ways to support their group savings, this guideline aims to describe a simplified understanding of how groups can begin their Mobile Money journey using DreamSave.
​
[1] See the section on “Risk Mitigation with Mobile Money” for more information

[2] This guidance note assumes that most Level 2 groups consider the group mobile money wallet to function as a digital extension of the physical cashbox. This assumption is made to ensure guidance is as applicable and generalised as possible, while noting that virtual cashboxes could be utilised in various different ways. For instance, designating the use of virtual cashboxes only for specific additional funds like the social fund.

[3] In groups where transfer fees are added to every contribution, borrowers must receive their loan amount inclusive of the transfer fee.  In this scenario, the MM balance for the virtual cashbox will be slightly higher than the loan fund balance displayed in DreamSave unless the surplus is noted as an expense under Miscellaneous Transactions. Otherwise, the transfer fee is deducted from the loan amount while still requiring the borrower to repay as if they received the full loan amount.



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