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The rise and challenges of social entrepreneurship

Skoll Centre Early Career Research Fellow Tanja Collavo hosted a workshop at Marmalade 2017 on the strengths and weaknesses of the social entrepreneurship sector in England… and where next.  

The State of Social Entrepreneurship in England – Strengths, Issues, and Solutions.

What is the state of social entrepreneurship in England? In the course of my DPhil research at Saïd Business School I interviewed key people at social entrepreneurship organisations, revealing a snapshot of strengths, weaknesses, worries and ambitions for the future development of the sector. At this workshop I presented some of my findings and asked participants to give their thoughts and elaborate actionable proposals around the issues most important to them.

The debate was lively! The overall agreement was that the sector is growing, vibrant, diverse, exciting, and constantly changing thanks to the very low barriers to entry. Its core strengths are its ability to break silos across sectors and organisations, and its democratic nature, encouraging bottom-up solutions to social problems and the retention of the wealth produced at the local level. Additionally, the perception is that the quality of products and services delivered by social enterprises is constantly improving and that this is a great business card to increase their market penetration both in the business-to-business and business-to-consumer markets. In this sense, many workshop participants welcomed the shift of the sector towards business and believe that more and more social enterprises should aim to become business-savvy and competitive.

But participants also agreed that there are still many key issues holding back the growth and success of the social entrepreneurship sector:

  1. No one talks about failures

There is very little learning inside the sector because media, intermediaries, social entrepreneurs and enterprises talk a lot about successes but hardly ever about failures.

  1. The passion paradox

Most ventures start because of founder’s personal experience with or passion for the problem they are trying to tackle. This has obvious positives but also can lead to a “do something now” mindset promoting easy solutions and immediate action more than the elaboration of long-term strategies. Further consequences can be the lack of professional sectoral knowledge and lower inclination towards collaboration due to high levels of personal ownership and commitment, also associated with stress and burnout.

  1. Difficulty accessing supply chains

A third issue present in the sector is the low presence of social entrepreneurial organisations in supply chains, both in the business and in the public sectors. In fact, in most cases, social ventures are too small to bid for contracts and too young to have a proven track record that would facilitate their winning supply or service contracts.

  1. Too dependent on government and poor finance

Participants described the sector as still too reliant on government and as lacking appropriate financial support matching its funding requirements and specificities. Financial support was described as particularly scarce at regional and local level, with core sector and financial intermediaries being based in London and mostly focusing on organisations and areas geographically close to them.

  1. Lack of collaboration amongst support organisations

Finally, the group agreed on one of the main findings of my research projects: the lack of collaboration among sector intermediaries. This leads to a duplication of efforts and to a degree of confusion among social entrepreneurs and enterprises about where to look for support and how to reconcile the different messages they hear from the different intermediaries they are affiliated with.

Out of this list of issues, the workshop participants picked two areas that they thought were especially relevant in order for the sector to keep on thriving: the access of social enterprises supply chains in private and public sectors, and the low collaboration among sector intermediaries.

Social entrepreneurship in supply chains

The group tackling the issue “access to supply chains” found several core causes for this issue. Some causes can be attributed to failings of social enterprises themselves:

  • a lack of transparency and metrics that would lower the perceived risk of social ventures;
  • a low understanding of tender processes;
  • and the inability of social enterprises to scale and integrate or collaborate in order to bid for big projects and commissions.

Other challenges are created by the surrounding ecosystem:

  • procurement practices and contracts that do not favour the involvement of social enterprises and small organisations in supply chains of corporations and public bodies;
  • the existing regulatory environment;
  • and the still low recognition of the value and specifies of social enterprises outside of the sector.

Proposed solutions to improve the situation relied on the involvement of social entrepreneurs and enterprises and/or in that of sector intermediaries. Social entrepreneurs and enterprises should, with the help of intermediaries, lobby both the government for changes in legislation regarding tendering processes, and private companies to convince them about the possibility to collaborate with social enterprises to enhance the sustainability and credibility/effectiveness of their CSR practices. Furthermore, on their own, social entrepreneurs and enterprises should collaborate to win contracts and present stronger evidence about their performance and competitiveness, which would reduce the perceived risk for procuring organisations. Finally, sector intermediaries and research bodies should: analyse where the Social Value Act has worked; prove the benefits of values-based supply chains; and ensure social ventures involvement in supplier network platforms like Ariba.

Increasing collaboration amongst intermediaries

The second group of participants decided instead to work on the problem of low collaboration among social entrepreneurship sector intermediaries. The origins of this situation can be found in the presence in the sector of multiple umbrella bodies and intermediaries that publicly state that they are cooperating and collaborating with one another but in reality are very territorial and not interested in what other intermediaries do because “they occupy a separate niche in the sector”. In addition, many intermediaries have very specific views and beliefs about the definition of social entrepreneurship, about what the sector should look like, or about its role in society. This makes it difficult for them to really collaborate beyond sporadic cooperation for specific projects and events.

In this case, the proposed solution was to start from existing successful platforms involving several intermediaries (such as the Social Economy Alliance) and create a “network of networks”. This would have shared ownership and governance, would avoid exclusive definitions, and would initiate collaborations among different organisations around specific projects, such as “improving the access to supply chains for organisations in the social economy”. Cooperation on specific projects could be a starting point to create trust and a mutual understanding. At the same time, this “network of networks” should map out all the different intermediaries present in the sector and develop an online list differentiating organisations according to their core competences and easily accessible for organisations interested in obtaining support from the ecosystem. The creation of such a database would simplify the research process for individuals and organisations in need of help and would create the opportunity for intermediaries to understand where their respective strengths are and, thus, for sharing best practices and outsourcing to each other non-core activities.

What’s next?

The meeting finished with some networking and the hope that these solutions could lead to some concrete initiatives in the sector as well as to other opportunities to meet and discuss also the other issues present in the sector and ways to solve them in a collaborative way. Is anyone there up for the challenge? From my side, the door is open to anyone willing to know more or to jointly organise something along these lines to help the social entrepreneurship sector as well as other parts of the social economy grow and thrive even more.

Want to learn more about the interconnected networks within social entrepreneurship and social enterprise? Come along to Tanja’s talk ‘Networks in social entrepreneurship – how to support the sector while mobilising it‘ on Wednesday 17 May, at the Saïd Business School, Oxford.

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Why research matters for social entrepreneurship

Author: Julian Cottee

University social impact centres like the Skoll Centre are contributing to the growth of social entrepreneurship in a number of important ways, examined in a recent report authored by the Bridgespan Group, with the Skoll Foundation and the Skoll Centre. One side of the work of our centres is educational: we raise awareness of social impact with the student body, and equip future professionals and leaders to work in the sector. This work and its future development were explored in an article series curated by the Skoll Centre in the Stanford Social Innovation Review.

But besides educating, the other USP of social impact centres is our position at the heart of knowledge-generating research institutions. Bridgespan’s report highlighted two key contributions to come from leveraging our academic connections. First, our ability to convene practitioners and researchers to support learning and innovation; and second, the generation of actionable insights for social entrepreneurs. Two of the report’s key future opportunities for Centres also focused on research: the development of clusters of deep specialist expertise to support the evolution of practice; and the cementing of social impact as a recognised academic field, attracting legitimacy and funding to our efforts in this area.

Academics and social entrepreneurs are not always easy bedfellows. The stereotype is that academics are meticulous, long-term, big-picture thinkers, answering questions driven by curiosity. Entrepreneurs by contrast are risk-takers, impulsive, and focused on specific, immediate needs. There are many exceptions to these rules, but it is also true that academic incentives and the time taken to do in-depth research work make joint working between researchers and practitioners more difficult. And then there is the language of academia, which can be all but indecipherable to non-experts.

It is worthwhile, then, pausing for a moment to consider what there is to be gained by overcoming some of these barriers. We think that the potential is huge for research to further accelerate the impact of social entrepreneurship.

Here are six reasons why we should be doing more to bring these worlds closer together:

  1. Understanding the problem landscape: Research can allow us to gain a deep understanding of the landscape of the challenges we are trying to address – whether the challenge is homelessness in Oxford, or global climate change. Engaging with researchers gives social entrepreneurs the knowledge they need to formulate effective interventions and to think through systemic or unintended impacts.
  2. Understanding the solutions landscape: This is about knowing what has already been tried in tackling the challenges we are addressing: what has worked and what hasn’t. But it is also about the political economy and power dynamics of institutions in the solutions space. Very few ideas are really ‘new’ – building on successes and avoiding past and present failures can be a key to impact.
  3. Ideation and innovation in the impact gap: Researchers are in a brilliant position to be innovators. They can see the landscape of problems and solutions from above and creatively iterate new ideas in the ‘impact gap’. This is not only about innovative products and services, but innovations too in the wider ecosystem of governance, regulation, finance and knowledge.
  4. Assessing the impact of initiatives: Robust and defensible methods are at the core of academic research, allowing the production of credible evaluations of social impact. Such independent assessments are critical for leaders to make evidence-based decisions and can also be a powerful tool in policy advocacy and attracting funding and investment.
  5. Connecting the dots across silos: Researchers are able to spot commonalities and spread ideas across boundaries that might not otherwise be bridged. Through their networks and their public-facing activities, researchers can transport and translate knowledge of successful models across geographies and sectors, or across otherwise poorly connected organisations in the same sector.
  6. A critical birds-eye view: Academics are in a privileged position of being able to see glimpses of the ‘big picture’ that most of us are too buried in our day-to-day tasks to spot. They can help us to reflect on the social entrepreneurship model within the wider global picture, to understand trends, and to ask the hard questions about how well we are really serving the beneficiaries we are working for.

Academic researchers working in many of these important roles gathered for breakfast at the Skoll Centre during Skoll World Forum Week 2017 to discuss how we can do more to bring together research and practice. They were joined by social impact practitioners from a wide range of organisations with clear knowledge needs, keen to find new ways of collaborating. We think that university social impact centres can help to realise the benefits of doing so by connecting partners, catalysing new research, and communicating actionable insights. We invite your participation as we explore further in this area – please get in touch with your ideas and comments.

Sign up to the Skoll Centre’s thought leadership newsletter, which highlights the best social/environmental impact research coming out of the University of Oxford.

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Uniting theory and practice in the social entrepreneurship ecosystem

Author: Andrea Warriner

My Oxford is the Oxford of Saïd Business School, and within that, it is the busy hub of social entrepreneurship that is the Skoll Centre. Our programme delivery team and the entrepreneurial individuals we champion and work with are heavily biased towards execution and have a tendency to hurtle towards action. A full hour planning meeting for a new programme would be a long one for us. A day spent conducting research before moving into designing a new initiative is rare.

Thankfully, our Centre exists in the heart of a different Oxford – an Oxford which stretches between our Park End Street, down to Magdalen Bridge, and up to Summertown, and is home to those who prize evidence above all else. This Oxford is made up of people who might find the idea of launching headfirst into implementing a new solution without understanding the problem as well as they possibly can quite ludicrous.

So, last week, the week of the Skoll World Forum, when a good proportion of the global social entrepreneurship ecosystem poured into our ancient city, we conducted an experiment. Early on a Thursday morning, we deliberately gathered 30 ‘practitioners’ and 30 researchers interested in social impact, to consider how we bridge the gap between research and action to create better social and environmental outcomes, and to hear from those who are doing this already.

Our own Julian Cottee provoked us by outlining why the Skoll Centre thinks these unlikely bedfellows need to cosy up. He put forward that researchers can help us to better understand social and environmental problems, as well as the efficacy of existing solutions. He noted that research can support the innovation that needs to happen in the gap between the problem and existing solutions, and can assess the impact of social innovation, aiding better decision-making and allocation of resources going forward. Researchers also may have the perspective to guide which initiatives should be replicated across geographies and disciplines. Finally, they can consider the structural frameworks and power dynamics which underpin this social entrepreneurship ecosystem, and make the criticisms that those of us who are too close to the action are ill-positioned to make.

Over breakfast, we heard rapid fire pitches from those who are already in long-term research/practice relationships – like Muhammad Meki, an Oxford development economist who is designing a randomised control trial to assess the effectiveness of microfinance for micro-entrepreneurs in Nairobi, Kenya. The project is part of Mars Inc’s Mutuality in Business project, based here at Oxford Saïd.

What’s next?

The energy in the room was tangible, and the Skoll Centre will follow up to understand if the group found this first experiment useful, and what connections formed. We are also available to entrepreneurs/practitioners who want to tap into the Oxford research community in order to accelerate the impact of their work.  We’ll have a thought leadership series on the role of academic research in the social entrepreneurship ecosystem coming out later this year, and look forward to receiving contributions to that from those who helped shape this early conversation.

Finally, we are excited to live out our belief in the importance of research as an informant and shaper of social innovation, with the expansion of The Global Challenge to institutions across the world in 2017. The Challenge is a Skoll Centre founded competition that requires students to display a deep understanding of a chosen problem and its existing solutions, rather than jumping to developing a business plan. We’ve been amazed at the ‘ecosystem maps’ that are resulting from this Challenge, and invite the public to join us to see the outputs at The Global Challenge final, here in Oxford on 1 May.

As Daniela Papi-Thornton, founder of The Global Challenge and author of Tackling Heropreneurship, has succinctly put it – action without knowledge is foolishness, and knowledge without action is selfishness. It is the aim of our Research for Action initiative to help develop a cadre of wise and selfless partnerships in the pursuit of powerful impact.

Sign up to the Skoll Centre’s thought leadership newsletter, which highlights the best social/environmental impact research coming out of the University of Oxford.

If you’re interested in being added to a Google Group mailing list for individuals who want to forge partnerships between practice and research, drop us an email.

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Lessons of the Refugee Crisis from Alexander Betts

On a cold night in November, Alexander Betts gave his guest lecture at the Saïd Business School entitled “Transforming a Broken Refugee System”. Audience member and Oxford MBA student, Sagar Doshi, shares the key takeaways from the talk.

When Professor Alexander Betts takes the stage at the grand Nelson Mandela Lecture Theatre at the Saïd Business School, he doesn’t waste time. He just smiles at the audience and lays out his argument. His first point is a shot across the bow to the mostly European audience before him.

“Europe is not the centre of the refugee crisis today,” he asserts.

What? Really? A casual consumer of recent news might find this suspect. But Betts backs up his statement. Yes, Europe has significant problems of migration, he says, but these are primarily political and social problems. The actual challenge of dealing with refugees in Europe, while difficult, is nowhere near as acute as elsewhere.

50% of the world’s refugees orginate from Syria, Afghanistan, and Sudan. Where do these refugees end up? Do they all end up in Germany and Sweden? No, Betts says. It is low – or middle-income countries that accept the majority of refugees. Turkey is – by far – the leader, followed by Pakistan, Lebanon, Iran, Ethiopia, and Jordan.

Map of asylum claims in Europe in 2015

Map of asylum claims in Europe in 2015

Imagine you’re a Syrian refugee, fleeing Homs or Damascus or some other place of conflict in the civil war. Generally speaking, you have three choices:

  1. First, you could bring your family to a refugee camp, expecting stigma and stagnation.
  2. Second, since you are likely an urbanite yourself, you could move to another city, facing limited rights to work and a potential life of destitution.
  3. Third, you could commit to a dangerous journey over Turkey or across the Aegean Sea into Europe.

For years, many refugees—especially from Syria—opted for the third choice. Unfortunately, this occurre just as Europe’s political situation became increasingly delicate. As nationalism and xenophobia increased among European populations, refugee policies followed suit.

Famously, Germany, took a different path. But the environment, even for Germany, was caustic. By the time Angela Merkel gave her “Wir Schaffen Das” speech, she had to make her bold stand in a very muted way: “Germany will manage,” she announced to her people and to the world. She hoped, of course, that other countries would follow suit.

They didn’t. “There was collective action failure,” notes Betts. The UK, Denmark, Austria, and Europe as a whole took pains to limit refugees, so much so that by 2016, Merkel had to make an about face. Betts reminds us that although the door to Europe hasn’t completely closed today, “it’s very difficult to cross Turkey without the right documentation.”

So far, Betts is sharing a known story. It’s a sad and unfortunate story, but it is known.

But then Betts reaches the predicate to his lecture: “We need moral clarity about who we protect and how” he says.  In other words, we need to understand what refugees really, actually need and provide that.

“I would argue that there is no moral right to migrate,” says Betts. “What’s needed isn’t migration per se, but rather a safe haven, where they can get access to their most fundamental rights.”

So what provides that safe haven, and what do refugees need? For Betts, those needs come in three categories:

  1. Rescue – safe havens in host states, basic assistance
  2. Autonomy – jobs, education, socio-economic freedoms
  3. A route out of limbo – reimagined resettlement policies, updated visa systems, spontaneous arrival as last resort

Consider where refugees get to live. Today, many refugee aid regimes conceive of refugees as living in camps. Camps can provide rescue—though those on the Turkish side of the Syrian border might contest even that point—but they typically do not offer refugees autonomy or a route out of limbo. It’s not surprising that today’s refugees often opt to avoid encampment.

Office of the United Nations High Commissioner for Refugees —the international organisation meant to focus directly on this population—is struggling to adapt to this new paradigm. UNHCR is not present in urban areas, even though that’s where many refugees are . Take Turkey, which is host to more refugees than any other country in the world. UNHCR supports only about 10% of refugees in Turkey. Why? Simply because UNHCR is set up to support camps, whereas most refugees in Turkey are in what Betts calls “urban or peri-urban areas.”

So what are we to do? What can governments and aid organisations change to make these situations better? For one thing, all our assumptions should be checked. For instance, many refugees aren’t necessarily looking for permanent resettlement. A large number of Syrian refugees, for example, have tried to return to areas of conflict when their home regions appeared to quiet down. Indeed, when Canand’s Justin Trudeau offered a hand of welcome to refugees in the Gulf, his government targeted those in Lebanon and Jordan. Refugees were contacted by phone and SMS to ask if they wanted to resettle to Canada. 70% of those contacted declined. They preferred to stay close to their region of origin.

The refugees of today’s conflicts are distinct from those of the past. There’s a political implication here. Today, most countries have complex and differing notions of what separates a refugee from a voluntary migrant. The 1951 Refugee Convention that gave UNHCR its mandate doesn’t provide all the answers to today’s challenges. This could be updated to reflect more modern realities of the refugee experience.

And clarifying that refugee experience is critical. Sitting with many of these refugees, Betts found that a very small number are unemployed. Many, in fact, are self-employed. They have built their own forms of autonomy and have contributed to their host country’s economy at the same time. Even governments who are wary of allowing rights to work for refugees en masse might see the benefit of taking advantage of a skilled, available population of idle workers.

Could host country governments “help refugees help themselves”? By making the refugee environment as human as possible, governments can think of refugees as a resource, rather than as a burden. If host country governments are going to organise camps for refugees, and if many refugees do live in those camps, then at least governments should provide some physical connection to the rest of society. Some properly human, interactive environment for a micro-economy to thrive. That means offering rights to work when possible, even if only on a limited basis.

This is a complex problem, and Betts doesn’t claim to offer any simple solutions. Nor is he blind to the lessons of modern geopolitics that underscore the fact that the refugee crisis and the west’s new nationalism are intertwined. But that doesn’t mean that progress isn’t possible. The 65 million forcibly displaced people—and our own consciences—demand it.

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To find out more about Alexander Betts research and other publications head to www.alexanderbetts.com

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Winners Announced: The Global Challenge 2016

The Global Challenge offers participants a chance to learn more about an issue they care about, by researching what is fuelling the challenge and holding the status quo in place, what is already being done to try to solve the issue, as well as the gaps in the landscape of solutions. Entrants are then asked to compile the findings into an ecosystem map as well as a report and bibliography outlining their research. Winners are awarded cash prizes and tickets to the Skoll World Forum, with top teams also given the opportunity to apply for Apprenticing with a Problem funding. This funding provides students with the opportunity to go out into the world and ‘apprentice’ with issues the care about, through research projects, internships, or secondments, giving them opportunities to learn more about how they might use their careers to create positive change.

Saïd Business School offered the first Global Challenge this year, with leadership from the Skoll Centre and a partnership with Malaysia’s Sunway University, inviting students from two ends of the globe to partake in the inaugural challenge. After an initial problem assessment round with nearly 50 applicants, The Global Challenge received 23 final applications from individuals and teams across both Universities, and then nine teams were selected as semi-finalists to present to an esteemed panel of global judges.

The judging panel included Dr François Bonnici, Director at the Bertha Centre for Social Innovation and Entrepreneurship, Jane Leu, CEO and Founder of Smarter Good,  Jessamyn Shams-Lau, Executive Director at the Peery Foundation, Alexander Goodenough, Investment Director at Big Society Capital and Daniela Papi-Thornton of the Skoll Centre. The judges narrowed the cohort down to three finalists who presented to a public audience on 13th June.

The winners were announced that evening, and included an additional prize for Best Presentation decided by live audience vote. Papi-Thornton commented after the event: ‘We designed the Global Challenge and the Apprenticing with a Problem funding to support students to learn about and get involved in the global issues they care about. At the Skoll Centre we don’t think the only path to impact is by starting new ventures. We will feel successful in our work at the Centre if the students we work with go on to effect change as intrapreneurs, policy makers, thought leaders, or by plugging into any gap in the landscape of solutions for the issues they care about’.

[The Global Challenge] is such an important piece of preparation for students to become the change-makers the world needs!’ Shams-Lau also commented.

One purpose of this contest is to change the discourse around traditional business plan competitions. The Global Challenge team plans to open this contest up to partner universities around the world next year in the hope of influencing other universities to create funding and support for students to ‘apprentice with problems’. Papi-Thornton added, ‘By creating an award that encourages and celebrates an understanding of the existing landscape of solutions to a given challenge and helps students build upon the work of others before asking them to ‘solve’ problems they don’t yet understand, we hope to help more students build successful social impact careers.’

The Winners

First Prize
Maternal Depression
Anisha Gururaj, MSc in Global Governance, University of Oxford, 2016 and MSc in Evidence-based Social Intervention, University of Oxford, 2017; Ashley Pople, MSc in Economics for Development, University of Oxford, 2017

Second Prize
Fresh Produce Value Chain in Sierra Leone
Songqiao Yao, Kaspar Baumann, Ryan Chen-Wing – all MBA, Oxford Saïd, 2015-16; Julian Cottee, Researcher at Environmental Change Institute, University of Oxford

Third Prize (and the Best Presentation Award)
An Analysis of Gaps and Opportunities in Germany’s Refugee Integration System
Noura Ismail, Avinash Nanda, Karen Ng, Amrinder Singh – all MBA, Oxford Saïd, 2015-16

Culture Prize
Cultural Trauma and Resilience in the Pacific: Ho’owaiwai
Laura Taylor, MBA, Oxford Saïd, 2015-16

Honourary Mention
Urban Air Pollution in Kuala Lumpur
Seng Zhen Lee, BSc in Accounting and Finance, Sunway University Business School

All semi-finalist ecosystem maps and reports can now be found on The Global Challenge website.

Apprenticing with a Problem


Funding was awarded to six individuals and teams

Kaspar Baumann, Ryan Chen-Wing, Julian Cottee, Songqiao Yao
This team will travel to Sierra Leon and learn more about the barriers to success and opportunities for scale in fresh and canned produce distribution.

Noura Ismail, Avinash Nanda , Karen Ng, Amrinder Singh
The team will volunteer/research in Germany and learn more about the solutions landscape and gaps in the work addressing the refugee crisis.

Laura Taylor
Taylor will travel to New Zealand and intern with successful organisations working with Maori cultural preservation and economic empowerment, and then take that learning back to Hawaii to share with local organisations there.

Zweli Gwebityala, Melissa McCoy,  Allan-Roy Sekeitto
The funding will enable the team to spend the next 3+ months in South Africa testing assumptions about technical solutions to doctor scarcity, to learn more about the public healthcare system, and to map and understand the reasons other global telemedicine initiatives have succeeded or failed.

Alexandra Littaye
The funding will support Littaye’s follow up trip to Mexico to do further research on the state of milpa farmers and the potential for commercializing blue corn products and to spend a few months working with a successful agricultural product export company, likely in Ghana, to understand how their business works, the difficulties and barriers they have faced, and what lessons can be applied to a potential business model in Mexico.

Adrienne Yandell
Yandell will return to Jordan and spend 3+ months volunteering with a skills-training organization in the region, to understand their model, and see if/how it can be expanded.

Further reports will be created by the teams and individuals, so be sure to watch this space!

Determinants of Customer Payment Behaviours

Research Fellows, Aaron Krolikowski and Robert Hope of The Skoll Centre’s Small Grants Research Programme, have contributed to The Smith’s School of Enterprise and the Environment Water Programme by leading a focused research topic on determinants of customer payment behaviours.

Aaron Krolikowski writes for the Skoll Centre Blog, an introduction to the research paper.

Wards and Offices

Fig 1: Wards and Offices

Water customers in urban Africa often struggle to pay their monthly bills, so much so that an estimated 500m USD is lost annually to nonpayment. Due to an inability to pay or a reaction to unsatisfactory service provision, these losses contribute to critical gaps in financing and further reduce service reliability. Skoll Centre-funded research has found that the expansion of mobile money and other electronic payment options across East Africa may partially address this long-standing problem.

Pay Points

Fig 2: Pay Points

Using a unique dataset containing over 500,000 water payment transaction records from Dar es Salaam (Tanzania), researchers from the Water Programme at Oxford’s Smith School for Enterprise and Environment found that mobile payment systems are positively influencing customer payment behaviours. Water customers that integrated mobile payment systems into their payment practices paid water bills more frequently and made greater contributions to overall utility revenue when compared with those who only paid water bills at utility offices.

Mobile Money

Fig 3: Mobile Money

Dar es Salaam’s water utility was the first in sub-Saharan Africa to offer customers mobile payment options. In 2009, a new business facilitated the integration of the utility’s billing system with mobile payment channels like M-PESA and Airtel Money. Focused on mobile payment aggregation, Selcom Wireless helped the water utility 1) expand physical payment locations beyond 14 brick-and-mortar payment offices to encompass over 2,000 wireless pay points scattered throughout the city at pharmacies, kiosks, and grocery stores; and 2) to enable bill payment from anywhere and at any time using mobile money.

Improvements to payment behaviour were most evident when customers used both water offices and mobile-enabled options. Distance matters as well; customers living far from water offices were more likely to use mobile money and pay points. For water utilities, or any public service provider, mobile payment options can support improvements in financial stability while simultaneously extending the reach of service delivery.

Payment Options

Fig 4: Payment Options

Diversification of the payment landscape enables the creation of new models of service provision and increases customer choice in where, how, and how much they pay. As populations around the world become more familiar with electronic payment options and other mobile-based innovations, new opportunities continue to emerge in the water sector. One example is from Nairobi (Kenya), where the city’s water and sewerage company partnered with social enterprise Wonderkid to provide SMS-based meter-reading (Jisomee Mita) and complaint lines (Maji Voice). Another initiative from Bengaluru (India) is NextDrop, which works with utility staff to alert customers to water provision schedules. Mobile innovations like these bring water utilities closer to customers, help to increase operational efficiencies, and improve revenue collection; all of these are necessary if universal and equitable access to water services will be achieved by 2030 (Sustainable Development Goal 6.1).

Read or download the report here.