The document summarizes Ayodo Foundation's proposal to alleviate global poverty through increased financial inclusion and reduced remittance fees. Specifically, it proposes a model where migrant workers can transfer purchasing power, rather than cash, between countries using their mobile phones. This would allow recipients to access goods and services from participating local merchants. The goal is to divert a portion of the over $20 billion in annual remittance fees to better assist families and reduce poverty. A pilot program between Canada and the Philippines is suggested to demonstrate the concept.

1. A smart way to alleviate poverty
Ayodo Foundation
A Registered Non-profit Corporation

2. Financial services to reduce poverty?
“Yes, financial intermediary development reduces
income inequality by disproportionately boosting the
income of the poor and therefore reduces poverty”
The poor pay exorbitant fees for
financial services such as
remittances which erodes what little
income they do have.
Dilip Ratha
Poverty Trap

3. Empirical Evidence
“The average income of the poor in Brazil would have
grown 2% per annum instead of 0% annually over the
period 1960-1999 if Brazil has the same level of financial
intermediary development as Korea”
World Bank Policy Research Working Paper 3338, June 2004
2% per annum growth over three decades would
have lifted tens of millions of desperately poor
Brazilian out of abject poverty if only the country
had enjoyed better banking and financial
services.
Financial Inclusion

4. Target Demographic the Unbanked
middle ground
Eighty-five percent of the population of India are
unbanked. Equivalent numbers of people in the
lowest income quintile of even first world countries
are similarly disenfranchised (USA 30 million
unbanked). These people are subject to chronic
over payment for financial services from Payday
Loan companies and remittance firms.

5. Mobiles “the opportunity” for a reset!
Sometime in 2008 the number of persons with cell
phones exceeded the number without. By 2014 there
were more in-use cell phones than people on the
planet and by 2020 more than 90% of the world
population over six years old will be mobile
subscribers.
Cell phones 97/100 people
Bank Accounts 1.5/100 people

6. Ayodo’s Business Model
Systemic problems require systemic, ingrained, sustainable solutions.
If you want to change the world and world economies and businesses run on
capitalist principles, than build partnerships with for profit entities to
accomplish altruistic goals.

7. Collaboration
Ayodo Foundation can best enhance
financial inclusion by working with and
leveraging the infrastructure of private
sector financial service firms.

8. Service-Focus is Remittance
Ayodo’s goal is to reduce or eliminate remittance fees on money transfers from first to second
worlds.
Remittance is a growth industry, effecting 10% of the world’s population and growing at double
digit rates to exceed 1.5 billion transactions worth a cumulative $300 billion in 2006. (IFAD)
Remittance service fees vary from country to country but remain stubbornly high at more than
10% average.
Remittances flows are predicted to exceed $604 billion by 2011 (Boston Consulting Group) and
$1trillion by 2016 (GSMA)

9. Why focus on Remittance ?
•Remittance flows to developing countries is more than triple foreign aid (ODA) and
equal to or greater than foreign direct investment. (World Bank)
•Remittance-fees of $25 billion represent recurring annual cash flow which could be
directed towards feeding, clothing and educating the poor on a sustainable basis.
•Remittances have become a tool of economic development in the third world. For
example 20%-30% of the capital invested in micro-enterprise in Mexico is
remittance sourced. (Woodruff and Zanteno)

10. Critical Timing
Five years ago it would have been foolish, no actually impossible, to even attempt to
provide digital IP based tools for use in remote second world settings. Today there is
a global race to build infrastructure for “high speed universal internet” for everyone.
In one of the most remote inhabited places on
Earth, Parintins, a town on an island in the
Amazon River, Intel is installing wireless
broadband internet service as part of their 5 year
$5 billion “the world ahead program”
Google’s project Loon
Facebook’s Internet.org

11. Transfer Purchasing power
instead of cash

12. Kyrgyzstan ?

13. Ayodo Remittance settlement
(Transfer of Purchasing power)
Merchant Settlement ( Stellar.org)
Ayodo
Remittance account
Ayodo
Remittance account
Transaction DataTransaction Data
Yodo MerchantRural Banks or Yodo Merchant
Regular Yodopay
(Data exchange only)

14. Changing the World
"With the number of migrants worldwide now reaching almost 200 million, their
productivity and earnings are a powerful force for poverty reduction.
“Remittances, in particular, are an important way out of extreme poverty for
a large number of people. The challenge facing policymakers is to fully
achieve the potential economic benefits of migration, while managing the
associated social and political implications."
François Bourguignon, Senior Vice President and Chief Economist, The World Bank
Ayodo Foundation will work in conjunction with private sector
companies (Yodo) to offer highly leveraged non-profit remittance
services. Our target is to divert 5% of the more than $20 billion in
remittance fees to realize an additional $1 billion transfer directly to
recipients for the reduction of poverty.

15. Remittance fee costs OFWs P85b (January 17, 2006)
OVERSEAS Filipino workers (OFWs) are expected to spend as much
as $1.6 billion or P84.8 billion to pay for excessive “transaction
costs” on the estimated $11.8 billion worth of earnings that they will
be sending home this year, Cebu Rep. Eduardo Gullas said.
“This is a staggering amount that should be going to the pockets of the
families of OFWs, but is going to the coffers of remittance
handlers, mostly American and Philippine banks,” Gullas said.
“If we can just cut by 50 percent the fees that OFWs will be paying this
year, this will translate to $800 million in incremental remittances.
And this will have greater impact in terms of uplifting the standard
of living of Filipinos since the money will go directly to the pockets
of the families of our OFWs,” Gullas said.

16. • Objective:
Demonstrate core concept of end-to-end sharing of purchasing
power between Canada and the Philippines
• Partners:
“Yodo registered merchant” in two communities, one at each
end of a remittance channel.
• Participants:
Filipino migrant workers in Canada and their relatives back
home.
Pilot Project

17. What can I do?
• Similar names is not a co-incidence, success for
Ayodo is dependent upon the success of Yodo
the commercial infrastructure being leveraged.
• Get on Ayodo’s mailing list, spread the word and
support us when you can.
• Encourage local merchants to accept Yodopay.
Use Yodopay to make payments on your mobile.
Accepted Here

18. Contact
Ayodo Foundation is a registered
non-profit incorporated in Canada.
www.ayodo.org
Brian Doyle: brian.doyle@ayodo.org
Leslie Watson: leslie.watson@ayodo.org