I belive Safaricom, ministry infocom and fianance are already in dialogue on this one. having said that though, we need to acknowldge that the financial regulatory environment is rather complex and also subject to multiple regulator domains (consumer protection, payments systems, competition, E-commerce, etc) what we need is a regulatory and policy environment that is open to innovation. Some of the countries that have implemented "branchless banking" have also tended to minimize ICT regulation outside of the general commerce regulation. There are many relevant lessons for finance regulators to learn from communication regulators who are aiming at widespread interconnection for universal access alice ----- Original Message ----- From: "Eric Osiakwan" <eric@afrispa.org> To: <alice@apc.org> Sent: Sunday, November 05, 2006 12:54 PM Subject: Re: [Kictanet] Fw: Final Reminder: Invitation to BusinessXchangeForum - Tuesday 31st October 2006.
Alice, thats a possibility but am privy to much hesitation from the financial industry leadership that these guys dont have this license or that license and so why are they now providing financial services through technology. In some ways they right but in others it is just an expression of their inability to deploy such technologies and instead of them teaming up with the technology guys to roll the eminent African demon would show up again, stop them they are stealing our revenue like they did and are still doing when it comes to VoIP. Lets curtail that demon that tries to stop innovation and growth in Africa. Here is where Prof. Wilson QUAD model applied and the KICTANET example is most evident. The KICTANET Leadership should bring the various constituncies together and start working behind the scenes on how we can make these innovations work to provide banking for the unbanked without fighting and killing enterpreneurial spirit and national economic growth like we did in the days of VoIP.
Dr. Ndemo, i see the Ministry of Communication and Information preeping the Ministry of Finance and the Central Bank about this and creating room for dialogue with the other stakeholders to make this an excellent co-operation.
Eric here
On 5 Nov 2006, at 15:07, <alice@apc.org> wrote:
Our Safaricom we understand is about to roll out money transfer system using mobile phones. Will phone now turn into banking instruments setting pace for mobile commerce?
For people in rural where Bank branches with have high operational costs due to lack of infrastructure (Electricity is in short supply, as are safe, passable roads), are clearly not the solution. Yes this is where most potential micro finance patrons still live. If we are looking at ways to fill a need and to by pass infrastructure problems for bank branches, then the opportunities are abundant for mobile phone holders who are able to transact banking through their mobiles. Not to say that infrastructure is not important but that micro finance clients no longer have to wait. However, there are many challenges (policy and regulatory related) in forging these types of partnerships (mobiles and banking) and proving that mobile banking can work even in the most remote areas and protect vulnerable users...... alice
----- Original Message ----- From: <bitange@jambo.co.ke> To: <alice@apc.org> Sent: Sunday, November 05, 2006 1:47 PM Subject: Re: [Kictanet] Fw: Final Reminder: Invitation to BusinessXchange Forum - Tuesday 31st October 2006.
Dear All, Do you see opportunities in the Economist article below:
Ndemo.
Phoney finance - Mobile telephony and banking
875 words
28 October 2006
The Economist
ECN
381
English
(c) The Economist Newspaper Limited, London 2006. All rights reserved
Banking the unbanked, by mobile phone
Most South Africans do not have bank accounts. But most do have mobile phones
LIFE is now easier for Andile Mbatha, who owns a hair salon in Soweto. Gone are his days of trekking to his bank, which could take two hours by minibus, to send money to relatives. Nor does he keep piles of cash in his salon any more. Last year, he opened a bank account with Wizzit, an innovative provider of financial services. He now sends money to his sister in Cape Town whenever he wants, from wherever he wants, using a simple menu on his mobile phone. Half his customers no longer pay cash for their haircuts. They use their phones to move money from their accounts to his, in a few seconds. "This has taken out a lot of stress," says Mr Mbatha.
About half a million South Africans now use their mobile phones as a bank. Besides sending money to relatives and paying for goods, they can check balances, buy mobile airtime and settle utility bills. Traditional banks offer mobile banking as an added service to existing customers, most of whom are quite well off. But Wizzit, and to some extent First National Bank (FNB) and MTN Banking (a joint venture between Standard Bank and a mobile-phone network), are chasing another market: the 16m South Africans, over half of the adult population, with no bank account. Significantly, 30% of these people do have mobile phones. Wizzit hired and trained over 2,000 unemployed people, known as Wizzkids, to drum up business. It worked: eight out of ten Wizzit customers previously had no bank account and had never used an ATM.
Mobile banking is just one example of a wider phenomenon in South Africa. With its odd mix of advanced capitalism and developing-world economics, the country is successfully luring people who hitherto dealt only in cash or barter to the world of formal finance. A simplified kind of account called Mzansi was launched in 2004 to reach the unbanked, and portable banks and ATMs have been rolled out in townships and in the countryside. To this fast-changing scene, mobile-phone banking looks to be a promising addition. Millions of South Africans send money to their relatives in other parts of the country. And most of these sums, which add up to about 12 billion rand ($1.5 billion) each year, still move informally.
South Africa is not the first place to use mobile-phone banking: countries such as Japan, South Korea and the Philippines have had it for a while. But the potential is probably bigger in the developing world, and in countries in which migrants remit money to their families in relatively poor homelands. In Greece, a European Union member that is now awash with migrant labour, Albanians or Bulgarians often send money home by putting crumpled banknotes in the hands of a trusted compatriot, who takes a cut. If they could do it all by pressing buttons, they would.
In most of Africa, meanwhile, only a fraction of people have bank accounts-but there is huge demand for cheap and convenient ways to send money and buy prepaid services such as airtime. Many Africans, having skipped landlines and jumped to mobiles, already use prepaid airtime as a way of transferring money.
They could now leap from a world of cash to cellular banking. In Kenya, a pilot scheme called M-Pesa is being used to disburse and pay micro- loans by phone. Meanwhile Celpay, which FNB bought last year from Celtel, a mobile-phone company, is offering platforms for banks and phone companies in Zambia and Congo. In countries like Somalia, with chaotic conditions at home and a huge diaspora, cash transfers by phone would be a boon.
For banks, persuading people not to use branches for simple transactions such as balance enquiries or transfers should reduce operating costs. So far, they charge the same for mobile as for traditional banking, though Wizzit says its services are at least a third cheaper than those of a traditional bank.
But drawing the unbanked into the joys of cell-finance isn't always easy. Many think banking too expensive and complicated, and helping new customers become financially literate takes time. The technology remains clunky in some cases, with downloads requiring dozens of text messages. Several rival platforms are still in the fight, but so far those that emphasise simplicity and ease-of-use over state-of-the-art technology and security have made the greatest strides. A lot also hangs on putting in place the right laws and regulations. They need to be tight enough to protect vulnerable users and discourage money laundering, but open enough to allow innovative mobile banking to grow.
If the transfer of money by mobile phone-between countries as well as within them-takes off, it could have implications far beyond the salons of Soweto. In 2005, according to the United Nations, global migrants remitted $232 billion, of which up to 20% was lost on the way, mostly in bank charges or fraud. If cellular transfers could slash that figure, mobile banking would prove to be a good call.
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Eric M.K Osiakwan Executive Secretary AfrISPA (www.afrispa.org) Tel: + 233.21.258800 Fax: + 233.21.258811 Cell: + 233.244.386792 Handle: eosiakwan Snail Mail: Pmb 208, Accra-North Office: BusyInternet - 42 Ring Road Central, Accra-North Blog: http://blogs.law.harvard.edu/eric/ Slang: "Tomorrow Now"
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