Posts Tagged 'banking'

Not money transfers, an agent network

Mike Quinn, my direct manager, just got back from Kenya where he spent some days seeing M-pesa—the world’s best mobile money network—in operation. Talking with him about what he saw, here are some thoughts that came to mind.

1. It’s all about a network of agents able to deal with both cash and electronic credit for all kinds of purposes. It’s not about selling airtime, not about sending money, not about paying bills. It’s about managing a whole network that works together to serve all kinds of financial needs that people have.

2. There’s a lot of smart and experienced people out there when it comes to mobile money. It might be a young industry, but the experience that people gained in getting M-pesa off the ground was huge, and there’s plenty of other companies now competing in the same space. These experts can see three steps ahead of where we can.

3. There are many ideas and visions for mobile money, but the value is in what exists in fact. That is, the proof is in the pudding. Getting a workable model of an agent network up and running is tough work and the challenges likely vary a lot from place to place. The people working in our office everyday put in lot of time and effort without a clear road map to follow to eventual success. Improvisation and sweat and what we have to muster up every single day.

But when you finally reach Fort Chip, you can really see what a feat this all is. Just think: a whole network of agents able to provide dozens financial services to anyone off the street. It’s like a thousand different airports all in sync to allow anyone to travel around the world. It’s like a country-wide road and filling station network allowing anyone with a car to arrive anywhere.

It’s quite a feat to try and pull off.

A Cashless Africa

"How much should do you think I should deposit?"

"How much should do you think I should deposit?"

In three words, this describes the vision of Mobile Transactions. I’ve been with them for only a month and a half, but I already see this vision becoming real.

A large client of ours (and a part owner in our company) is Dunavant, a multinational cotton company. Their business model in Zambia uses a network of farmer-agents spread out across cotton growing areas. This network coordinates loans and provision of cotton inputs, and each of these farmer-agents are paid commission for their work.

Until now, this payment was done in cash: armed trucks, men with guns, and long driving distances up and down Zambia. Dunavant now wants to use our mobile money account technology instead. Farmer-agents would have an account on their phone, and Dunavant  would pay them in a single electronic financial transaction, just like sending an SMS. To collect their money the farmer-agents would go to any of our company’s agents, of which there are 70+ spread across all parts of Zambia.

But there was a surprise inside all of this. My Zambian co-worker Sydney and I were out training Dunavant’s farmer-agents about the idea of a mobile money account. As we spoke, and as they asked questions, the whole subject turned from how they would get paid from Dunavant to the possibilities that come with having a “bank” account.

“I can store my money on my phone? I don’t have to take it all out at once?”

Yes.

“How does it stay safe? I’ll have a secret PIN code so I’ll be the only who can access my money?”

Yes.

“You’re saying that I can deposit money as well? So if I sell my maize or soy beans I can go to an agent and deposit, for free?”

Yes.

“And what about the fees? Are there monthly fees? a minimum balance?”

No, the only recurring fee is K1,500 ($0.20) to withdraw money.

It quickly became clear that these were men, good farmers at that, who had never had a bank account, never had a place to store and save their money, and were now being offered exactly that.

All of this adds up to a little less cash, and a little more satisfaction, which is exactly what Mobile Transactions’ vision is all about.


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Working to include smallholder farmers in agricultural markets, we know there are no easy answers. This blog is a place to ask "What does it take to make it work?" and to share what we're seeing and learning.
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