Mobile Money without borders!

The East African Community (EAC) is working on creating a platform that will enable her population to send and receive money within and across boarders of the community countries. This was revealed by Godfrey Kyama the e-banking advisor to the Commonwealth, during a presentation at Tech4Africa Conference in Nairobi, Kenya. He said the platform will be ready in about a year's time. This platform will enable easy money transfer and therefore lessen the cost of doing business in the region. People will also be able to pay for goods and services from wherever they are in the region. The central banks will be responsible for approving the exchange rates that will be used. This is good news for developers and financial institutions trying to expand across the region, and definitely a winner for customers who are looking for something that can solve their financial challenges.

What financial inclusion means

This story of constance gives us a glimpse into what financial inclusion means for her and the 2.5 billion people across the world that are financially excluded. At enjuba Credit, we seek to be part of the solution, providing such services as savings accounts (real savings accounts) through the mobile phone - so the bank is in your hands, credit services, cash when it is needed for both individuals and businesses as well as insurance as buffer in case of uncertainties.

Mobile Savings hit Tshs 1b (USD 700,000) in Tanzania

BiztechAfrica: Three weeks into the launch of M-Pawa, over 250,000 Tanzanians have registered for the service with over 50,000 customers making a total saving of Tshs1.2 billion. M-Pawa is the result of a partnership between the Commercial Bank of Africa and M-Pesa, which is already a successful mobile banking concept in the world. Vodacom Tanzania’s Managing Director Rene Meza says the product, primarily aimed at the people at the bottom of the pyramid, has made it possible for Tanzanians who do not have bank accounts to save their money safely, at a competitive interest rate and to borrow money from the comfort of their homes. M-Pawa’s menu also allows customers to save from as little as Tshs 1 and to borrow money depending on their savings and credit history. Depositing and withdrawing money on M-Pesa is free. “Just like we have seen M-Pesa allow a lot more Tanzanians to be active in the economy, we believe M-Pawa will provide Tanzanians with the confidence to save their money in a more secure way and also allow them to earn interest for their savings,” adds Meza. “This great partnership allowed us to introduce this product in Tanzania in a relatively short time. We are fully committed to making this product a success and in the process continue with our transformational journey in the telecommunications industry, empowering more and more Tanzanians,” says Meza. Customers can sign up for M-Pawa by accessing the M-Pesa menu on their phone, selecting M-Pawa and then choose between saving, withdrawing or taking out a loan. For a subscriber to qualify for a loan, they need to be have used M -PESA for at least 6 months and have a saving history on M-Pawa. Launching the service in Dar es Salaam recently, President Jakaya Mrisho Kikwete said the launch of M-Pawa highlights the success in reforms made in the country’s financial sector, coupled with heavy investment made by the mobile communication players.

14 million Ugandans using money with a transactions value of UGX 19 Trillion (USD7.6BN)

14 million Ugandans used the mobile money platform to trade, to send and receive money in 2013, making it one of the most used medium of transaction in Uganda. According to Bank of Uganda, the value of mobile money transactions jumped by 40% from UGX 11.7tn in 2012 to UGX 18.6tn in 2013, far more than Uganda's resource envelope for this financial year. In 2014/15 financial year, Uganda's economy is expected to run on a Shs 14tn purse. The number of Ugandans using mobile money increased by 52.4 per cent to 14 million, three and a half times more than the total bank accounts in the country. The number of transactions increased by 65 percent from 241.7 million transactions recorded in 2012 to 399.5 million transactions last year. The telecoms and banks have not taken these numbers lightly. The mobile money platform is now being used by different companies as a payment alternative. Air Uganda and Kenya Airways have their air tickets available for customers who can pay through mobile money. Multiplex Uganda allows those who own cars in Kampala to pay for the monthly parking fees through mobile money. You can pay a police fine via mobile money, in addition of course to such things as utility bills, digital tv, and tithe. Power distributor Umeme has advised its companies to use mobile phones to settle power bills. Other institutions, including churches, hospitals, pay TV companies, and kingdoms have mobile money codes for the people that make any contributions. Buganda kingdom used the platform widely during the fundraising for the reconstruction of the Kasubi tombs. Mobile money] is unstoppable because of the ease, convenience, and obviously the low cost associated with mobile money transactions. With the advent of this growth, the Central Bank is now regulating this mini industry to protect users and ensure fair play. This is a good direction but more progressive regulation as suggested in the 2014/15 budget speech is needed to take the country cashless and make this a major medium of transaction.

Barclays Bank Catching up with Mobile Money

Barclays Bank Uganda has entered into a partnership with Airtel Money (Airtel) to enable the bank customers make bulk payments for services. According to James Kinyany, the acting Barclays Managing Director, the solution will save their corporate clients, NGOs and insurance companies from carrying huge amounts of money to pay their services providers. “The solution will make it easier for insurance companies to settle claims, cooperative societies to disburse loans to members, companies to make payments of cash prizes to winners for the various consumer promotions and projects to disburse various funds to aid recipients. All will now be processed in secure environments authorized by the known account signatories through the Barclays online banking platform Barclays Integrator,” Kinyany said This continues to confirm our belief that the future of banking is mobile, especially in a country with one of the highest mobile penetrations on the continent. The banks are catchup up and trying to re-evaluate their business models to be able to address convenience, and of course the best way is to partner with mobile network operators, rather than trying to build their own networks. The challenge is that this product is only focusing on existing customers and the banks need to think more innovatively on how to include the financially excluded.

The future of Banking is Mobile

If the Kenyan success story of M-Shwari (Safaricom's microfinanace platform) is anything to go by, then their achievement of 7 million subscribers indicates that more and more people are interested in having the bank in their hands. Millions of people have access to a mobile phone and are using it in several ways, beyond making calls and sending text messages. Uganda has 12 million mobile money users and the possibility of what they can do with their phones is enormous. It is this insight that gives us at enjuba the strength to pursue a mission to disrupt banking on the African continent, by bringing the bank to you. We believe that in this 21st century, you should not be going to some buildings in towns and cities to save and withdraw your money, but instead should be able to do this wherever, whenever. Our launch of enjuba save (upcoming) will bring banking to you, in your hands and you will be able to save your hard earned money from anywhere, through your mobile phone. enjuba Save (eSave) aims to provide a reliable, secure and convenient banking platform on your basic mobile phone, so that regardless of your income, status or where you live, you can be able to open an account, and save as low as 500 shillings through your phone. This platform will go a long way in bridging the financial gap that exists at the base of the pyramid, accelerating financial inclusion for the 90% of Uganda's population that is not banked.