Lessons and Insights of Providing Financial Services to the Underserved through Mobile

Transcription

1 Lessons and Insights of Providing Financial Services to the Underserved through Mobile CPSS-WB Retail Payments Forum 28 th February Miami, USA By Betty Mwangi GM Financial Services

2 M-PESA: A Global First! Capitalising on Mobile Technology to deepen access to Financial Services

3 M-PESA: Changing Lives: Research Facts! Per transaction customers save: 3 hours per transaction, ploughed back into economic productivity. US$ 3, spent mainly on food and savings. M-PESA provides greater convenience, speed and lower costs of transferring cash. Just-in-time payments to agricultural or remote areas leads to increased productivity. M-PESA has enhanced personal security as it reduces the need to carry physical cash. M-PESA provides financial security for women as it gives them an independent place to store and manage funds.

4 M-PESA: Changing Lives: Facts! Over 15.2 Million M-PESA customers conducting over 2 million transactions every day. M-PESA processes transaction worth USD 4.98 billion annually translating to 17% of Kenya s Gross Domestic Product.* Total cumulative money moved in P2P transactions from launch to date is KShs. 1.4 Trillion which is approximately KShs. 60 Billion per month. Compared to 1072 bank branches, there are over 35,000 mobile money agents in the country Over 90% of Mobile money transactions in Kenya are conducted through M-PESA About 95% of all financial transactions in Kenya are cash based. Of those that aren t cashbased, it is estimated that 70% of these are handled by Safaricom M-PESA** *Zimbambwe independent, Econet s EcoCash Vs Kenya s M-PESA, Oct 20, 2011 * CBK Governors remark at ICPAK Financial Services Conference, April 2011

5 Financial Access in Kenya Banks Adults with Access to Finance Banks Mobile Phones only Mobile Money only No Access to Finance or phones Adults without Access to Finance Mobile Phones only No Access to Finance or phones June 2006 Total Population Population 15yrs million 20.9 million March million 23.1 million *source: World bank estimates,2010

6 M-PESA: Driving the Agenda of Financial Inclusion M-PESA users have moved more than Ksh Billion (approximately $8 Billion) which is 22%.ofGDP. Providing the means to access financial services such as savings account/insurance cover/micro Credit/ Loans Introduction of lower bands and tariffs to meet the needs of our customers There has been a significant increase in the number of women using M-PESA. This has led to Financial Independence for the Kenyan Woman

7 Pilot National Launch Expansion of Functionality More Innovations / Initially for MFI Loan Repayment Branded as a money transfer service IIMT (from UK) Pay Bill, Bulk Payments, M-KESHO Customer driven needs

8 What is M-PESA used for? FSD 2010

9 Phenomenal Growth!

10 Mobile Money Market Share As at 31 st December 2011, the reported M-PESA Mobile Active customers are 15.2M 80% of Safaricom s subscriber base is registered for M-PESA. * Source: Kenya Assessment Report

11 Mobile Money agents 3,500 5,400 8,600 35,000 Over 35,500 M-PESA agents countrywide as at 30 th December 2011 Agents in diverse sectors such as Supermarkets, Banks, Fuel Stations, Pharmacies and Safaricom Dealers. * Source: Kenya Assessment Report

12 % Transaction Value * Source: Kenya Assessment Report

13 How has M-PESA managed to stay on top? Customer focus : M-PESA answers a need in the Kenyan Market Innovation/ continuous improvement Driving payments through Partnerships Driving partnerships with Banking and Micro Finance Institutions Continuous customer education on new products and services as well as Scam Education Regulatory Framework : An enabling regulatory body Pricing structure Communication that is well understood and easy to communicate Resources in the organization Staff members and management are key

14 Driving Innovation Through Partnerships

15 Partnerships with Corporate organizations Pay Bill Services (Customer to Business) Over 700 Pay Bill Partners Facilitating payment of regular & utility bills M-PESA to Bank Deposits & Withdrawals. Payroll and Salary Disbursements Payments of goods (Buy Goods)

16 Partnerships with Banks Partnered with over 17 local and international banks ATM Withdrawals Services Super Agency M-PESA Prepay Visa card topped up by M-PESA that allows you to withdraw at VISA enabled ATMs worldwide.

17 M-PESA Continuously Changing Lives

18 Social Focus Resettlement of post Election Violence IDPs National Famine Relief Fund Water Projects for arid/semi arid areas Gender Violence Recovery Programs Mater Heart Run Kenya for Kenyans initiative.

19 M-PESA making a Mark in Agriculture! Kilimo Salama Program (by UAP Insurance) Insuring farmers against crop failure Premium collection and settlements done via M-PESA Lay Away Program (by Kick Start International) Scheme allows farmers to save towards purchase of irrigation pumps Savings submitted via M-PESA

20 M-PESA and Education! M-PESA making a Mark in Education Repayment of Higher Education Loans. Payment of School Fees

21 Enhancing the Health of our People! Collection of Health Insurance premiums - National Health Insurance Fund (NHIF) and other HMOs Payment for In and Outpatient services at Hospitals M-PESA Grundfos LifeLink Clean & safe drinking water Reduction in water borne diseases

22 Key Success Factors for Launching an MMT Service! Agent Network Robust Platform Strong Mobile infrastructure Regulator Customer Education Costs relatively cheaper than the alternative Dedicated management Strong and Trusted Brand Cost of a money Transfer M-PESA Postapay Check Clearing EFT Ks 30 Ks150 Ks 100 Ks

23 Safaricom s relationship with the regulator CBK has oversight of M-PESA s work as a money transfer function of Safaricom. Establishes the legal and regulatory framework for payments CBK determines who can play in this space Safaricom maintains a cordial relationship which is non confrontational and inclusive. When coming up with regulations, CBK consults Safaricom as stakeholders and uses an inclusive approach. Proceeds of Crime & AML Act: M-PESA is a reporting institution for AML purposes and updates the regulator on the processes it engages to prevent and monitor AML

24 Challenges in setting up an MMT Service High Set up costs Initial infrastructure, agent recruitment and customers acquisition costs Customer Education KYC & AML managing compliance for a large customer base Recruiting and Managing Agent Network Maintaining quality agents Regulation

25 Future for Mobile Money? Entry by non MNO s Handset manufacturers/ non telcos/banks/ independent companies Independent solutions Mobile phone based MMT applications i.e. Java which are able to provide MMT Increased Regulation Increased innovation and increased players may lead to heavier regulation. Inter-operability Technical inter-operatability between service providers

26 THANK YOU THANK YOU