Mobile Money for the Unbanked

USAID Releases Mobile Financial Services Risk Matrix

Camilo Tellez — Thu, 29 Jul 2010 09:22:30 +0000

Mobile Financial Services offer significant opportunities for improving the efficiency of financial services by expanding access and lowering transaction costs. The explosive growth of use of mobile money has had the unintended benefit of increasing public involvement in the formal financial system, including expansion of savings accounts in the regulated financial intermediaries.

Given that there is no common standard for the enabling environment, different regulators have responded in different ways, leading to a proliferation of inconsistent operating environments for account providers, and in some cases, limitations on the range of services that can be provided based on factors other than the underlying risks. Due to this lack of consistency, the US Agency for International Development (USAID) felt that it could play a catalytic role in helping to harmonize legal and regulatory environments for mobile financial services and undertook a detailed analysis of the various risks involved in the different models of mobile financial services, as viewed from each of the key stakeholders involved in these transactions. The research was undertaken in collaboration with Booz Allen, the Kenya School of Monetary Studies, the research and training arm of the Central Bank of Kenya, and involved discussions with various stakeholders around the globe including the GSMA and CGAP.

The analysis produced consists of three parts:

1) The Mobile Financial Services Risk Matrix.

2) Transaction flow mapping of some of the key transactions to show where these risks occur, and how these may differ depending on the service model.

3) Analysis of how various jurisdictions have already responded to these risks.

This analysis is not intended to be all inclusive or prescriptive. Indeed, this would not have been possible since the topic of mobile banking is a rapidly evolving issue.

USAID sees this matrix as a living document that will undergo modification as our collective understanding of the risk factors and responses to these risk factors continues to develop. We invite you to participate in this process by commenting and providing us with any material feedback that you believe would improve its contribution to the development of a sound, balanced regulatory framework for mobile financial services.

Mobile Financial Services Risk Matrix 100723

Comments/suggestions should be sent to Mr. Jeffrey Jackson, Senior Private Sector Advisor, USAID at jejackson@usaid.gov

Mobile Money Terminology

Neil Davidson — Tue, 13 Jul 2010 16:46:22 +0000

To welcome newcomers to mobile money, to facilitate effective dialogue among industry participants, and to communicate with the public and other stakeholders, the mobile money for the unbanked programme is today releasing a set of definitions of mobile money terminology.

In drafting these definitions, we have sought to reflect the most common usage of these terms, rather than advocating for meanings that we prefer. Therefore, in a few cases, we have listed multiple definitions for terms that are commonly used to mean more than one thing. We will be embedding these definitions into the fabric of this blog: you will be able to hover over any term that is underlined twice to see our definition. There is also a printable PDF version of the definitions below.

Finally, you may find as you peruse these definitions that you think you can improve upon our efforts: you may do so at the Mobile Money Information Exchange, where a wiki has been set up to allow users to make modifications to the definitions and to add new ones.

We look forward to hearing your feedback, either on the wiki or in the comments section of this post.

Mobile Money Definitions_no marks_

Mobile World Live 2010: Untapped Areas of Growth and Opportunities for Mobile Money

Camilo Tellez — Mon, 28 Jun 2010 15:53:02 +0000

Entering a new market touches every part of a company’s strategy; from technology, marketing, and customer service to product offerings, pricing and distribution channels. In the following two presentations, Olga Morawczynski from AppLab (Grameen Foundation) and Daryl Collins from Bankable Frontiers and Author of Portfolios of the Poor discuss ways to build on the basic mobile money proposition by understanding the unbanked customer’s needs.

Olga Morawczynski - AppLab Uganda

Daryl Collins, Author of Portfolios of the Poor

Mobile operators’ strengths lie in their understanding of their customers across their different markets as well as in their enormous economies of scale. During these two speeches at MMS 2010, Gavin Krugel, Former Director of the MMU Programme and George Held from Zain discuss some of the opportunities and challenges in deploying Mobile Money services with particular attention paid to partnership strategies. Their panel addressed the issues to consider when choosing and negotiating initial partnerships with other companies and how to strengthen these relationships as the ecosystem matures.

Gavin Krugel, Director GSMA

George Held, Zain

The presentations from the main MMS event can be downloaded here

Methodology for Assessing Money Laundering and Terrorist Financing Risks

Camilo Tellez — Tue, 15 Jun 2010 15:38:09 +0000

Mobile money services are emerging all over the world and financial regulators are unfamiliar with the money laundering and terrorist financing (ML/TF) risks arising from these new services. The current anti-money laundering and combating the financing of terrorism (AML/CFT) rules are often applied disproportionately to the risks involved, thus hampering the adoption of mobile money services amongst consumers, the poor in particular. It is, for example, disproportionate to put a high customer due diligence burden on very poor customers who are transacting very low amounts for legitimate reasons. Excessively strict ‘know your customer’ (KYC) rules can be impossible for the poor to comply with, keeping them locked into the informal economy without preventing ML/TF.

Proportionate rules ensure that AML/CFT rules are effective and that the benefits of mobile money services reach large parts of the unbanked population.

In the context of MMU, we believe that the time is right for a global discussion on how to apply rules aimed at preventing ML/TF through mobile money services proportionately. It is also important at the same time that regulators and industry alike develop as much awareness as possible about ML/TF risks at this early stage of service deployments so that any future risks can be anticipated and mitigated effectively.

Marina Solin and Andrew Zerzan have therefore published a ‘Methodology for Assessing Money Laundering and Terrorist Financing Risks’ which is based on the existing framework of Financial Action Task Force (FATF) recommendations.

AML

2010 Leadership Forum at MMS in Rio de Janeiro

Guest Blogger — Fri, 11 Jun 2010 16:15:27 +0000

The following is a guest post we’re pleased to share by David Colby Reed, a graduate student at NYU’s Wagner School of Public Policy.

Due to its timing at the end of the conference, the day-long Leadership Forum was a good venue for distilling some of the big-picture regulatory questions that emerged during the preceding sessions. Fairly quickly, Leadership Forum panelists and participants converged on three broad areas of consensus. First, high-quality, accountable agents are necessary for successful mobile money deployments. Second, proportionality in applying customer risk management rules is essential. Third, engagement with financial regulators is a critical success factor for mobile money deployments. The challenge in the Leadership Forum was to discuss just what these broad points meant at a more granular level.

Capitalizing on Agents

Agents act as first-line customer service representatives and provide vital cash-in/cash-out services in mobile money programs. However, most agents’ mobile money work is incidental to their primary jobs—they have other lines of business running shops, restaurants, and bars, and they’re not likely to provide high-quality service and float management if their work as mobile money agents distracts from their primary jobs or is insufficiently unprofitable. The nature of agents’ participation in mobile money offerings has many consequences for the service provider, but the major point of discussion at the Forum concerned agents and risk management: How do we create clear lines of accountability in agent-mediated mobile money offerings?

In several discussions, accountability was treated as a function of agent exclusivity—if an agent is exclusive to a given provider, that provider can be held liable for the agent’s activities. The provider, then, has a strong incentive to screen and monitor its agents for integrity, knowledge, and profitability. This approach makes sense for providing legal predictability and service quality, but it may create issues for mobile money service accessibility and interoperability between providers. In one scenario, certain geographies could become the exclusive domain of a given provider, the functional equivalent of Manhattan becoming Zain-only while Brooklyn becomes Safaricom’s turf. In another, certain remittance corridors like Delhi-Bihar or UK-Nigeria can become uncontestably aligned with a given mobile money provider and its agent network. Balancing the need for provider accountability with competitive markets for mobile money will be a likely future challenge.

Parsing “Proportionality” in KYC

There’s a perception of a trade-off between customer protection and AML-CFT rules on the one hand and financial inclusion on the other. unbanked customers tend to maintain low account balances and execute comparatively high volumes of transactions. In many cases, they will also lack official, permanent addresses and government-issued identification. The economics of account usage by the unbanked and the difficulty of verifying identities using standard practices often results in financial services that providers deem too onerous to administer, thus limiting the business case for extending mobile money services to the poor.

“Proportional” standards have been advocated as a means of reducing the cost of customer due diligence, but their implementation begs the question ”How far can you go in reducing KYC requirements?” Opinions varied from abandoning KYC for low risk accounts altogether to increasing the number of documents permitted for ID verification. Interestingly and perhaps a bit surprisingly, the World Bank and another international authority agreed that KYC is not always necessary if other controls are in place that make a service low risk. Uniform application of KYC rules was discussed as unnecessary in light of other risk mitigation tools. For instance, monitoring systems and account limits can be used to make mobile money a very low-risk service.

At the same time, it was noted that KYC is not solely conducted to meet regulatory requirements. Some mobile money providers mentioned that although the regulations are too stringent on KYC, they would still perform some KYC measures for their own commercial purposes.

Regulatory Partnership

There’s a fundamental, cultural difference between telecoms and banking regulators. Conference attendees agreed that mobile network operators, not typically accustomed to working with financial sector regulators, are sometimes frustrated by what they view as dilatory and overly cautious reactions of financial regulators to mobile money offerings. A large part of these divergent expectations can be traced to institutional mandates: telecoms regulators are charged with overseeing service provision, interoperability, and competition, whereas financial regulators are charged with overseeing systemic risk, price stability, and, in some contexts, full employment. These divergent mandates have created different cultures of risk tolerance and entrepreneurial speed at financial and telecoms regulators. MNOs often find this change in regulatory disposition jarring.

Because mobile money is a financial service, it must be administered by financial sector regulators—partnership is necessary, and a good provider-regulator partnership can reduce uncertainty and speed product development. Discussions of regulatory partnership at the Leadership Forum identified two key lessons for service providers’ partnerships with regulators. First, providers should explain the circumscribed nature of the products offered; mobile money services are typically limited to bill payment and money transfer services and are therefore less complicated than product offerings from banks. Because the deposits that secure e-money cannot typically be used for revenue-generating activities, e-money does not expand the money supply and exerts no inflationary influence. In the words of one participant, “mobile payments do not pose a systemic risk to the financial system like banking does.” Second, providers must work hard to clearly explain the low risk of mobile money services. Financial regulators’ uncertainty about the risk of mobile money offerings can lead them to assess risk in worst-case scenarios, as they often lack risk experience in this new domain. Candor can limit this impulse.

As I mention at the top of the post, each of these discussions was marked by broad agreement on principles and discussion of their operational translation. Next year, it’ll be interesting to learn about providers’ experiences with testing these interpretations of principles.

David Colby Reed specializes in financial services for the poor. David earned his B.A. in Psychology from Harvard University and M.A. in Public Policy at New York University.

MMU Working Group Presentations – Rio de Janeiro

Camilo Tellez — Wed, 09 Jun 2010 10:00:18 +0000

The MMU team is pleased to share the proceedings from our last working group held on May 24th in Rio. We have attached the presentations and descriptions from the various sessions. Please note that sessions 5 and 7 were panels and did not use any presentations.

Session 1: Update on MMU Programme – Seema Desai, Sr. Programme Manager, MMU

The MMU Programme is at its midpoint and running at full speed; this session offers an overview of what the programme has accomplished to date and what we still need to do to achieve our goal of reaching 20 million unbanked consumers with mobile money services by 2012.

Session 2: Regulatory Update – Andrew Zerzan, Regulatory Projects Director, MMU

There have been two deliverables since the last update: (1) a Q&A for regulators which maps out common misconceptions about mobile money and provides the corresponding responses from the industry (bank, MNO or payment system); (2) one-page summaries of AML/CFT, e-money and non-bank regulation. We explain what they are and how they are relevant to regulators.

Session 3: MMU Fund Grantee update

Since the MMU Fund was launched in February 2009, we have built a strong portfolio of 20 mobile money projects across the globe; this presentation provides a snapshot of each project and what the industry can expect to learn from them. It will also provide an opportunity to present and discuss the key learnings which have emerged from the project portfolio so far.

New MMU Grantees

Session 4: Key Lessons for Mobile Money – the Operators’ Perspective – Paul Leishman, Knowledge Manager, MMU

In the Annual Report from 2009, the MMU team issued a mobile money framework, mapping out the key elements of a successful mobile money deployment and highlighted some of the things which an operator would need to consider when building out each one. Over the last year, the MMU team has seen a number of deployments, and also a number of approaches to building each element, of which some have been successful and others less so. We will use this session to highlight the key things that we have seen operators get wrong with their mobile money service, and how to put them right.

Session 6: Four Lessons from the Gates’ Foundation’s Mobile Money Portfolio – Amolo Ng’weno and Dan Radcliffe, The Bill & Melinda Gates Foundation

The MMU Programme is entirely funded by the Bill and Melinda Gates Foundation. The Financial Services for the Poor (FSP) division of the Foundation has allocated a number of grants to other organisations who are also looking at ways of increasing access to financial services, in particular savings, across developing markets. In this session, the Foundation will share their top insights, from across their portfolio, into what makes a mobile money deployment successful.

Session 8: Beyond p2p Transfers – Zahir Khoja, Roshan & Koji Ono – Robi (Formerly known as Aktel)

Mobile money used to be synonymous with domestic P2P transfers – the “killer app” that propelled Safaricom’s M-PESA to such extraordinary success. Yet a number of mobile money platforms that mainly offer P2P transfers have struggled to attract users over the course of the last year. Of course, it’s difficult to isolate why this has happened – one possible explanation is that Kenya is atypical in the volume of remittances that flow within its borders. However, on a more positive note, we have seen operators begin to explore more seriously other services that users might value on the mobile money platform, such as bill payments, salary disbursement and other services. In this Panel, we hear from operators how they developed their value proposition and how they have positioned these services within the market.8.a

8.b

Session 9: Customer Insights into Mobile Phone Usage and Money – Dr Bill Maurer, Institute for Money, Tech. & Fin. Inclusion, University of California

Dr Bill Maurer provides a summary of his research into how customers at the base of the pyramid use their mobile phones to access financial services9.

Session 10: Customer Insights into Mobile Phone Usage in Ghana and Kenya – Peter Goldstein, Intermedia

InterMedia’s innovative AudienceScapes project, grant funded by the Bill & Melinda Gates Foundation, uses detailed, original survey data to test key assumptions about cell phone access and use, particularly in rural areas. The nationally representative survey data provides development organizations with highly specific user information that can be sliced and diced by a range of demographic factors. It provides key insights about various uses of mobile phones, particularly for mobile money, from a ground-up perspective. It also helps explain who is likely to use mobile money services and why, and who is not likely to use them.

10.

M-KESHO in Kenya

Guest Blogger — Thu, 27 May 2010 17:41:02 +0000

The following is a guest post we’re pleased to share by Ignacio Mas, Deputy Director in the Financial Services for the Poor program at the Bill & Melinda Gates Foundation.

A financial inclusion holy alliance in Kenya:

Equity Bank accounts riding on M-PESA rails

Finally, M-PESA is connecting with banks in Kenya. And with a big bang too, as two big players in the financial inclusion scene in Kenya are joining forces: Safaricom (the mobile operator behind M-PESA) and Equity Bank are launching M-KESHO, a co-branded suite of financial products that will ride on the M-PESA transactional ‘rails.’ Three years ago, there were 2.5 million bank accounts in Kenya, out of a population of 39 million. Today, there are close to 8 million bank accounts (of which 4.5 million are with Equity Bank) plus a further 9.5 million M-PESA accounts. One third of M-PESA accounts are held by people that are otherwise unbanked, and this is the segment that the new product is targeting. Equity’s aggressive objective is to acquire 3 million M-KESHO customers by the end of this year.

In late April, the Central Bank of Kenya issued new mobile money system, and then converting it back out again); in many instances, agents register new customers too. Agents usually earn commissions for performing these services.They also often provide front-line customer service—such as teaching new users how to initiate transactions on their phone. Typically, agents will conduct other kinds of business in addition to mobile money. The kinds of individuals or businesses that can serve as agents will sometimes be limited by regulation, but small-scale traders, microfinance institutions, chain stores, and bank branches serve as agents in some markets. Some industry participants prefer the terms merchant or retailer to describe this person or business to avoid certain legal connotations of the term agent as it is used in other industries.'>agent banking regulations which for the first time allowed banks to engage a wide range of retail outlets for transaction handling (cash in & out) and product promotion (receiving account applications, though applications must be approved by a bank staff). This paved the way for banks to begin utilizing the M-PESA platform and associated network of M-PESA outlets as a channel.

On March 18, in the presence of the President, Prime Minister and Ministers of Finance and Telecoms of Kenya, Safaricom and Equity Bank unveiled a full savings account issued by Equity Bank but marketed as an “M-PESA Equity account.” M-KESHO accounts are held in a server owned, hosted and operated by Equity Bank. Safaricom and Equity Bank jointly own the brand and logo. The first part of the logo takes after the M-PESA logo, while the second part has the brown color of Equity. ‘Kesho’ means ‘future’ in Kiswahili. So they are positioning this as an aspirational service than M-PESA, which is more functional. Equity Bank and Safaricom have developed a joint marketing plan with joint funding to market M-KESHO.

Like M-PESA accounts, M-KESHO accounts have no account opening fees, minimum balances or monthly charges. But unlike M-PESA accounts, M-KESHO accounts pay interest, do not have a limit on account balances, and are linked to limited emergency credit and insurance facilities. And unlike its regular Equity account holders who can only transact at the bank’s 140 branches, Equity’s M-KESHO customers will be able to transact at any of the 17,000 retail outlets that accept M-PESA.

M-KESHO customers must have an M-PESA account (and hence be a Safaricom customer). In addition, they may have a normal Equity Bank account and this can be linked to their M-KESHO bank account, but that is not required. Customers will be able to open accounts at either Equity Bank branches or at a subset of some 5000 M-PESA agents at which Equity Bank will place a bank representative. Customers must bring the original plus a photocopy of their ID and two photographs (at agent locations their picture will be taken on the spot with a digital camera). Customers complete a relatively short and simple application form (see attachment), but accounts won’t be active until 48 hours later.

M-KESHO is fully integrated into the M-PESA user interface on customers’ mobile phone, and is also accessible through Equity Bank’s own mobile banking service (available on JAVA or USSD). Customers can deposit and withdraw money from their M-KESHO account by transferring value to/from their M-PESA account, which they can in turn cash into or cash out from at any M-PESA outlet. Deposits into M-KESHO are free to the customer, whereas withdrawals incur a KSH 30 (40¢) payable to Equity Bank plus the normal KSH 25 (33¢) cash out fee payable to Safaricom.

Safaricom’ strength in the relationship comes from two main elements under its control. First, it has a channel of retail outlets that is 120 times more extensive than Equity Bank’s branch network. Kenyans are clearly keen on the convenience that M-PESA delivers, whereas Equity Bank is in danger of jeopardizing customer goodwill as its branches get more and more congested. Second, through its ownership of customers’ SIM cards, Safaricom can present a very convenient user interface which is an extension of the phone’s menu and a secure communications channel. Equity must use either an inferior user interface (e.g. USSD) or one that is operationally more cumbersome to deliver (e.g. JAVA).

Through their M-KESHO collaboration, Equity can enhance M-PESA’s value by driving more transactions. M-KESHO adds value to the M-PESA proposition (interest payable on saved balances, loan and insurance facilities available) and can therefore be expected to increase take-up and usage of the underlying M-PESA service as a transactional channel. Being a bank-backed, interest-bearing account, M-KESHO should also drive higher account balances than are currently stored in M-PESA. Moreover, the interest on float held on M-KESHO accounts can be appropriated by Equity Bank, which M-PESA could not do under its trust structure. Thus, simply transferring existing savings balances from M-PESA accounts to the new M-KESHO accounts increases the value accruing to the partners.

Safaricom is also connecting M-PESA with the accounts of other banks, enabling customers to cash in/out of their bank accounts through M-PESA. But Safaricom and Equity are going well beyond that, with product co-branding, use of select M-PESA agents to promote the bank’s products, and user interface integration.

The M-KESHO announcement has aroused much curiosity and excitement. It is big news because it creates an opportunity to offer a broader range of financial services seamlessly on the biggest mobile money platform in existence in the world. It also represents the marriage of two very powerful Kenyan brands that have relevance for the poor. Together, they can drive awareness and mass marketing of financial services on an unprecedented scale. Whether M-KESHO takes off will probably depend on several key factors:

• Marketing. Given that this is a jointly branded product, it’s possible that Safaricom and Equity Bank may promote in preference their own branded products rather than M-KESHO. It will be interesting to see how aggressive the partners promote the joint product.

• Sales & admin. Will Equity Bank’s sales staff and systems be able to sustain such an aggressive customer acquisition path?

• Customer convenience and pricing. Will customers see sufficient value in the new M-KESHO account to compensate for (i) the administrative trouble of moving money between their M-PESA or Equity Bank account and the new M-KESHO account, and (ii) the extra cost of withdrawing funds from the M-KESHO account?

• Credit scoring. How reliably will Equity Bank be in judging the creditworthiness of M-KESHO customers to provide them with on-demand credit? The quality of the credit scoring model will play a big role in determining the attractiveness and profitability of the product.

It’s interesting times in Kenya….

GSMA Publish 2010 Mobile Money for the Unbanked Annual Report

Camilo Tellez — Wed, 26 May 2010 00:52:54 +0000

Today the GSMA is publishing our 2010 mobile money for the unbanked Annual Report. With support from the Bill & Melinda Gates Foundation, the last year has been a busy one for our programme – and this report catalogues our key pieces of work, including a reference guide on how to build, incentivise and manage an agent network and detailed case studies on Zap, True Money and the Philippines.

In addition to these previously published resources, the annual report includes an update on the MMU Fund Portfolio, which now includes 19 grantees from Latin America, Africa and Asia. It also features two new articles, the first entitled ‘Bridges to Cash: the Retail End of M-PESA’ by Frederik Eijkman, Jake Kendall and Ignacio Mas. This paper presents an in-depth analysis of customer transaction behaviour and agent liquidity management activities through study of 20 M-PESA stores from the PEP Intermedius portfolio. The second featured paper was written by Andrew Zerzan and Marina Solin of GSMA and is entitled ‘Methodology for Assessing Money Laundering and Terrorist Financing Risks’.

AnnualReport2010 –

GSMA Announces Seven New Grant Recipients from the Mobile Money for the Unbanked Programme

Camilo Tellez — Tue, 25 May 2010 15:04:05 +0000

Rio de Janeiro: The GSMA announced the details of a further seven grantees from the mobile money for the unbanked (MMU) Fund, which is administered by the GSMA Foundation, Inc., with funding from the Bill and Melinda Gates Foundation. New grantees are Cellcard in Cambodia, Digicel in Fiji, Orange in West Africa, Safaricom in Kenya, Tata Indicom in India, Telenor in Pakistan, and Tigo in Africa.

“Just 15 months after we first announced the launch of the Mobile Money for the Unbanked Programme we are proud to announce that all funds have been committed in support of mobile money deployments across the globe,” said Gavin Krugel, Director GSMA. “Projects were chosen on their ability to deliver, speed of delivery, scale and sophistication. Between now and the end of 2011 millions of consumers are expected to directly benefit from mobile money services launched with the support of the Fund – that is 170 million customers at the base of the economic pyramid and who previously lacked access to financial services, from 19 operators in Latin America, Africa, and Asia.”

New Grantees:

Cambodia has a population of over 14.5 million, 22 per cent of whom live in urban areas, but less than 4 percent of the population has a bank account. In addition to this, the majority of payroll is given in cash and therefore Cellcard will be providing much needed financial services such as money transfer, bill payment and airtime top-up to working-class migrants who need to send money home to families in rural areas.

The objective of the grant to Digicel Fiji is to support the launch of a low-cost mobile wallet product which will allow Fijians better and easier access to commercial transactions and which can be delivered through Digicel’s existing distributor network. The pilot will launch remittance, top-up and bill payment services with the aim of extending to a full financial services offering following commercial launch.

Less than four per cent of the population of Western Africa (Cote d’Ivoire, Senegal and Mali) are banked, but over a third owns a mobile phone, and this number is growing 30 per cent each year. Orange is studying customer needs in each market, with the intention of building on existing mobile money services (Orange Money is already available in Senegal, Cote d’Ivoire, Mali and Madagascar) by introducing more advanced financial services.

Safaricom is using M-PESA, one of the world’s most successful mobile money platforms, to facilitate social transfer payments from Non-Governmental Organisations NGOs and the Kenyan government to vulnerable households in informal settlements in Nairobi.

Tata Teleservices is working with its technology partner mChek to target microfinance customers in rural India and particularly the large numbers of dairy, contract and agricultural workers. There are over 550 million mobile connections in India with year-on-year growth of 49 per cent, and research has shown that there are 91 million households who are currently financially excluded. mChek’s research has shown a clear need for cash management and money transfer services among customers who are not currently served by traditional banking services.

Easypaisa is an existing mobile money service successfully offered by Telenor Pakistan which brings financial services to the unbanked of Pakistan. With help from the MMU Fund grant, Telenor Pakistan is working to develop a sophisticated savings/insurance product which can be offered on top of the Easypaisa platform.

Finally Tigo is experimenting with innovative distribution channels for a new mobile money platform in one of its African markets.

Update of Grantee Progress:

Through grants from the MMU Fund, 11 projects have already begun offering innovative services and are developing the next generation of services to be offered on mobile money platforms, including social transfer payments, microinsurance and microfinance including savings products. In the course of the last year many of the grantees are already making a difference to their customers including:

• Bangladesh’s Grameenphone is working to enhance its mobile money service offerings (which were originally limited to bill payment) with, for example, a mobile ticketing service for Bangladesh Railways

• Dialog is expanding its mobile money offering into the northern provinces of Sri Lanka, which were, until last year’s settlement, wracked by war

• MTN Uganda has appointed hundreds of field registration agents to educate users about mobile money and to sign them up on the spot, a strategy that has to date generated 750,000 registrations

• Roshan’s M-Paisa has developed and delivered training for agents on how to sign up and serve M-Paisa customers; it has also run a large-scale marketing campaign to educate customers about the M-Paisa service

• In its Island Activation Project, SMART is extending the reach of SMART Money to remote islands that have limited access to financial services and are not priority areas for traditional financial institutions by partnering with MFIs and cooperatives

• Vodacom Tanzania is piloting an innovative approach to the common problem of agent liquidity: extending credit to master agents.

The MMU works with mobile operators, banks, microfinance institutions, government and development organizations to encourage the expansion of reliable and affordable mobile financial services to the unbanked. The MMU Fund exists to accelerate mobile money deployments which target base of the pyramid customers who are unbanked. Although the full original value of the MMU Fund has been allocated, the MMU is still accepting applications from operators around the world for initiatives which are exceptional in terms of scale or sophistication.

2010 Mobile Money Summit – Day 1: Mobile Money for the Unbanked Working Group

Camilo Tellez — Tue, 25 May 2010 05:45:03 +0000

Today, the beautiful city of Rio de Janeiro has been the host of the 5th mobile money for the unbanked Working Group. The MMU Programme is at its midpoint and since its inception in February 2009, we have not only built a strong grant portfolio of over 19 projects; but have also witnessed the emergence of approximately 147 mobile money deployments worldwide. In the past twelve months, the MMU programme has set itself a goal – to provide mobile money services to 20 million unbanked consumers by 2012. To stimulate deployments in countries where Mobile Money doesn’t already exist, to extend the reach of mobile money, particularly to low income consumers, and to increase the range of financial services offered via mobile, beyond payments.
These are some of the highlights from today’s session: Neil Davidson from the GSMA provided us with a snapshot of each MMU project and what the industry can expect to learn from them. Moreover, Paul Leishman expanded on last year’s mobile money framework, by mapping out the key elements of a successful mobile money deployment, highlighting some of the factors which operators need to consider when building out each one. This session highlighted the key things that we have seen operators get wrong with their mobile money service, and how to put them right.
In addition, in the last twelve months, a number of success stories have been announced where operators have signed up significant numbers of customers to a mobile money service; however, in order for a mobile money deployment to be sustainable, customers need to not only sign up, they need to become active users of the service. This is a challenge that a number of operators are facing right now – and Gabriel Ferreira from Oi Paggo (Brazil); Richard Mwami from MTN (Uganda); and Jose Crisanto Magno from SMART (Philippines) provided an opportunity to hear about their approaches to switching on the customers that they have acquired. Also, a selection of technology vendors, such as Fundamo, Sybase 365 and Gemalto, who have implemented mobile money platforms around the world, shared with us their insights. And the Bill and Belinda Gates Foundation, who are sponsors of our programme, shared with us their perspectives on what it takes to successfully scale up.
In terms of sophistication, we’re seeing an increase in the range of services being offered by mobile network operators. From salary payments – highlighted by the successful pilot by Roshan in Afghanistan, where a number of Afghan National Police officers receive their salary via M-Paisa, to Robi’s mRemittance service in Bangladesh. Furthermore, Peter Goldstein from InterMedia’s innovative AudienceScapes’ project, surveyed its detailed, original survey data to test key assumptions about cell phone access and use, particularly in rural areas and provided us with key insights about various uses of mobile phones, particularly for mobile money, from a ground-up perspective. Dr. Bill Maurer from the Institute for Money, Technology and Financial Inclusion at the University of California also explained from a sociological perspective how customers at the BOP use their mobile phones to access financial services
Tomorrow is the first official day of the 2010 Mobile Money Summit and we are looking forward to the exchange of more learnings and the display of new technologies in the world of mobile money.
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