lessons and insights of providing financial services to...
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Lessons and Insights of Providing Financial Services to the Underserved through Mobile
CPSS-WB Retail Payments Forum
28th February – Miami, USA
By Betty Mwangi GM – Financial Services
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M-PESA: A Global First!
Capitalising on Mobile Technology to deepen access to Financial Services
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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.
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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 cash-based, 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
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Financial Access in Kenya
Mobile
Phones only
No Access to Finance or
phones
Banks
Mobile Phones only
No Access to Finance or phones
Mobile Money
only
Adults with Access to Finance
Adults without Access to
Finance
2006 2010
June 2006
Total Population 36.6 million
Population 15yrs+ 20.9 million
March 2010
40.4 million
23.1 million
Banks
*source: World bank estimates,2010
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M-PESA users have moved more than Ksh 727.8 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
M-PESA: Driving the Agenda of Financial Inclusion
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Pilot
2005 2006
Initially for MFI
Loan Repayment
National Launch
2007
Branded as a money transfer service
Expansion of Functionality
2008/2010
IIMT (from UK) Pay Bill, Bulk Payments, M-KESHO
More Innovations
2011
Customer driven needs
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What is M-PESA used for?
FSD 2010
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Phenomenal Growth!
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Mobile Money Market Share
As at 31st 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
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Mobile Money agents
35,000
8,600
3,500 5,400
Over 35,500 M-PESA agents countrywide as at 30th December 2011 Agents in diverse sectors such as Supermarkets, Banks, Fuel Stations, Pharmacies and Safaricom Dealers.
* Source: Kenya Assessment Report
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% Transaction Value
* Source: Kenya Assessment Report
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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
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Driving Innovation Through Partnerships
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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)
Partnerships with Corporate organizations
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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.
Partnerships with Banks
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M-PESA Continuously Changing Lives
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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.
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Lay Away Program (by Kick Start International) Scheme allows farmers to save towards
purchase of irrigation pumps Savings submitted via M-PESA
Kilimo Salama Program (by UAP Insurance) Insuring farmers against crop failure Premium collection and settlements
done via M-PESA
M-PESA making a Mark in Agriculture!
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Repayment of Higher Education Loans.
Payment of School Fees
M-PESA and Education! M-PESA making a Mark in Education
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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
Enhancing the Health of our People!
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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
M-PESA Postapay Check Clearing
EFT
Cost of a money Transfer
Ks 30 Ks150 Ks 100 Ks 50-300
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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
Safaricom’s relationship with the regulator
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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
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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
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THANK YOU THANK YOU