Archives for category: Mobile Money

           Zimbabwe

Zimbabwe flag

Zimbabwe, formerly Rhodesia, was one of the last countries to gain its independence from colonial rule in 1980. Prior to independence Zimbabwe had a diversified economy, well developed infrastructure, and an advanced financial sector. It is now one of Africa’s poorest countries.

Harare_Zimbabwe_2010-5The current president, Robert Mugabe, has been in power during most of Zimbabwe’s short history. Mugabe’s time as leader of Zimbabwe has been controversial. Mugabe faces claims of human rights violations, corruption, and his economic policies have been questioned. The Mugabe administration redistributed commercial farms owned by non-black-African farmers to native Zimbabweans and many in the international community have also claimed he is racist to minority whites because of his “Indigenization” policies, which gave Black Zimbabweans the right to take over and control many foreign and white owned businesses.

Welcome to Zimbabwe

Mugabe recently gained a new term as president during heated elections in 2013. Leaders of the opposition party, the MDC, claimed that Mugabe and his party, the Zanu-PF, fraudulently stole the election even though results showed a landslide victory for the 91 year old Mugabe.

Business Environment

Zimbabwe has a population of over 13 million and English is the official language with multiple dialects being spoken throughout the country. Zimbabwe, like much of Africa, has a large youth population with 62% of the country under the age of 24.

Youth in ZimbabweZimbabwe remains one of the world’s least free economies. The labor market is one of the most restricted in the world, and business licensing forces most workers to seek employment in the informal sector. The violent seizure of land through the indigenization policy has underscored poor government land reform policies and upset investor confidence in a once-vibrant agricultural sector. Prior to the land reform Zimbabwe was a major tobacco producer and a bread basket for surrounding countries.

 Zimbabwe’s economy had a decade of contraction from 1998-2008 followed by hyperinflation in 2009. The country  was ravaged by hyperinflation, which officially reached 500 trillion per cent in 2008. The economy started to stabilize between years 2009-2012 but appears to be backsliding at this time.

Zimbabwe does not have its own currency and uses eight others as legal tender, with the US dollar and South African rand most commonly used. By 2009 the worthless Zimbabwe dollar was replaced by a multi-currency system based largely on the American dollar. The switch to the American dollar brought stability, but at a cost. As the dollar rises in value against other currencies in the region, such as South Africa’s rand, it makes Zimbabwean business less competitive.

Zimbabwe has a huge informal economy with unemployment as high as 95%. 80% of the population lives below the poverty line. Zimbabwe has its share of problems from political violence, human rights violations, land reforms, and an economic collapse but it also has hope and opportunity. Zimbabwe has one of Africa’s highest literacy rates at over 90%. The population is usually better educated than the African average, making the people one of the greatest assets of the country. It also has a growing telecommunications and mobile money industry.

Zimbabwe mobile market look

Zimbabwe has a mobile penetration rate of 104%. There are currently 13.5 million subscribers and the largest telecommunications company is Econet, with 9 million subscribers. There are over 5 million mobile data subscribers with 98% of those subscribers accessing the internet via their mobile device. The current internet penetration rate in Zimbabwe is 64%.

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Zimbabweans have very little confidence in their formal banking sector. A record number of banks have failed in the last decade. Apart from that, many account holders lost fortunes to the banking sector when the Zimbabwean economy crashed in 2009. Not a single penny of the Zimbabwean dollar value held by the banks was paid to account holders when the country changed over to the US dollar. The adoption of the US dollar has brought about its own headaches to the Zimbabwean economy. Major problems include illiquidity and the lack of small denominations. Getting change when transacting is therefore a problem. This kind of environment has favored the widespread use of mobile money –which is cashless.

Zimbabwe is one of nine countries in the world where more people use mobile money than have bank accounts. According to a study conducted by FBC Securities in October 2014, only 14% of Zimbabwe’s 13 million population have bank accounts (approximately 1.8 million Zimbabweans). The country’s three mobile network service providers (Econet, Telecel and Netone) dominate the mobile money sector. Econet through its EcoCash brand is by far the biggest mobile money service brand in Zimbabwe. EcoCash pioneered the service in the country and enjoys all the first mover advantages. It has made a significantly higher investment into brand and platform awareness than any other player allowing EcoCash to become a household name. Econet Wireless has 3 million registered users for its mobile money product and now accounts for about 20% of payments and purchases in Zimbabwe.

EcoCash, offering domestic P2P money transfer services, is just the first step towards a much bigger goal: becoming the dominant payment system in Zimbabwe for the banked and unbanked alike. EcoCash is currently targeting two pain points with major commercial opportunity: enabling retail payments to merchants and creating a bridge between the informal and formal sectors. To capitalize on these opportunities, EcoCash is building two important structures: a merchant acceptance network and full interoperability with Zimbabwe’s banks. EcoCash sees interoperability with banks as the key to linking Zimbabwe’s formal and informal economies. There is substantial demand for payment services between these sectors, with money flowing between banked and unbanked families, and between unbanked individuals and the formal sector in the form of retail payments, school fees, and utility bills.

The key regulators in Zimbabwe include The Reserve Bank of Zimbabwe for the financial sector and Postal and Telecommunication Regulatory Authority of Zimbabwe (POTRAZ) a telecommunication regulator for the communications sector. Regulation has lagged behind the technological innovations happening in the telecom/mobile money sector. Initially, the Post and Telecommunications board had oversight over the activities of the mobile network service providers but with the emergence of the mobile money –the central bank has also become involved. The responsibilities of the two regulatory authorities overlap and of late they have been fighting for turf at the expense of developing the mobile money sector.

City of HarareIn the last decade Zimbabwe has seen the worst and is hoping the future will be better. Things are still on the brink, as the current backsliding of the economy has shown, and many are confident things will change once Mugabe is no longer in power, which may happen soon considering his advanced age. There can be no question that certain policies, such as the land reform policy, have hurt the Zimbabwean economy and its people. The growth of the telecommunications and mobile money sector gives the country hope that it is turning a corner and that the future will truly be better than the recent past!

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Mobile Market Look: Tanzania

Tanzania

According to the Alliance for Financial Inclusion, mobile money accounts now outnumber bank accounts in nine African countries. Among them is the east African country of Tanzania – the next destination for MMIT’s Mobile Market Look series.


Tanzania is the second largest economy in east Africa and ranked the 6th most populous country in Africa, with just below 50 million people (2013). Although it remains one of the poorest countries in the world, the nation has a bright future with promising untapped potential. Mainly known for its gold exporting and tourism sector with Mount Kilimanjaro, the Serengeti, and the beaches of Zanzibar, the country has so much more to offer beneath the surface.

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Tanzania is growing at a faster rate then most of Sub-Sahara Africa. From 2001 to 2014 Sub-Sahara Africa has recorded annual GDP growth rates between 4% and 5%, while Tanzania has seen rates between 6% and 7%. Tanzania’s projected rates until 2017 are predicted to be 7% or higher annually. Over the years, Tanzania has transpired as a popular destination for Foreign Direct Investment (FDI) initiatives due to the political stability, location, and favorable investment regulations. The country has also been a major beneficiary of the Bill and Melina Gates foundation and continues to improve in areas of human development. Emerging industries that are increasingly gaining attention and more investment within the nation include agriculture, natural resources, transport, financial services, telecommunications, and our focus – mobile payments.

Mobile Money in Tanzania

MOBILE_PHONE-IMAGE-e1378131623527Although Kenya is the undisputed trendsetter when it comes to mobile money, Tanzania has been one of the fastest and most successful markets to adopt mobile payments systems. The first mobile payment product in Tanzania was the Kenyan mobile money transfer service M-Pesa, launched by Vodacom in 2008 just one year after its debut in Kenya.

As of last year, Tanzania surpassed Kenya in terms of transaction volumes to become the leading country for mobile payments. Tanzania has exceeded Kenya in terms of mobile money usage in 2013. According to a report by the GSMA, 44% of Tanzanian adults used some form of mobile money compared to 38% in Kenya.

The total value of transactions in 2013 was $17.7 billion (USD), which accounted for over half of Tanzania’s GDP at 54%. The number of mobile phone subscribers also continues to grow at an unprecedented rate. Mobile phone penetration was approaching 70% at the end of 2014 with an annual subscriber growth rate of over 20%. In 2014, about 55% of Tanzania’s mobile subscribers use mobile money services, with over 16 million registered mobile money users. According to the GSMA, over 11 million of these accounts are active within a 90-day period and providers are processing more than 99 million transactions per month valued at over 3 trillion TZS ($1.8 billion USD).

Tanzania mHealth 500Mobile money products within Tanzania are quickly evolving serving the population with new innovative ways to carry out transactions, some never before seen in any other market of the world. Transactions are moving beyond the traditional airtime top-ups and money transfer options offered by the likes of M-Pesa to offer more mobile money payment capabilities. Tanzanian consumers now have a plethora of mobile money payment options for salaries, bills, utilities, fuel, insurance, bus passes, micro-financing, healthcare, physical goods, and beyond.

One of the newest innovations is an interest-earning mobile money product. Customers receive quarterly interest for storing money on their mobiles, a similar concept to gaining interest in a bank account. Tanzania seems to be quickly emerging as a target market for companies to pilot new mobile innovations due to the success of mobile money and favorable market conditions. Examples of new mobile innovations targeting Tanzania outside of mobile money initiatives include Facebook’s internet.org, Tigo’s music streaming service, or Ex-Apple CEO, John Sculley’s Obi Mobile smart phone brand.

Why has Tanzania been so successful?

Nearly 6 years ago, Tanzania had one of the highest population percentages of financially excluded citizens. Lack of trust, understanding, and access to formal banking systems are just some of the reasons people are unbanked. Mobile phone ownership rates have grown rapidly in the country and the majority of the population have access to a mobile phone, creating a favorable environment for mobile payments. According to the InterMedia FITS (Financial Inclusion Tracker Survey) study in 2012, even among underprivileged households of rural, unbanked, and poor (living on less than $2 a day) – 50% of these families had access to a mobile phone and owned a SIM card.

The Central Bank of Tanzania (BoT) is openly supportive of mobile money usage and is actively engaging in related initiatives in moving Tanzania towards becoming a cashless society. The use of financial services has doubled in the past 5 years due to the mobile surge. The BoT’s goal was to increase the share of the population with access to financial services from 27% in 2009 to 50% in 2015. This goal was not only achieved but was also exceeded in 2013 at 54% – achieved 2 years earlier than planned. Tanzania has been recognized as one of the leading countries of Africa for demonstrating a favorable environment and policy for promoting financial inclusion.

The mobile money industry is regulated under structures that differ from typical financial services providers. Major players within the industry work together – the Tanzanian government, mobile network operators (MNOs), and financial services – in collaboration to develop a sustainable mobile money framework. Industry consolidation of MNOs occurred in 2011 into 2012 due to price wars and to prevent market saturation.

Tanzania’s mobile money ecosystem is ripe for interoperability and could be one of the first countries to fully capitalize on the benefits. The four largest MNOs – Airtel, Vodacom, Tigo, and Zantel, have established partnerships with the BoT and the two largest banks – CRDB Bank and National Microfinance Bank. The purpose of these partnerships is to craft regulations for the industry and as a first step in the direction of interoperability.        

What is the future of Mobile Money in Tanzania?

The absence of interoperability remains a major impediment within the mobile payment industry. Interoperability is the ability for different information technology systems and services to communicate and exchange data. Without it, consumers suffer from lack of flexibility and accessibility to a wider array of services. Customers may receive mobile money from a different service than what they currently have, which may force them to travel a considerable distance to set up a new mobile money account, wait in line, cash-out, and then have multiple mobile money options on their phones.

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It is estimated that 75% of Tanzanians live in rural areas, which presents a challenge for any agent network system within the country. Based on a FITS user survey many consumers have experienced issues with the current mobile money provider agents, mainly issues of inconsistency, insufficient e-float, absenteeism, or insufficient help with transactions. The easier the payment structure, the more likely they are to use it again or continue to use on a frequent basis; this will ultimately result in an increase in overall transaction volumes.

However, as commonly seen throughout Sub-Sahara Africa, many industry players refuse to open up doors to competitors – even if it could be to their benefit. Additionally, several country governments within Africa exercise forms of protectionism placing restraints on players within the mobile payments industry and their roles within the ecosystem.

The next initiative for the BoT is to find a way to link all of these mobile money users with formal banking institutions to drive up the percentage of the financially included. Tanzanians no longer need to invest their money in livestock or jewelry, but can store value on their phones and now start earning interest. Services within the market are still highly competitive and are constantly looking to introduce new mobile money options to grab a higher market share. Such innovations are benefiting consumers and changing life as they know it.

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Uganda- the Pearl of Africa

The next country we are visiting in our “Mobile Market Look” series is the East African country of Uganda. Uganda is a small landlocked country surrounded by the Sudan to the North, the Democratic Republic of Congo to the East, Kenya to the West, and Rwanda and Tanzania to the South. An English speaking country, with many local dialects also spoken, and a population of 37.5 million, Uganda has experienced a period of political stability and economic growth. Under the leadership of President Yoweri Museveni, who came into power in 1986, Uganda has seen steady economic growth and currently has a GDP of $21 Billion USD. GDP grew by 5.8% in 2014 with expected growth of 6.6% for 2014 and the economic prospects for this country are looking up.

Business and Economic Environment

Uganda is well endowed with natural resources and agriculture and fishing are two of the biggest industries in Uganda. Up to 80% of Ugandans are farmers and agribusiness is big. Uganda is among the leading producers of coffee and bananas. It is also a major producer of tea, cotton, tobacco, cereals, oilseeds, fresh and preserved fruit, vegetables and nuts, essential oils, orchids, flowers and silk.Kampala__Uganda

Uganda also has its own issues. With a weak infrastructure, lack of education, lack of training, high unemployment (as high as 62% amongst the youth), Uganda ranks 132nd on the World Bank’s Ease of Doing Business List out of 189 countries. The government is also facing an increasing threat from civil unrest. Protests commonly occur in Kampala and have turned violent although foreign interests are not generally targeted. There are moderate risks in areas of terrorism, health, crime, poor transportation infrastructure and Uganda is prone to flooding. Even with these challenges things are looking bright, especially in the area of mobile technology.

Uganda’s Mobile Landscape

Uganda has a young population, the second youngest in the World according to the World Bank. 70% of the population is under the age of 25 and mobile technology is their technology of choice. Uganda has 16 million mobile subscribers and most Ugandans own multiple phones to save money when calling different networks. Mobile providers do not offer contracts to consumers, so consumers purchase calling cards for a set amount of minutes or airtime. Uganda has a huge agency network of kiosks throughout the country where consumers can top up. Street hawkers also sell calling cards on the road, or side of the road, and Ugandans can purchase calling cards from even the remotest part of the country.MTN-mobile-money-customers

The mobile penetration rate in Uganda in 51%. Internet use is also growing as over 6 million people use the internet in Uganda, and of those 6 million people, 95% access the internet via their mobile device. Smartphones are not yet as prevalent in Uganda but Ugandans are still able to access social media via 2G and 3G technology. Ugandans use their phones to check social media, listen to the radio, and check news. Some of the most visited sites in Uganda are Facebook, Youtube, Twitter, Google, and Yahoo.

Mobile money and mobile banking are areas that have a lot of potential and have experienced major growth. Only 20% of the population is banked and 27 million Ugandans are unbanked due to poverty, bank fees, amount of documentation required to open an account, and travel costs. Mobile money has stepped in to meet the needs of this underserved part of the population. 68% of all mobile subscribers in Uganda are aware of and have used mobile money and mobile money applications. Mobile money transfers have grown from 87.5 million transactions in 2011 to 242 million at the end of 2012. The number of mobile money users has grown from 2.9 million in 2009 to over 17 million in 2014. There was an increase of 46% mobile money users from 2013 to 2014 and from June of 2013 to June of 2014 there were 445 million mobile money transactions valued at 22.2 Trillion Ugandan Shillings ($8.4B USD).

Ugandans prefer mobile money because it is a fast service and its’ accessible. Ugandans use mobile money not only to transfer money, but to pay water bills, school fees, and other utility payments such as Pay TV. Utility providers such as Umeme and National Water and Sewerage Corporation (NWSC) have partnered with mobile money service providers to ease payment systems and concentrate on their core businesses of power and water distribution.

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The list of current money transfer and mobile money providers include Airtel (Airtel Money), Africell, Uganda Telecomm (M-Sente), MCash, Yo!Payments , and WorldRemit. The biggest player in the market is MTN Uganda. MTN’s Mobile Money records 25,000 transactions per month and has a subscriber base of 8.8 million consumers.

Mobile money operators are doing well and to increase the levels of awareness for their services they have started to integrate with the banks. MTN joined a partnership with Crane Bank last year to offer MTN Mobile Money as a cash out ATM service. Other banks such as Centenary Bank and UBA (United Bank of Africa) have also gone into partnerships with MTN and other mobile money providers such as Airtel also have their own bank partnerships with financial institutions such as Equity Bank. Mobile money is continuing to grow and as technology and security becomes better will offer more value for their consumers. There is still room for value added services from the mobile money providers and financial institutions for the consumers, but overall the mobile technology space, especially mobile money and money transfers, is expanding and the future of this sector in Uganda is looking promising.

Please visit our “Mobile Market Look” series for Kenya, Nigeria, and Ghana

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This will be the first in our new series, “Mobile Market Look”, where we look at mobile markets in Africa and other emerging countries around the World. Kenya is one of the hotbeds in terms of mobile innovation and sophistication and we hope you enjoy this article and please feel free to leave any comments you may have.

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Africa has been growing at an unprecedented rate and Kenya is one of the fastest growing tech and mobile markets in the World. Known as “Savannah Silicon Valley”, Kenya is home to over 500 startups in the mobile and digital industries. Kenyans are extremely tech savvy and 70% of the population owns a mobile phone, with 16 million Kenyans accessing the internet through their phones. Nairobi, the capital of Kenya, is home to the ihubs, incubator space for the tech community that includes 10,000 members an over 150 incubator start-up companies. Companies such as Google, Intel, and Samsung have a presence in Nairobi and IBM set up its first African Innovation Lab in Kenya. If you are in the mobile or tech industry, whether as a company or an investor, Kenya is a country you should get to know and want to do business in.

Kenya is the most developed economy in East Africa with a good education system and a strong business environment. Kenya is a young country with 70% of the population of 44 million people under the age of 35. Kenya also has its issues as 50% of the population lives in poverty and unemployment, although officially listed as 10.5%, can be as high as 40%. There are obstacles, but there are also opportunities. And no opportunity is bigger in Kenya at this time than the mobile money and mobile payment market.

Kenya’s Mobile Market Landscape

Kenya phones Kenya has the most sophisticated mobile money ecosystem in Africa, and maybe the World. Infrastructure improvements, and lack of rigid regulations by the Central Bank of Kenya and the government, have led to market growth and an increase in digital services. M-Pesa, established by Safaricom in 2007, started the current mobile payment revolution and now transacts over $5 billion annually which accounts for 17% of Kenya’s GDP. Over 2 million mobile money transactions take place every day and according to MEF studies mobile money and mobile payments still present the greatest opportunity for growth in Kenya. It is estimated that 85% of the population has used mobile money at some point and most Kenyans prefer mobile money to cash because of the ease of use and the safety. Most African nations are cash-based and people still carry large sums of cash on them, especially when they are sending money to relatives in remote parts of the country, so mobile money offers a safer and easier alternative. Kenya’s financial institutions have picked up on this and are jumping on the bandwagon and creating their own mobile money products. Equity Bank has its own M-Kesho mobile money product and I&M Bank has its own prepaid Safari Card available on the M-Pesa platform.

Even with growth and prosperity Kenya faces security issues and economic problems. There have recently been terrorist attacks on the Kenyan coast by Al-Shabaab, a Somali terrorist group associated with Al-Qaeda, and no one should forget the terrorist attacks that took place at the Westgate Mall in Nairobi over a year ago. The country has a high poverty rate and weak infrastructure and on the business side there is a lack of capital and belief and faith by investors towards the Kenyan market, and also the Sub-Saharan African market as a whole. Even the mobile market is experiencing its own issues. There is a current price war which has benefited the consumers by leading to decreased prices and more mobile subscriptions, but has created lean profit margins and less profitability for the mobile operators. There is also the concern of the dominance of Safaricom and M-Pesa who currently has the dominant mobile marketshare of 70%. Other mobile operators such as Airtel, Yu, and Orange have a presence but pale in comparison to Safaricom.ihub Kenya

Obstacles do exist, but even with these problems and many others the mobile industry in Kenya is experiencing good times. Mobile phone penetration is 78% in Kenya and Africa had an annual mobile growth rate of 82% between 2000 and 2013, highest in the World. There are currently 500 million mobile subscriptions in Africa and there is expected growth in subscriptions of 50% over the next 5 years. Kenyans have also taken to smart phone technology and 67% of all phones sold in Kenya are smartphones. Kenyans like to listen to music, play games, look for sports updates, and watch TV and video on their phones. They also like social media and Kenya has the second most Twitter users in Africa behind South Africa and the second most Facebook users in Africa behind Nigeria. So the promise and potential is bright and the opportunities for business and investment is maybe the best it has ever been. Kenya is definitely a place you should want to be!

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African SMEs and Entrepreneurs – the time is now!

Africa is quickly emerging as a top contender for business expansion in large company ventures. In many ways, Africa has been referred to as the “next Asia” with strong investment growth. After all, the continent is home to 7 of the 10 fastest growing economies in the world. The future has been looking much brighter for Africa, especially in the last decade where we have seen Africa’s GDP more than double.

According to EY’s recent attractiveness survey for 2014, Sub-Sahara Africa places in second place.  Three years ago in 2011 SSA was listed 3rd from last on the same list. This year, North America is the only region that ranks ahead of Africa in terms of investment attractiveness.

Growth within these nations not only provides incentive for foreign direct investment (FDI) from all over the world, but also more importantly provides immense opportunities for African entrepreneurs across the continent. EY also cites Intra-African investment and development as a major source of growth for the continent.

Inherently Africa has a high level of risk associated with business investment with many nations battle political instability, corruption, and problems associated with the lack of proper infrastructure. All of these factors contribute to the risk in conducting business in Africa which is eminently complex. In the past, such issues have resulted in the hesitation by global companies from exploring expansion into African nations. However in present day, it appears investors have been able to see beyond negative headlines of nations such as Nigeria, Kenya, and Sudan due to the market potential outweighing many of the risks.

Africa micro business While many large size multinational enterprises (MNEs) such as Nissan, H&M, and Burger King are making headlines for their decisions to expand into Africa for business ventures, the success behind these rapidly growing countries is largely due to SMEs, small and medium sized enterprises. Several MNEs have recently been attracted to the region due to significant improvements in regulatory, legal, and business systems. However, according to IFC and World Bank reports, over 90% of all businesses in Sub-Saharan Africa are SMEs. Aside from this, there is also the informal market of micro businesses that are largely unaccounted for.

With the exciting growth of the mobile phone industry, it presents a major opportunity for Sub Saharan companies to prosper. MMIT, Mobile Media Info Tech, a Nigerian software provider of mobile payments is an example of how Nigerian entrepreneurs and SMEs can benefit from the recent growth trends. With the significant increase in cell phone users, mobile opportunities are abundant. MMIT quickly entered the market by creating M-Wallet and M-Diaspora products.  These products allowed Nigerians to use their mobile phones to pay for products, acting as a mobile wallet, and our M-Diaspora product which allowed ex-pat Nigerians in the United States and United Kingdom to send money to friends and relatives in Nigeria. MMIT saw the opportunity and benefit of mobile payments, a technology that has revolutionized the African consumers’ lack of banking access and dependency on carrying cash.

With the overwhelming majority of the business landscape being SMEs, they are instrumental to the growth of the economy within the Sub-Saharan region. African SMEs growth and development helps create the desperately needed jobs within the formal economy which can ultimately boost economic growth and stability. Although things are looking up, reports of high unemployment rates in SSA, particularly among the youth, continues to plague the continent. The need for the creation of jobs and infrastructure is still in dire need to foster the current economic growth and to sustain it.  Therefore, it is imperative that they do not ignore these rising opportunities created by the economic growth of the past years.

Business in Africa is challenging and varies significantly from country to country which further adds to the degree of difficulty for foreign entrants. African companies have many advantages that they can capitalize especially in terms of market knowledge, understanding of consumer behavior, and realizing what innovations can revolutionize the African way of life. African companies partnering with foreign companies is another smart option for both sides of the spectrum as local African business are able to fill many of the gaps that large MNEs cannot always fill. With new economic developments and increasing incomes, consumers are demanding access to more goods more than ever before. African entrepreneurs and SMEs should seize the opportunities before the MNE’s flood gates open.

To follow MMIT please visit www.mmitonline.com and to subscribe to our monthly newsletter please contact us at newsletter@mmitonline.com


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New mobile payment product M-Iflo launched to minimize risks as it is of great concern in the African markets.

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MMIT in partnership with Bango, a leader in mobile payments, has officially launched a product called M-Iflo to revolutionize the security of mobile payment environment in Sub-Sahara Africa. The M-Iflo product provides a safe payment solution that enables online transactions for digital content, which will unlock many opportunities in the world of mobile payments for Africa.

Africa is rapidly becoming a mobile hot spot with many consumers’ displaying their natural ability to quickly adapt to new technologies introduced to the market. The product is tailored to the African market by directly addressing the concerns surrounding the safety of payments and reducing the risks of transactions, which remains a barrier to doing business for new entrants into African markets. As a result of merchants’ fears regarding the technological and political risks factors, Africa has in many ways been limited or excluded from many of the break through technologies within the areas of mobile commerce and mobile billing. Jide Akindele, CEO of MMIT commented on these issues explaining, “unfortunately corruption remains a substantial risk within the mobile money industry in Sub-Saharan Africa. This has resulted in a reluctance from the world’s app stores and mobile brands to engage the African market.”

M-Iflo essentially is an intermediary between mobile merchants and mobile wallet providers. The product acts as a payment verification portal that provides a secure way for mobile content providers to reach African markets. This enables consumers of mobile wallets to select their wallet provider as a form of payment at the check out page of the transacting website. M-Iflo additionally allows those without mobile wallets to buy content from major app stores by using a top up card that can be purchased at retail outlets. Upon purchase of the top up card, codes are provided for the customer to enter upon checkout of a merchant site to complete the transaction online.

M-Iflo minimizes associated risks with online transactions and allows merchants to be paid up front, thus creating a work around to the common complexities of conducting business in Africa. This addresses app stores and merchant concerns of payments being held up in one country based on bureaucracy, fraud, or changes in regulation. Bango CEO Ray Anderson said: “There’s a smartphone boom in Africa and a frustrated demand for digital content. App stores and other merchants have been waiting for the reassurance of M-Iflo, which limits the risk of doing business in Africa, and has been designed to suit the ‘cash up front’ instincts of the African market.”

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M-Iflo has already integrated with major mobile wallet providers in Africa, including Mobipay in Kenya, Stanbic IBTC Mobile Money in Nigeria, and is working to add more to the list of partners. Jide Akindele, CEO of MMIT stated, “Merchants in the western market are yearning for a suitable payment process platform that minimizes their risk in the African market. We believe that our M-Iflo platform gives our clients that capability to do so. We look forward to opening up access to content store owners that are looking at the African market via Bango and MMIT’s Mobile money payment processing platform.”

MMIT is looking forward to this summer as the product officially launches in Nigeria with Stanbic within the coming weeks followed by Kenya’s launch later this summer.


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Is your business is targeting the youth of Sub-Sahara Africa?  If not, then your business is missing out on the largest and fastest growing youth consumer market in the World.  According to a Mckinsey & Company study over 50% of Africans are under the age of 20 and over the next decade this group will grow faster than any other youth group in the World.

In 2013 Africans aged 16-34 accounted for 65% of the consumer spending in Sub-Sahara Africa, or SSA.  A quick profile of this youth consumer shows that they are online and tech savvy, image-conscious, prefer quality first, price second, are brand conscious, mobile, and they are digital.  And their digital technology of choice is the mobile phone.Image

Mobile Technology is the de facto technology of choice for the youth of Africa.  For this article I define the youth of Sub-Sahara Africa, SSA, as anyone between the ages of 14-34.  For this group the mobile phone is a passport to a flexible new world that is much desired.

Their mobile phone defines their status and distinguishes their place in society.  The more expensive your mobile device the richer you are, the cheaper your device, the poorer you are. Most young people initially buy low cost, low brand devices, such as Techno, or Huawei, but once they save up enough money they go for a more expensive, nicer looking phone.  Youth consumers in SSA are very brand and image conscious and their mobile device is proof of that.

Another key trend is mobile devices no longer just being phones.  Mobile devices have now become tablets, phablets, and phonblets.  SSA youth are using their mobile devices to view, store, and create mobile content. Even though more youth are using mobile devices daily, only 20% of a phone’s functionality is actually being used according to mobile tech industry analysts.  Of that 20% however, more than 70% of that usage is for communication (email, SMS, social networking, downloading games, music and video apps, etc.).

Internet access is also getting better and sites like Youtube and Facebook receive millions of visits and subscribers.  Texting is still prevalent and phones are used more often for texting than voice calls. However texting can now be broadly viewed as messaging. There is SMS and then there are data based free messaging services like Whatsapp, Ebuddy, and BBM that now actively compliment SMS.

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Mobile also provides privacy and control for SSA youth.  Having a phone allows them to keep information from the prying eyes of their parents and family.  According to an InMobi Report in 2012, 47% of Nigerian youth say they love their mobile device because it allows them to keep their information private.

SSA youth also keep their mobile devices on them at all times an according to an InMobi report.  Mobile provides SSA youth with “Found Time”.  Found Time is described as using your mobile device at any time, whether in the bathroom, on the bus, or on your bed to check-in to social networking sites such as Facebook, IRokoTV, etc.social media in Africa

For the business side mobile commerce exists but has not really become part of everyday culture.  Countries where mobile money is strong, such as Kenya and Tanzania, see more activity in regards to mobile commerce, but continent wide this phenomenon has not completely gained steam at this time.  I spoke with Dayo Adefila, CMO of MMIT in Nigeria, on why this current situation exists.  “My guess for why mobile commerce is so low in a majority of countries is the lack of a clear value Proposition.  Merchants are not advertising mobile money acceptance so end-users don’t want any issues with their money.  They basically avoid M-commerce sites.”

Understanding this demographic is vital to understanding the future of SSA.  The technology may change but the consumer habits of tomorrow are being formed today.  The traditional consumer patterns of the West and how companies approach these consumers does not apply to SSA.  The approach taken to reach and speak directly to these consumers is unique and local to SSA and it starts with mobile technology.

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When we think of the potential for a cashless society we tend to look at the developed World and markets such as the United States or Europe as the places most likely for this development.  Even with credit cards and smart phones being ubiquitous throughout these countries you would be wise to look to emerging markets as the potential birthplace of a future cashless society.

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Mobile technology is growing and more than 1.7 billion people have cell phones but no bank accounts in emerging and developing markets.  According to the GMSA in 2012 there were123 mobile-money deployments in emerging markets, with 84 of them originating within the last 3 years.  Mobile money has the ability to offer financial services to the unbanked and reach consumers in the remotest parts of the World.  Even with the potential there is still a long way to go and Nigeria is a great example of this.Image

One of the emerging countries leading the cashless society initiative is Nigeria.  The cashless initiative in Nigeria is in its early stages.  The Central Bank of Nigeria, or CBN, has estimated that it will cost over $930 million to invest in new POS terminals, ATM’s, and payment solutions by 2015 as part of its “Cash-Less Lagos Project”.  Recently the CBN announced 40 billion Naira per day is being transacted virtually and the bulk of these transactions are being conducted in Lagos.

Initially CBN was targeting a phased approach post-pilot in Lagos State and then moving to a second phase which CBN claimed would cover close to 90% of all financial transactions in the country.  Due to the success of the Lagos Pilot CBN decided to implement the cashless push nationwide.  One of the stumbling blocks was the lack of infrastructure to facilitate cashless transactions conveniently and relatively close to the population. Kim Fraser, COO of MMIT, commented on the problems with the pilot program in Nigeria.  “In the Lagos Pilot there were only 10,000 POS systems on the ground in Lagos State.   Today there are over 150,000 POS systems deployed. It is still a small number to cover a country as large as Nigeria.  In addition the CBN has also realized that the term “Cashless” was scaring a lot of people especially in a country where 80% of the population is unbanked. The new catch phrase that the CBN prefers is “Cashlite”. There is still a significant way to go even under the new mantra of Cashlite though CBN appears to be making progress”.

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The debate for a cashless society has its positives and negatives.  For financial institutions a positive development of a cashless society is its ability to reduce costs required to print money and increase its consumer base and services to include the non-banked of the emerging and developing World.  For consumers there is an ease for transactions and the prospect of no longer having to carry cash.  Carrying cash can be a major problem in emerging countries where the risk of being robbed is greater. There is also potential for less corruption and more transparency in a cashless society.

The negatives include the invasion of privacy; security and fraud, and the wide divergence in the experience of mobile money service providers around the world.  There are some obvious hurdles that are slowing the progress of a cashless society including the lack of infrastructure, scalability, and the sustainability of mobile financial services.  So what does this mean for telecom and financial institutions?  It means there exists opportunities for the continued development of new financial products and greater customer education for their products.  If the telecom providers and financial institutions can create a healthy relationship with each other and with their consumer bases there can be continued growth and success for mobile money and other cashless initiatives.

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Many western companies are aware of the growing mobile money market in Africa and are watching with great interest, some actively participating in this growing industry, to the success and failures of different business models in different regions and countries.  They are also paying close attention to the different players; governments, financial institutions, and telecommunication providers, in regards to regulation or lack of regulation within the mobile money industry.  MMIT operates in the mobile money space out of Nigeria and West Africa so we feel that we are in a position of knowledge and expertise to talk on this matter in a concrete way, and also in a way that can hopefully add value and substance to the mobile money industry as it grows and matures.

Nigeria is home to 170 million individuals living in a country the size of Texas.  70% of that 170 million are unbanked, which means they either do not have access to formal banking institutions and services or are not taking part of the formal banking institutions and services. Nigeria has been labeled the financial hub of the African continent and many are watching this market to see if Nigeria is able to mimic and evolve the mobile money space in West Africa and eventually all of Sub-Saharan Africa.  The Central Bank of Nigeria (CBN) is pushing for a cashless society in Nigeria which will limit the amount of cash being carried around the country. CBN is also currently licensing out mobile money licenses that will allow financial institutions and non-financial institutions (telecommunication providers and mobile money providers) to capture the unbanked populace in Nigeria.  This regulation of the mobile money sphere by CBN is seen as a blessing and also a curse.  For the people of Nigeria mobile money allows them to bank with ease and make transactional payments without restrictions regardless of their location to a banking outlet, the time factor of when the bank opens and closes, and they can perform transactions at any time of the day. The negative for the populace is the lack of agent networks (small kiosks in rural and heavily populated areas) to cater to the areas that banks are not located in. The consumer needs to be able to cash-in his or her physical money to virtual money and if there aren’t enough agent networks it defeats the whole purpose of mobile money and a cashless society.

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To counter this concern CBN has been pressing the financial institutions to increase their agent network to meet the needs and demands of the unbanked population and to decrease the use of cash as a payment option.  CBN also has been playing more of a role in the creation of the structure for the laws and regulations of the mobile money sphere to make sure it has some control over the industry.  The Central Bank fears that if it does not get involved it will not have an influence on the financial structure in Nigeria.  This has been a key issue in Kenya where the telecom company Safaricom has been able to build the M-Pesa platform and develop a monopoly on the mobile money industry and the financial banking industry of that country. CBN wants to avoid this and also apply a structure that will help the consumer but at the same time reduce cash that is circulating in the country.  Progress has been slow and to the naked eye it might seem as though CBN isn’t doing much.  You have to keep in mind that the mobile money industry is still in its infancy and government regulation is a new development for an industry that has seen little to no regulation since its birth.  MMIT believes that before the year is over you will see a significant change in the regulation and penetration of the mobile money industry led by CBN.

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Anthony Bushu is a Business Strategy, Marketing and Communication Consultant for MMIT a mobile software developer in Lagos, Nigeria.  Anthony has diverse experience in the mobile and telecommunications industries and has worked for telecommunication companies in the US, UK, and Africa.  Anthony can be reached on Twitter@anthonybushu or by email at Anthony.b@mmitonline.com.