[Kictanet] Fw: Final Reminder: Invitation to BusinessXchange Forum - Tuesday 31st October 2006.

[waudo at signet.co.ke]

Thanks Bw PS. This sounds very innovative and perhaps the kind of services
that would suit many Kenyans. Certainly m-pesa also needs to be
congratulated for their innovation. Does anyone know their contacts?

Kind Regards
Waudo Siganga
Chairman
The Computer Society of Kenya



On Sun, November 5, 2006 5:47 am, bitange at jambo.co.ke wrote:
> Dear All,
> Do you see opportunities in the Economist article below:
>
> Ndemo.
>
>
> Phoney finance - Mobile telephony and banking
>
> 875 words
>
> 28 October 2006
>
> The Economist
>
> ECN
>
> 381
>
> English
>
> (c) The Economist Newspaper Limited, London 2006. All rights reserved
>
> Banking the unbanked, by mobile phone
>
> Most South Africans do not have bank accounts. But most do have mobile
> phones
>
> LIFE is now easier for Andile Mbatha, who owns a hair salon in Soweto.
> Gone are his days of trekking to his bank, which could take two hours by
> minibus, to send money to relatives. Nor does he keep piles of cash in his
> salon any more. Last year, he opened a bank account with Wizzit, an
> innovative provider of financial services. He now sends money to his
> sister in Cape Town whenever he wants, from wherever he wants, using a
> simple menu on his mobile phone. Half his customers no longer pay cash for
> their haircuts. They use their phones to move money from their accounts to
> his, in a few seconds. “This has taken out a lot of stress,” says Mr
> Mbatha.
>
> About half a million South Africans now use their mobile phones as a bank.
> Besides sending money to relatives and paying for goods, they can check
> balances, buy mobile airtime and settle utility bills. Traditional banks
> offer mobile banking as an added service to existing customers, most of
> whom are quite well off. But Wizzit, and to some extent First National
> Bank (FNB) and MTN Banking (a joint venture between Standard Bank and a
> mobile-phone network), are chasing another market: the 16m South Africans,
> over half of the adult population, with no bank account. Significantly,
> 30% of these people do have mobile phones. Wizzit hired and trained over
> 2,000 unemployed people, known as Wizzkids, to drum up business. It
> worked: eight out of ten Wizzit customers previously had no bank account
> and had never used an ATM.
>
> Mobile banking is just one example of a wider phenomenon in South Africa.
> With its odd mix of advanced capitalism and developing-world economics,
> the country is successfully luring people who hitherto dealt only in cash
> or barter to the world of formal finance. A simplified kind of account
> called Mzansi was launched in 2004 to reach the unbanked, and portable
> banks and ATMs have been rolled out in townships and in the countryside.
> To this fast-changing scene, mobile-phone banking looks to be a promising
> addition. Millions of South Africans send money to their relatives in
> other parts of the country. And most of these sums, which add up to about
> 12 billion rand ($1.5 billion) each year, still move informally.
>
> South Africa is not the first place to use mobile-phone banking: countries
> such as Japan, South Korea and the Philippines have had it for a while.
> But the potential is probably bigger in the developing world, and in
> countries in which migrants remit money to their families in relatively
> poor homelands. In Greece, a European Union member that is now awash with
> migrant labour, Albanians or Bulgarians often send money home by putting
> crumpled banknotes in the hands of a trusted compatriot, who takes a cut.
> If they could do it all by pressing buttons, they would.
>
> In most of Africa, meanwhile, only a fraction of people have bank
> accounts—but there is huge demand for cheap and convenient ways to send
> money and buy prepaid services such as airtime. Many Africans, having
> skipped landlines and jumped to mobiles, already use prepaid airtime as a
> way of transferring money.
>
> They could now leap from a world of cash to cellular banking. In Kenya, a
> pilot scheme called M-Pesa is being used to disburse and pay micro-loans
> by phone. Meanwhile Celpay, which FNB bought last year from Celtel, a
> mobile-phone company, is offering platforms for banks and phone companies
> in Zambia and Congo. In countries like Somalia, with chaotic conditions at
> home and a huge diaspora, cash transfers by phone would be a boon.
>
> For banks, persuading people not to use branches for simple transactions
> such as balance enquiries or transfers should reduce operating costs. So
> far, they charge the same for mobile as for traditional banking, though
> Wizzit says its services are at least a third cheaper than those of a
> traditional bank.
>
> But drawing the unbanked into the joys of cell-finance isn't always easy.
> Many think banking too expensive and complicated, and helping new
> customers become financially literate takes time. The technology remains
> clunky in some cases, with downloads requiring dozens of text messages.
> Several rival platforms are still in the fight, but so far those that
> emphasise simplicity and ease-of-use over state-of-the-art technology and
> security have made the greatest strides. A lot also hangs on putting in
> place the right laws and regulations. They need to be tight enough to
> protect vulnerable users and discourage money laundering, but open enough
> to allow innovative mobile banking to grow.
>
> If the transfer of money by mobile phone—between countries as well as
> within them—takes off, it could have implications far beyond the salons of
> Soweto. In 2005, according to the United Nations, global migrants remitted
> $232 billion, of which up to 20% was lost on the way, mostly in bank
> charges or fraud. If cellular transfers could slash that figure, mobile
> banking would prove to be a good call.
>
>
>
>
>
>
> --
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