Case studies, insights from some African projects

Simon Priollaud – Mobile Banking Manager

Frankfurt , 2013/07/04

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2013/07/04 – Frankfurt - Simon Priollaud

PlaNet Finance – Technical assistance to the financial sector

PlaNet Finance provides in-depth technical assistance to the whole ecosystem of microfinance including financial actors, public sectors, telecoms, private funders…

PlaNet Finance In 2012 ….

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2013/07/04 – Frankfurt - Simon Priollaud

PlaNet Finance Group

PlaNet Finance mainly intervenes in Africa, Asia, Latin America and relies on a strong network of five regional platforms: West and central Africa, Middle East & North Africa, South and East Africa and Latin America

2013/07/04 – Frankfurt - Simon Priollaud

Summary

Case studies

Implementation

1) Agent & loan repayment – Ivory Coast (2009 – 2010)

2) Interconnection with an e-wallet – Madagascar (2011 – 2012)

Studies

3) Business plan to develop a new MFI 100% on mobile – Eastern Africa (2013)

Global support

4) Tailoring ergonomics and marketing to the BOP segment – Morocco (2013)

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2013/07/04 – Frankfurt - Simon Priollaud

101 on Mobile Banking / Mobile Money

Transfers within a same bank

Use of Mobile Money products

“Do

it al

one”

“Do

it w

ith

them

”

“Do

it th

roug

h th

em”

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4

2 3

- Scenarios “Do it alone” and “Do it through them” allow the client to conduct transfers within accounts held at a same bank ( & )

- The scenario “do it with them” not only allow the client to use MM products ( ) but also gives him the opportunity to conduct transfers from his MM account to his bank account ( ) and vice versa

2013/07/04 – Frankfurt - Simon Priollaud

1) Agent & loan repayment – Ivory Coast(2009 – 2010)

Context- Commissioned by the Bill &

Melinda Gates Foundation- Mobile Money was becoming

more and more popular at this time in Western Africa

- Project took place in four countries

Description of the project- Integration of First Generation

mobile money services – agent (cash in / cash out & MM subscription)

- Development of second generation mobile money services : loan repayment interface using the e-wallet functionality of the bill payment.

Value proposition- For clients of the MFI

- Possibility to remotely repay a loan - For the MFI

- 1st Gen ; cross selling- 2nd Gen : Competitive advantage

towards competition- For the MNO

- Clients generating more revenue than “classical” clients

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Overview

2013/07/04 – Frankfurt - Simon Priollaud

1) Agent & loan repayment – Ivory Coast (2009 – 2010)

Snapshot – usage rate

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Key takeaways

- It is important to incentivize MFI’s staff who conducts transactions

- Training has to be delivered to all the staff (not only cashiers but also loan officers)

- Integration of mobile money with MFIs has impacts on multiple processes within the MFI

- Management performance System is important

- Important to tutor clients with “coaches”

2013/07/04 – Frankfurt - Simon Priollaud

2) Interconnection with an e-wallet – Madagascar (2011 – 2012)

Context- Funded by the MFI- Mobile Money is more and more

used by Malagasy people (urban)

- Development of a partnership with a MNO

Description of the project- Originality of the project is the

whole integration ;- possibility for the client to

repay and save - but also to credit his e-

wallet through his bank account

- Value added of all mobile money services

Value proposition- For clients of the MFI

- May earn interests - For the MFI

- Competitive advantage- Less affluence in branches

- For the MNO - Reduce churn- Raise ARPU

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Overview

2013/07/04 – Frankfurt - Simon Priollaud

Key takeaways

- Regulatory issues have to be carefully addressed with on-going dialogues with the regulation

- Technical developments are to be monitored with skilled IT experts

- Developing such an interface can be costly (link of e-wallets with MFI’s MIS)

- Other alternatives may also worth the shot (development of switches) if willingness to develop partnership with multiple Mobile Money Solutions

- Discussion between MNOs & MFIs take time as their interests in the short term are different

- ROI is not to be reached quickly

Snapshots – marketing & launch

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2) Interconnection with an e-wallet – Madagascar (2011 – 2012)

2013/07/04 – Frankfurt - Simon Priollaud

3) Business plan to develop a new MFI 100% on mobile Eastern Africa (2013)

Context- Funded by an hedge fund - Objective : to provide

selected microfinance services through a highly scalable model, supporting entrepreneurship, through a high technology approach.

Description of the project- Feasibility study to assess

supply and demand in this country in terms of financial services, mobile money & banking landscape, regulatory level

- Definition of scenarios

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- Individual loan to farmers on the basis of an intensive assessment by a loan officer- No specific consideration of the agricultural

sector or risks- Most commonly utilised model in Eastern

Africa & elsewhere

- Loans to different players in the same value chain- Manage risk through providing an integrated

solution beyond just finance with other stakeholders

- Tested approach but not widespread

- Loans to individuals on the basis of their cell phone utilisation and mobile money transaction history- No specific enterprise link or relationship- No existing model at retail level – current

examples exist for agent loans

Classical enterprise

lending

Value Chain

Finance

Mobile Scoring

“classical” model

Innovative model

2013/07/04 – Frankfurt - Simon Priollaud

3) Business plan to develop a new MFI 100% on mobile Eastern Africa (2013)

Snapshot – customer’s experience 2.0

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AnalysisCommittee Approval

Follow up CollectionsEvaluationPromotion

Loan Pre-Approval Loan Post- Approval

Promotion is done with traditional

means

SMS campaignsRely on intermediary)

Data collection is

done manually by loan officers

Tablets, PDAs, POS will gather data entered in a scorecard

Analysis is done by the loan officer

and supervisor

Data collected during the evaluation will be automatically evaluated

Holding of large

committees

Small committees

Loan officer visits

SMS Rely on intermediar

Clients go to branches

Clients may repay through their mobile phones.

Clas

sica

l m

icro

finan

ceIn

nova

tive

Mod

els

2013/07/04 – Frankfurt - Simon Priollaud

4) Tailoring ergonomics and marketing to the BOP segment – Morocco (2013)

Context- Most of mobile banking

operators do not test ergonomics before rolling it out

- Marketing is not often tailored to mobile banking the BoP segment.

Description of the project- Development of usability testing

sessions (ergonomics)- Organization of FGD during the

project to adapt marketing materials

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Key takeaways

- Marketing materials should be tested through FGD

- Tariff has to be included in the marketing leaflets

- It is important to indicate the steps the client has to follow

- A hotline appears to be an important need

- Important to reassure the client on

- What to do if he looses his mobile phone

- How to make sure that the transaction succeeded

2013/07/04 – Frankfurt - Simon Priollaud

4) Tailoring ergonomics and marketing to the BOP segment – Morocco (2013)

Snapshots - tested marketing materials

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Contacts

Simon PriollaudMobile Banking Managerspriollaud@planetfinance.org