Mobile Money Africa

Beatrice Wanja

Although the mobile money phenomenon is still young, the World Bank in Africa has labeled it a “cornerstone for development” because of its potential to mobilise remote rural economies. Already mobile phones have transformed the lives of people in developing countries hence the mobile money service could have an even bigger impact on these people and their small businesses.
By using mobile money services, millions are breaking a technology barrier that remains in Europe and the United States, and paving way to what could be the cash of the future. Mobile phones have evolved in a few years to become tools of economic em¬powerment.These phones compensate for inadequate in¬frastructure, such as bad roads and slow postal services, allowing information to move more freely, making markets more efficient and unleashing entrepreneurship.
According to Mr Elly Kamugisha, a trade and development expert, with mobile phones now so common placed, a new opportuni¬ty has been created for entrepreneurs especially in the SME sector to thrive via mobile money, which allows cash to travel as quickly as a text message. Entrepreneurs and development organisations are eagerly seizing the opportunity presented by such growth. They are creating mobile phone applications for profitable and nonprofit ventures across the board. Since mobile money transfer was launched in Uganda months ago, millions of people have embraced the innovation to better their businesses.
Among the many businesspeople who have taken advantage of the rapid telecom technological advancements to improve the efficiency in business running, is Mr Charles Mubiru a businessman dealing in fruits and groundnuts at Nakasero market. He buys all his fresh supplies upcountry and sometimes as far as Kenya. His business is five years old and Mr Mubiru says it (his business) is set for a revolution given the boost the business community has received from telecommunication companies, after the introduction of Money Transfer services. “I no longer need to carry money in the pocket or line up in banking halls to make transactions,” he says. “A phone dial is enough for me to transfer money to my upcountry agents who buy the fruits. I also pay my transporters through the phone.”
To make his business more efficient Mr Mubiru operates both MTN and Safaricom mobile money transfer services. “I use the two services because my suppliers in Kenya might need money urgently, which I have to send on time or my goods especially apples which are on high demand will be sold to my competitor who has ready cash,” he explains.
Mr Mubiru reloads his Safaricom Mpesa account every one week within Kampala or whenever he travels to Nairobi for his goods. He says that he cannot use the MTN account to pay his Kenyan suppliers because it is yet to start working across the border. The service has proven to be important and people particularly from the business sector have embraced it.
Mobile phones have evolved in a few years to become tools of economic em¬powerment.These phones compensate for inadequate in¬frastructure, such as bad roads and slow postal services, allowing information to move more freely, making markets more efficient and unleashing entrepreneurship.
A businessman dealing in matooke in Kampala for example, will have no need of travelling to the countryside to buy matooke. The only thing he needs is to use a phone to send money to an agent who can do that (buying) for him. This makes the product safe in this era when accidents and theft are rampant making travelling with loads of money risky.
MTN Publicist, Ms Sheila Kangwagye says the Mobile Money system is efficient in its self, and that is why it can manage to make transactions “in real time.” “It has a self audit system to track every single transaction,”
“Carrying out a transaction should take you under three minutes assuming you have money on your account, however, the Mobile Money platform is dependent on SMS and the network in general, so any interference in that area may affect its performance.”
Not only is the service fast, cheap and efficient, there is no limit in the number of transactions that need to be executed in a day. Mr Moses Kalungi, an MTN service agent along Kampala Road says that the service that is hardly half a year-old and it has registered success. He however says instances of network breakdown at times compel clients to wait for a little longer before making their transactions. To make business even simpler and more effective, plans are underway to turn mobile money into a global venture. As MTN’s Marketing Manager, Mr Isaac Nsereko revealed this development will only serve to widen the mobile money transfer market and also boost MTN’s presence in the market.
It is a faster, cheaper and safer way to transfer money than the alternatives, such as slow, costly transfers via banks and post offices, or handing an envelope of cash to a bus driver. Rather than spend a day travelling by bus to the nearest bank, recipients in rural areas can spend their time doing other things that add to their productivity. Mobile money also provides a stepping stone to formal fi¬nancial services for people who lack access to savings accounts, credit and insurance. Although for regula¬tory reasons mobile money accounts do not pay interest, the service is used by some people as a savings account.
Having even a small cushion of savings to fall back on allows people to deal with unexpected expenses, such as medical treatment, with¬out having to sell a cow or take a child out of school. Mobile banking is safer than storing wealth in the form of cattle (which can become diseased and die), in neighbourhoods savings schemes (which may be fraud¬ulent) or by stuffing banknotes into a mattress.
Mobile money presents a shining opportunity to start a sec¬ond wave of mobile-led development across the developing world. Operators, banks and regulators should seize it. According to Ms Winfrey Katto, a Zain agent in Wandegeya, carrying out a transaction comes with a cost depending on the amount one intends to send or withdraw. “Though we charge a fee for all transaction, many clients don’t mind because it is cheaper than using banking services,” Ms Katto explainsd. “Mobile handsets are in an excellent position to become the primary digital channel for providers of banking and related financial services in emerging markets,” Mr Kamugisha says.
The scope of the mobile money systems has grown quickly from simple cash transfers by text message to payments for everything from a salon visit to a utility bill, and it is possible to spend a day without carrying cash around.
Beyond simple profit, Mr Yesse Oenga, the Zain Uganda Managing Director says the real value of mobile cash to phone firms lies in securing a long-term connection with customers as cut-throat competition in the mobile market eats into revenues. “We see it as a tool to create stickiness,” Mr Oenga says. “Yes, it’s a revenue service but at the cost of an SMS, you’re not going to get rich quickly.”
The service has also allowed money to penetrate more easily into rural areas where it’s really needed. Ms Gemima Namubiru is someone whose life has become much more manageable because of mobile money. She is 70-years old and somehow manages to maintain her small family farm in Mbarara.
Like other people living off the land and a small number of livestock, she is dependent on money earned by a close relative, far away in an urban centre. A weekly SMS message from her daughter in Kampala negates what she used to experience – long delays and sometimes the non arrival of cash brought by relatives, friends or informal couriers.
Ms Namubiru is not in top form health but she can use her mobile phone walk to the nearest trading centre to cash in her SMS transfers at the local shop which acts as an agent for the service. Back in Kampala, her daughter, Irene, works as a lowly paid voluntary assistant for a HIV-Aids clinic and is relieved not to face the trouble and cost of the three-hour weekly bus journey to her mother’s home. “I used to send money with friends or relatives or sometimes anyone who I thought would be reliable,” she said. “But so often, money used to get stolen or lost.”