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MTN's MoCash Savings Hit 83,000 Customers In 48 Hours
Bank of Africa (CBA) and MTN Uganda’s MoCash money saving and lending service has registered 83,000 customers.
Addressing the media in Kampala, CBA’s General Manager for New Business Ventures, Eric Murioki, revealed that as by close of business on Wednesday the MoCash platform had registered 83,000 new customers and counting.
The MoCash platform was launched by Vice President Edward Sekandi on Tuesday, making Uganda the third country in the world after Kenya and Tanzania to access the groundbreaking innovation that blends mobile telephony, mobile money and banking.
Murioki said their projection is that MoCash will reach 40 percent of the current seven million mobile money users within one year, 60 percent of users within two years and 70 to 75 percent of users within three years.
On concerns about the interest on loan of nine percent per month, Murioki said the rate is far better than other alternatives on the market, particularly money lenders. The savings attract five percent interest per annum.
CBA’s Chief Executive Officer, Samuel Odeke said their projection is to have a loan book of 21 billion Shillings and a savings book of 16 billion Shillings within a year. He said MoCash is real banking with a commercial bank regulated by the Bank of Uganda that has the capability to reach those not reached by the banks.
On potential fraud in the MoCash system, Odeke said the bank works round the clock to ensure it is foolproof, although he admitted that there will always be people trying to hack such a system.
He said in the nearly four years of the MoCash operation in Kenya and Tanzania, the system has been off for just 27 days, a feat he said is very rare with a technology based banking system.
Odeke said a risk like one being forced to reveal his PIN by, for instance robbers, is an external risk that is hard to fight. He said the best solution is for users to be careful with their PIN numbers.
MTN Uganda’s CEO, Wim Vanhelleputte, explained that they are providing the mobile money platform while CBA, a Kenyan bank, is doing the real banking.
In MoCash arrangement in Uganda, CBA will be responsible for operating capital, risks, balance sheet management and regulatory compliance while MTN will be responsible for the connection, communication, distribution and user interface.
Phrase Lubega, MTN Uganda’s General Manager for Mobile Financial Services, said the MTN mobile money platform has 2.8 million unique deposits every month and 2.9 million unique withdrawals each month. Overall in a month, there are about 10 million deposit and 11 million withdrawal transactions.
According to Lubega since the mobile money platform has so far been used for quick transactions, they now want to deepen savings via MoCash, adding that already some customers have been saving on the mobile money platform. He said already over 90 percent of mobile money customers have balances on their accounts.
The instant success of MoCash comes at a time when Parliament has asked the Minister of Finance to halt its operations until the framework is clear. MPs are fearful that the platform could pose a number of risks like disrupting of normal banking, fraud and money laundering.
In his explanation to the legislators, the State Minister for Planning, David Bahati, clarified that although MTN Uganda operates telephony services, the Bank of Uganda, which regulates banking has given MTN and Bank of Africa permission to offer banking services.
What you need to know about MoCash
The MoCash platform started in November 2012, nearly four years ago, in Kenya, where it has 18 million customers, before launching in Tanzania two years ago where it has over four million customers.
The system operates on the simplest of phones, like those going for 30,000 Shillings, with the interface similar to those used in mobile money platforms.
It operates a real bank account with Commercial Bank of Africa via the MTN mobile money platform. A user can transfer money from the mobile money wallet to and from the savings wallet at no cost.
Every end of month money saved on the platform generates interest of up to five percent depending on the amount saved and creditworthiness. You can save as little as 50 (Fifty) Shillings and that too will generate interest.
If you borrow money, you can repay it as fast as possible or up to a month. In case you fail to pay within the month, you can roll the loan to the second month. After that, if you fail you are deemed to have defaulted and your credit rating goes down to zero.
The loans attract interest of nine percent. They also charge a one-off fee which they say is for facilitation, but ideally it is an administrative charge.
If you pay the loan within a short time, you are entitled to another loan with the possibility of a higher amount.
One’s creditworthiness is assessed monthly. The higher the rating goes, the higher the amount of loan and the reverse is true.
In Kenya and Tanzania, about 67 percent of adult population is accessing loans via MoCash. By March 2016 the loans in Kenya amounted to are 914 million dollars while in Tanzania the volume of loans is 22 million dollars.
Overall in Kenya and Tanzania, total savings is 140 million dollars, equivalent to 473 billion Uganda Shillings.
In both Kenya and Tanzania in terms of demographics, the most number of customers are between the ages of 26 to 30, those typically under-served by formal banking institutions. Slightly, more men, 51 percent, compared 49 percent of women, are using MoCash.
Micro saving and lending is reputed to be the fasted financial market in the world.
To be eligible for MoCash, one has to be a registered MTN mobile money user; be 18 years and above, be an individual and not an entity like an association or business entity; must have been active mobile money user for the last six months.
A customer can also get almost instant loan ranging from as low as 3,000 Shillings to one million Shillings depending on the level of convergence of services like airtime, data and mobile money as well as credit worthiness.
SOURCE:BUSINESSGUIDEAFRICA
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