Revolutionising finance platform: Zimbabwe turns page in financial inclusion, empowering the unbanked and underbanked through mobile money
THE profound influence of the digital financial services revolution is increasingly sweeping across Africa’s economic landscape, thanks to the growing digital investments and adoption of technology, which brings on board millions of people who now rely on mobile money accounts to conduct different transactions.
1Money transfer Agent
Financial economists, with research backing, concur that globally, policy makers and business enterprises are increasingly embracing financial inclusion strategies to foster inclusive economic growth and social development.
Locally, the Reserve Bank of Zimbabwe (RBZ), as the custodian of the National Financial Inclusion Strategy (NFIS), has prioritised digital transformation as a critical pillar in the country’s economic transformation agenda.
The strategy provides a beacon of hope for achieving universal financial inclusion where innovative technological solutions and strategic partnerships play a key role in breaking down historic barriers that used to exclude the majority from the formal financial system.
Riding on expanded Internet connectivity and mobile phone subscription, Zimbabwe has recently recorded a jump in mobile money products as different players seek a share of the previously untapped business opportunity.
The mobile money drive involves key players such as EcoCash, One Money, InnBucks, Old Mutual’s O’mari, MyCash, TeleCash, GetCash, PayServe, ZimSwitch, Zipit, local banking institutions, as well as international payment players such as Visa and MasterCard.
Through online money platforms, ordinary people, including those in remote rural areas with no physical bank presence, are now able to send and receive money, pay bills and access other financial services with just a few clicks on their mobile devices.
Financial Inclusion, according to RBZ, is a key enabler to achieving Sustainable Development Goals (SDGs), which are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.
Doug Tait-Knight
To reflect more on these breakthroughs, Chronicle news editor, Prosper Ndlovu, (PN) conducted an in-depth interview with Mr Doug Tait-Knight, (DTK), chief executive officer for Mukuru Zimbabwe Financial Services who unpacked his organisation’s transformative journey and how it has embraced technology to enhance financial inclusion in Zimbabwe and across Africa. Below is the conversation.
PN: We note the recent bold steps being taken by Mukuru, previously known for its remittance services only but has now launched a mobile money wallet shortly after getting the Deposit Taking-Micro-Finance Licence. What is driving Mukuru to break this new ground?
DTK: This is a very exciting time for us, we have been awarded deposit taking institution finance licence. It’s not a small thing for us and we take this very seriously. As you mentioned, we come from a remittance background, and we have connected recipients for 20 years now. We have built up a lot of customer base and earned trust by delivering efficient services.
With that, we have a logical next step to invest further in this opportunity and deliver other services that can solve problems, add value, increase efficiency for customers across Zimbabwe and across our networks.
We already have wallet services outside of Zimbabwe. So, we are not new to the game but it is very new and exciting for us to be in Zimbabwe. We want to have 24/7 availability and assurance for our customers. Rather than spending money going to a booth, you can easily receive your money into your wallet and you can transact, buy airtime, buy electricity, or pay for DSTV, send to someone locally, or send internationally at reasonable rates.
PN: This is really exciting because in the past, people would look to get cash and queue for hours. Would they get the same going forward?
DTK: Yes, if you want it, cash will always be available. Sign up is very easy to do, that’s a five minute process and you just need your identity card. If you are receiving funds internationally, you can withdraw those funds at your convenience for no additional cost. Rather than queuing and getting all of your remittance and holding cash, which carries risk with it. Instead, you can withdraw what you need, save the rest or transact. I think that the offering is a lot more convenient than just the one option.
PN: Looking at this blended business model you have adopted, how do you see these interventions impacting on your local and regional financial footprint in the long run?
DTK: I think that our unique position is that we have a very broad customer base and we have worked extremely hard over the years to win and keep their trust. So, this is not going to change, we always want to be able to deliver products that are on demand.
I think that another big differentiator is that we have invested heavily in our network and presence, especially in rural settings. So, we want to be able to provide convenient service in any urban or rural setting and I think there is a larger opportunity where the rural areas might be more cash based. We want to further invest in our existing networks …and get out there on this financial inclusion promise.
Our current network is about 60 percent urban, 40 percent rural and we want to increase that so that we can cater to as much the market as we can. Obviously, we compete with the informal sector locally and globally, and we have to provide a service that is cost effective and as trustworthy and secure as it might be, and I think we have done a good job in convincing people of our value proposition and we are going to continue to do that.
PN: Given the broader client base, how does your business model segment cater for different customer needs including the informal sector, which is dominated by mainly ordinary people, while catering for big entities at the same time?
DTK: I’m glad you brought that up. We understand very well how to provide services at an individual level and over the years, we have been building out additional products and our deposit taking micro-finance-licence will enable us to increase that product offering. We presently have an enterprise product and we have agricultural institutions, we provide services to United Nations institutions and international NGOs sector to manage cash distribution and stipends.
We want to amplify that offering by providing solutions in remote areas for the farming context and payroll if necessary. So, I think that’s a very exciting area we have been working on for a couple of years and this really enables us to amplify that.
PN: With many players in the mobile money arena now, what is your comment on the competition factor, as well as the job impact of your business model or opportunities for ordinary people?
DTK: I think this is not going to be a “winner takes it all”scenario. There are reports of various industries that are developing their areas of economy, we have got pretty robust main contributors to GDP. We can see that Harare is busy, the situation 10 years ago was not the same as today and there are engines that are driving this and I think we under-estimate the effort exerted to manage these logistics but we can simplify that… I do not think this is a zero-some game but we are going to add value without negatively impacting anyone. I’m hopeful this transition has a positive impact in terms of lifting this cash management out of the informal sector.
PN: What would you consider as risk factors in this line of business, as well as opportunities? Are there any specific issues that maybe you think need to be fine-tuned that are a threat or risk to the business?
DTK: That’s a difficult question, particularly in the local context. It is quite hard to claim on crystal wall into the future. But obviously, we have to manage risk when it comes to dealing with cash as all businesses do. So, we work with various partners, and the banking sector and we are hoping to form partnerships and we will be the ones mitigating the risk. I think that the more we are trusted, the more the people will adopt a digital offering, which very much reduces risk. We have seen the risk profile in the country change over the last five years and so, with additional growth also comes additional risks. But I think those risks are better managed in a digital world rather than in a cash scenario.
PN: Southern Africa and African leaders are passionate about the issue of regional integration. What role does Mukuru and other financial services business play towards realising this regional integrated economy goal?
DTK: We have spoken quite a lot I think in the past about bridging borders and something interesting that we need to start talking more about is our offering to send from Zimbabwe and that offering is competitive. From that point, I will say we are connecting the dots from our own operated networks in South Africa, Lesotho, Eswatini, Mozambique, Zambia, Botswana and Malawi.
You can see the picture that I am building as we go through the stepping stones going north and that synergy of different networks and the ability to provide service across these areas is going to be very important for us. So, we are very excited about the network effects of our platform being leveraged over different territories.
-chroncile