Partner Event - Sept 2018
Lao People's Democratic Republic (Lao PDR), a country in Southeast Asia with 6.9 million people, has started the journey towards digitizing its cash-based economy and introducing digital financial services (DFS) to thousands of previously unbanked customers. There are several providers in the market that have begun to develop their DFS offerings.
Malgré l’évolution de la finance digitale au Sénégal et la diversité de l’offre de services, le taux d’adoption des services financiers numériques (SFN) est encore faible. Parmi les causes, on relève le manque de connaissance des SFN . MM4P a réuni les acteurs du marché pour discuter des solutions possibles et l’éducation financière a été identifié comme levier pour accélérer la pénétration de ces SFN.
On July 11, 2017, UNCDF MM4P, in partnership with design firm, 17 Triggers, organized a hands-on workshop in Lusaka, Zambia for 65 participants including DFS providers, donors, development partners and media representatives to share best practices from around the world and lessons learned from using HCD in Zambia and other markets where UNCDF MM4P is active. Participants learned from three institutional Zambian peers what HCD is, how it can be applied to product design and how it can increase user uptake and usage of products. They were trained on tools they could immediately take back to apply these concepts in their companies, to address their KPIs.
Case study: The route-to-market strategy of MoKash into rural areas
In August 2016 MoKash was launched. A first of its kind digital credit and savings product in Uganda, developed by MTN and Commercial Bank of Africa (CBA). And UNCDF ensured the development of a tailor-made product, with the usage of human-centred design. An approach that has ensured the uptake of MoKash, especially in rural areas and amongst women.
One year later, over 2.5 million Ugandans had registered for MoKash. Most of these people get small loans for around UGX 10,000 (around USD 2,80) and repay after one month.
UNCDF released a case study on the route-to-market strategy of MoKash, especially in rural areas.
Why do Ugandans value MoKash?
Finally, a product that enables them to conduct transactions by themselves, instead of going to a bank branch that can be hours travel away. This allows for quick and easy transactions. And gives people the privacy they need; no one has to know that you need a loan. Also, no one has to know that you have some savings.
The fact that customers only need a (basic) mobile phone and an MTN Mobile Money account makes it suitable for remote rural areas, where banks do not have branches and therefore access to financial services is very limited.
Part of the successful launch of MoKash has to do with the product design. Customer feedback in the design phase of the product was a very valuable resource. In-depth research on segment-specific needs enabled MTN to fine-tune the market positioning of MoKash, a product that would answer the needs of women, farmers and micro-entrepreneurs, particularly in rural areas.
This latest UNCDF case study from Uganda showcases a practical example on how human-centred design can be applied to the development of a financial product targeting specific market segments. Valuable lessons for anyone who is interested in how to better create products aimed at improving livelihoods of people in developing countries.
Read through the case study here
Plaidoyer pour une finance digitale plus inclusive au Sénégal
L’année écoulée aura été particulièrement active pour la finance digitale. Les fournisseurs de services financiers numériques (SFN) ont redoublé d’efforts pour attirer de nouveaux clients. De nouvelles offres ont fait leur entrée sur le marché notamment « YUP » et « ECOBANK mobile » , portées par deux grands groupes bancaires de la place. Les opérateurs de transfert d’argent, toujours aussi dynamiques, se sont de plus en plus tournés vers des solutions digitales qui permettent au client de disposer d’un service à portée de main, ou plutôt à portée de son téléphone !
Le Gouvernement a aussi été actif avec la relance de la Stratégie Nationale d’Inclusion Financière, en droite ligne avec la Stratégie Régionale d’Inclusion Financière dans l’UEMOA (Union Economique et Monétaire Ouest Africaine),adoptée par les états membres en Juin 2016. L’année a aussi été jalonnée de rencontres entre acteurs de la finance, favorisant ainsi les échanges et des idées de partenariat pour développer de nouveaux modèles de SFN.
Le programme MM4P n’a pas été en reste, en rassemblant des acteurs de toutes les catégories autour d’un groupe de travail sur la finance digitale au cours duquel des thèmes fédérateurs comme l’éducation financière pour les masses, les types de partenariats possibles dans l’écosystème des SFN, la réglementation sur l’Agency Banking ont été discutés. Tous ces développements intéressants sont annonciateurs de belles perspectives pour l’année qui commence.
Cependant, le développement de nouvelles offres SFN n’est pas suffisant pour contribuer réellement à l’inclusion financière ; encore faut-il que ces offres adressent les besoins des populations habituellement exclues du système financier.
Force est de constater que les populations des zone rurales, les femmes, les jeunes et les personnes ayant un faible niveau d’éducation, n’ont pas suffisamment accès aux services financiers. Selon la plus récente Enquête sur la Situation de Référence de l’Inclusion Financière au Sénégal (ESRIF), ces segments sont sous-représentés. Par exemple 31% des personnes habitant en ville disposeraient de comptes dans une institution financière contre seulement 10,4% en zone rurale.
Répartition des personnes disposants de comptes dans une banque, institution de microfinance, compagnie d’assurance ou à la poste (ESRIF)
Le paysan de Dagan Birame n’a pas forcément besoin de payer sa facture d’électricité ou bien de payer des frais scolaires dans les grandes universités Sénégalaises. Par contre, il pourrait être plus intéressé par un service qui s’intègre à son quotidien, à son environnement, comme un service de crédit ou d’épargne digital pour développer son activité agricole.
Les personnes ayant un niveau d’instruction limité ne devraient pas se sentir exclues des offres de finance digitale. Une expérience intéressante menée en Inde par le cabinet MicroSave a prouvé que la cible illettrée peut aussi utiliser activement un portemonnaie électronique si sa façon particulière de raisonner et de calculer est intégrée dans l’expérience utilisateur du portemonnaie. Le cabinet a développé la solution MoWo, une interface qui permet aux illettrés d’utiliser un compte de monnaie électronique grâce à l’utilisation d’images et icônes. (Voir photo)
Interface MoWo utilisée en Inde. Crédit : MicroSave
Le taux d’adoption des smartphones au Sénégal est assez élevé , y compris dans les zones rurales où il est maintenant fréquent de voir des personnes, ne sachant ni lire ni écrire, utiliser un smartphone pour communiquer avec leurs proches.
Aux contraintes infrastructurelles et structurelles qui peuvent militer contre la priorisation du monde rural (instabilité du réseau téléphonique, absence de réseau 3G, pas d’électricité, cout d’un smartphone, cout de la connexion 3G, …), s’oppose l’aspiration forte des populations à s’intégrer dans la modernité en possédant un téléphone (voire smartphone) et en l’utilisant, eux aussi, de façon intégrée à leur vie de tous les jours au village.
Il est certes rassurant de voir l’évolution du marché sénégalais des SFN , avec la multiplication des offres. Mais il est temps de changer le paradigme qui consiste à déployer des services bénéficiant plus aux populations éduquées, résidant en milieu urbain, et à majorité masculine. Cela permettrait non seulement d’augmenter l’inclusion financière mais en plus d’exploiter un marché de masse. Et même si le coût pour atteindre ces cibles « exclues » peut sembler élevé, des solutions ayant données des résultats positifs existent ailleurs ;de quoi inspirer les fournisseurs de services financiers numériques au Sénégal.
La finance digitale a le potentiel pour accélérer l’inclusion financière. Cela se fera d’autant plus rapidement que les acteurs privilégieront des offres dédiées et adaptées aux populations les plus délaissées par la finance classique.
 Banque, institution de microfinance, compagnie d’assurance, ou la poste
 Village situé dans la région de Kaolack, au Centre du Sénégal
 A la fin Q3 2017, on estime à plus de 6M le nombre de smartphones connectés aux réseaux de télécommunications au Sénégal - www.gsmaintelligence.com
M-Dorado, one step further: Empowering Senegalese youth through access to digital financial services
Thanks to the Youth Agent project, 26-year-old Aby Ndour, from the Saly Joseph district of Mbour, Senegal, greets each morning with new vigor. "In September 2017, I was selected as one of the participants in this project. It was an unexpected opportunity. My husband died few months ago leaving me with two small children. I have been getting by on income earned from doing odd jobs like cleaning and sales. But it’s nothing fixed. With this new opportunity, I now have the chance to put my business skills to use. I can’t wait to get started”. Aby is one of fifteen young people recruited to join the first phase of the Youth Agent project; just like Ndeye Fatou Ndiaye, a 30- year-old mother of five and Aboubacar Gueye, a 29-year old single male. What do they all have in common? They are young, unemployed, desperate to find ways to make ends meet, and willing to seize any opportunity that presents itself.
The United Nations Capital Development Fund (UNCDF), through two of its seminal programs, MM4P and YouthStart, is partnering with the mobile network operator Orange 1 to launch the ‘Youth Agents in Senegal’ project. This partnership dual objective is to increase financial inclusion through the extension of digital financial services (DFS) in Senegal and to promote the employability of young people through entrepreneurship.
A new partnership model for young entrepreneurs
The Youth Agents project has been designed using a micro-franchising model. It uses the 'business in a box’ approach which links companies who target new customer to high-potential, young entrepreneurs who lack the capital to develop their own business initiatives. Each young recruit is equipped with a kiosk to enable him/her to offer DFS such as selling airtime, cash in /cash out and mobile phone products sales. The kiosk is financed by a loan granted to the young entrepreneur by a participating financial institution. A typical loan amount is above CFA 600,000 (approximately US$1100). A franchisor serves as a guarantor for this loan. Access to funding is the key step in the process of youth empowerment, as it is the only means by which they can actualize their dream of becoming an entrepreneur. As a sign of commitment, each youth entrepreneur is required to put up CFA40,000 (approximately US$72), of which CFA15,000 (approximately US$27) go towards opening an account at lending financial institution.
The two-year project has been embraced wholeheartedly by young people in both the suburban and rural areas of Senegal. Abdoulaye Gueye said: “I am the eldest of my family and my father is retired. I must now take over caring for the family. In Mbour it is not easy to find work. When I was recruited to serve as a supervisor for this project, I was given a monthly salary of CFA80,000 (approximately US$145). With this fixed income, I am in a better position to help my family. I intend to seize all the opportunities that will arise during this project.”
The partners engaged toward youth employability
UNCDF and its partners decided to capitalize on the affinity young people have for new technologies to promote youth employment and contribute to their financial inclusion. The project brings together several actors to advance the DFS ecosystem:
- The MM4P programme, funded by the Mastercard Foundation, is a UNCDF initiative launched in 2012 to help low-income households improve their financial security through the provision of digital financial services;
- YouthStart is UNCDF programme launched in 2010 to increase access to funding for the youth, supporting service providers in the design and development of both financial and non-financial services for young people; •
- Orange through its subsidiary e- money issuer OMFS 2 , and beyond the need to broaden its customer base, intends above all to participate in the financial inclusion of young people by sharing its expertise on entrepreneurship;
- A micro franchiser responsible for recruiting, training and monitoring Youth Agents;
- A microfinance institution partner of the micro franchisor, to enable young people to open accounts and receive funding;
- Amarante Consulting, a consulting firm specialized in the development of DFS distribution network to provide technical assistance to the micro franchisor in terms of good practice in managing agents;
- A firm specializing in digital platform development to create a Business Intelligence application with which young entrepreneurs will manage their business and better know their customers.
New opportunities for digital financial services in Senegal
To test the model, the project will deploy fifteen pilot kiosks, learn from them what works and what doesn’t and subsequently, improve the partnership model. The goal is to set up 150 kiosks for young people in suburban and rural areas of Senegal by April 2018. Beyond providing employment opportunities for young people, the project supports the development of the distribution of DFS, especially in peri-urban and rural areas. The first kiosks will refine the key elements of the project, such as:
- The recruitment and training strategy for the youth
- The financing mechanism for the youth
- Agent network and liquidity management models
- The performance of young people in the micro franchising for DFS
- The impact of the Youth Agents project on the adoption of DFS
As ambassadors of mobile technologies, the ‘young agents’ can be a powerful driver for the adoption of innovative financial services in their communities.
The ecosystem approach used in this project, which put together multiple partners, can be utilized to leverage high volume payments from the Government or NGOs (such as salaries, pensions, allowances, scholarships) in areas where populations do not have access to DFS. There is a myriad of perspectives that make this project a great step forward on the road to M-Dorado, the paradise for DFS.
Pour lire en français, cliquez ici.
1. Orange provides digital financial services under its entity Orange Finance Mobile Senegal (OFMS)↩
2. Orange Finance Mobile Senegal↩
Les Fintech bouleversent l’univers de la finance digitale en ouvrant de nouvelles perspectives. Ces start-up, spécialisées dans la technologie financière, apportent des innovations majeures dans les domaines du paiement, de l’assurance, du crédit, etc. Elles ont la capacité de créer de nouveaux services à valeur ajoutée, adaptés aux besoins des utilisateurs. Au Sénégal où l’adoption des SFN se fait tout doucement, ces nouveaux acteurs ont récemment fait leur apparition. Le programme MM4P est allé à leur rencontre pour voir comment les accompagner dans leur intégration du marché et ainsi accélérer l’utilisation des SFN.
This whitepaper outlines major findings of a diagnostic exercise conducted by the MM4P team in August 2017. This exercise involved desk research and an in-country mission to gather data, conduct interviews with agents, tellers and customers, and survey the insights of local stakeholders.
Mototaxis, ambassadors of mobile payments in Benin
Caption : Zem are the most commonly used means of transport
Cotonou, BENIN- Over 250,000 moto taxi drivers “Zemidjans” or “Zem” are circulating in Benin. Collectively, they represent a sizeable contribution in Benin’s economy: one million people depend on the income generated by the Zems activities and two million Beninese are regular patrons of their services. However, as most of the Zems do not have bank accounts, their transactions are conducted largely informally, in cash. This represents an opportunity for the digital financial services sector to offer this group of users’ financial services that could benefit their lives.
The MM4P program in Benin is currently assisting the mobile network operator, MTN Benin on a merchant payment initiative aimed at enabling customers to pay their mototaxi fares using mobile money.
Co - create solutions with mototaxis
Launched in July 2017, the first phase of the project focused on the design on the mobile payment solution. With the support of design firm, Innate Motion and consultancy firm, PHB Development, MM4P and MTN adopted a “Human Centric Design” (HCD) approach to understand the typical Zems journey including their wants, needs and aspirations when it came to financial services. This approach helped uncover insights a classical market study might have overlooked.
Subsequently, we explored mobile payments from different angles: from the point of view of the mototaxis drivers, their suppliers, MTN teams and their affiliated communication agencies. In small groups, we developed different scenarios keeping mototaxis drivers at the center of the discussion. The idea was to enables customers to pay their fares with mobile money, and simultaneously enable the Zemidjans to use part of the money collected to make payments using the same mobile money platform. In contrast to standard design processes, the scenarios focused on the life of Zemidjans and not on the financial product itself.
We asked the Zemidjan whether the scenarios presented matched their real-life experiences? What improvements could be made? What changes were needed? Their answers helped us rewrite scenarios so that they became Zem’s stories, stories they want to live or experience and in which mobile payment may play a role. Utilizing this co-creation approach, we were able prioritize the mix of value propositions not only for the Zem, but also for their customers to use mobile money payments. With the HCD approach, we not only tested innovative solutions but we validated them with the primary stakeholder, the Zem. The active participation of various MTN teams (Communication, Marketing, Technical, etc.) throughout the process facilitated the choice of payment solutions that were acceptable to all.
The Zem, to promote the adoption of mobile payment
By deciding with MTN to explore the world of Zemidjans via an approach centered on users, MM4P put the customer at the heart of the digital financial services ecosystem. Experience has shown that the adoption of these services depends, to a large extent, on whether they resonate with the customers and truly meet their needs. As such, the needs and constraints of customer should always be factored into the products and services design process.
We chose the Zem because they are powerful vectors of information or even of behavioral transformation. They can position themselves as ambassadors to impact the use of digital financial services in Benin and to influence the populations.
The adventure with the Zemidjans continues. But we are already seeing signs that the HCD approach an excellent tool to convey and leverage the benefits that digital finance can have. It is our belief that HCD can help leverage on all innovative products for which increased adoption and usage are proving to be difficult.
We are in the process of selecting a representative sample of these moto taxi drivers for the implementation of a pilot in the next phase. In a future blog, we will share some of the initial results obtained, as well as the challenges and/or new ideas discovered.
By Bery Dieye Kandji, KM Consultant, and Jamelino Akogbeto, DFS Expert
The Roaming Agents of Lao PDR
On October 16th 2017, Yong Duangphachanh did not make the 2-hour journey to a banking agent point in the district town to deposit money for her children’s educational fees. Instead, she attended a Xainiyom Micro Finance (XMI) center meeting in her village in northern Lao PDR and was the first in her area to experience the latest evolution in branchless banking.
XMI has partnered with BCEL’s Community Money Express (BCOME) and since February 2017, has been providing BCOME transactions to its customers via their 7 branch offices; including Beng where Yong Duangphachanh has her XMI account. But what delighted her was that now she did not have to travel to the agent - now the agent could travel to her.
This pilot initiative is supported by the UNCDF Making Access to Finance More Inclusive for Poor People (MAFIPP) programme jointly operated with the Bank of Lao PDR, with support from the Australian Government and technical assistance from UNCDF MM4P. The programme aims to integrate microfinance institutions (MFIs) in to the digital finance ecosystem in appropriate ways. As a follow up to MAFIPPs “Training on Digital Finance and Interventions Models for MFIs” in and building upon the UNCDF MFI strategy toolkits to enter the digital financial service (DFS) arena, XMI was ready to take the next step.
To provide convenience and continuous service to its remote customers XMI conducts weekly center meetings in all villages accessible by motorbike. Meetings only occur in the mornings, and take about one hour typically for clients to make loan repayments, to deposit or withdraw on their savings accounts. Now, as part of the center meetings, the XMI field staff travels to the community with a laptop, printer and, most importantly, a 3G Pocket Wi-fi router to allow the loan officers to connect to the BCOME platform. There are already plans to replace the equipment with a more portable tablet and a pocket-sized Bluetooth printer. Although now customers can avail opportunities like BCOME transactions including depositing and remitting funds. Currently, XMI conducts center meetings in 3 provinces (Oudomxay, Luang Namtha, Bokeo) and 14 districts covering 415 villages.
And with all that traveling, XMI staff are well known in the communities that they serve, and they look for innovative ways to bring valuable services and raise awareness about them. As part of their mission, they conduct promotional activities at schools. Such as the outreach to high school seniors conducted by XMI at Meuang Beng High School where students were introduced to the benefits of savings and educational loans. Although XMI accounts cannot be opened by minors, it is presumed that parents will be able to avail of these services on their behalf. Additionally, XMI explained how BCOME transfers can help students who study away from home and need to receive financial support from their relatives.
XMI continues to make further inroads for financial inclusion and values its relationship with BCOME as it is a positive way to associate with BCEL (the largest bank in Lao PDR with 41% market share in retail savings and 4% in lending). The association makes people more confident in conducting banking and financial services with XMI.
This pilot activity of offering remote transactions has been well received by customers but it is not without its challenges. BCEL is cautious about allowing agents to conduct transactions away from the designated and approved premises. BCEL understands the importance of trust in agent banking transactions. And they ensure it by having an authorized sign board and customer pricing clearly displayed. XMI and their well-trained staff could offer significant assurance to BCEL. XMI has been authorized by BCEL to conduct only on-line BCOME transactions, so that the BCOME remittance occurs in real time. The customer either gives cash or the amount is debited from her/his savings passbook – the transaction will be recorded in the XMI monitoring information system only when the credit officer returns to the Service Unit. The XMI savings passbook (containing the client’s picture) can be used for formal client identification in lieu of the common ID card of family book – a procedure mandated by BCEL to fulfill the anti-money laundering obligations applicable to commercial banks.
XMI is hampered by the lack of suitable mobile data connectivity at many communities, which would require offering off-line transactions. For example, when a customer wants to deposit or remit funds, that transaction would be executed once the officer returns to the branch office where there is a stable internet connection. BCEL is considering authorizing off-line transactions based on the success of this initial pilot with a roaming BCOME agent.
“A service such as this makes banking more accessible and can also increase business for us,” said Khanthaly Saenvilayvong, Managing Director of XMI. He accompanied the team on this first experiment and is pleased and proud that XMI is the first to bring a real time DFS solution to a remote community in northern Lao PDR. “These DFS services will continue to develop and provide opportunities to offer more and more services - once people become aware of the service they will try it and then become regular users due to the security and convenience.”
XMI key figures (as of Q3 2017 unless stated otherwise, source: mixmarket.org)
|Nb clients||34,280 (60% women)|
|Nb borrowers||9,223 (72% women). Largest Lao MFI by number of borrowers|
|Loan Outstanding||45.1 billion Kip ~$5.4mn. Agriculture loans 65-70% of portfolio|
|Portfolio at Risk 30days (PAR30)||2.29%|
|Total assets||57.0 billion Kip ~$6.9mn|
|Return on Assets (RoA)||11.9% (2016 annual)|
|Nb Service Units||
7 all acting as BCOME Service Points
|Nb & value BCOME transactions||117 with total value 259,457,000LAK ~USD 31,600
(October 2017, at roaming agent and XMI Service Units combined)