- 7th December 2017: UGANDA - FINTECH4AG Meet up, Kampala
Creating a new world of banking in Lao PDR
On 12 May 2015, the first branchless banking transaction was completed in a rural village in the Lao People's Democratic Republic (Lao PDR). This ground-breaking transaction took place with a service launched by Banque pour le Commerce Exterieur Lao Public (BCEL), one of the country’s leading banks. The service, BCEL Community Money Express (BCOME), was the first of its kind in this largely agrarian and rural nation. Digital financial services (DFS) in Lao PDR can have significant impact by providing access to services that the dispersed population is sorely missing. The first branchless transaction opened a new world of banking that is fast, safe, inexpensive, convenient and reliable, though the story behind the project was neither swift nor simple. The journey to launch digital finance and branchless banking took investment and planning that began years ago, in 2012, with the engagement of the Bank of the Lao PDR (BoL) and the United Nations Capital Development Fund (UNCDF).
Bringing digital finance to Lao PDR required a serious commitment by BoL, which had not yet established a regulatory framework for DFS at the time. But BoL had a vision for digital finance, that it would be an important service to broaden financial inclusion and to accelerate local development. The 2014 FinScope survey of the country revealed that access to banking services was twice as high in urban areas than in rural, with the areas without year-round road access severely affected. The two main reasons for the finding were the following:
- Distance: It takes more than one hour of travel time for at least 40% of rural people to travel from the often remote mountainous areas where they live to a bank branch or an ATM.
- Income: Most rural dwellers have unpredictable income.
In sum, banking was an awkward, time-consuming and expensive proposition for many people (see the figures for greater understanding of the financial context at the time).
In 2013, BoL hosted a two-day stakeholder conference with the support of UNCDF and International Finance Corporation to explore the benefits of digital finance for financial inclusion and to develop a strategy to implement DFS for the benefit of rural Lao people. BoL also requested a scoping mission to assess the potential for DFS in the country be conducted by the UNCDF programme Mobile Money for the Poor (MM4P), through the national implementation programme called Making Access to Finance More Inclusive for Poor People (MAFIPP). The project received generous financial support from the Australian Government.
In parallel, with the support of UNCDF, BoL went to work on creating an enabling regulatory framework for DFS to permit banks and non-banks to offer services. As Akhom Praseuth, Director General of the Financial Institution Supervision Department at BoL, explained, “The Bank of the Lao PDR has a vision for digital finance and we work on its promotion. We are focused on building a strategy for expanding access to financial services, and set the laws and regulations for mobile banking as a tool to control digital finance.” UNCDF supported BoL in its regulatory efforts by assisting BoL staff to attend different workshops and go on exposure visits to Cambodia as well as providing international regulatory experts to advise on the development of appropriate regulations. In 2014, two members of the BoL regulatory committee also travelled to the United Republic of Tanzania to meet with staff of the country’s central bank, Bank of Tanzania, to understand its role and the framework that had helped that country develop its own successful DFS ecosystem.
In the intervening period, BCEL became attracted to DFS and started developing its own vision to promote a suitable service for the Lao context. BCEL worked concurrently with a UNCDF-supported consultancy to develop a five-year business case that established a target of serving 150,000 customers annually through a network of 410 agents. “The inspiration to create this project began when we received the statistics on Lao people’s access to financial resources and the banking system in the country,” said Nanthalath Keopaseuth, Deputy Director at BCEL (the service provider for BCOME). “We like to bring the technology into the system to reduce costs and at the same time to offer the communities accessibility to funding resources. That is how it made BCEL to be interested, to carry out studies and have a hands-on approach to the project,” stressed of Mr. Keopaseuth.
BCEL is one of the oldest and largest banks in Lao PDR in terms of retail customers, branches and ATMs. In the last few years, BCEL has successfully rolled out i-Banking—a corporate Internet-banking platform—within its organization as well as a popular, highly functional mobile banking application for individual clients called BCEL One. Introducing branchless banking was a wholly new concept for BCEL and for the country that required the bank to think outside the box and to be ready to manage a range of complex challenges like merging traditional retail banking with branchless banking and digital finance. Addressing these challenges meant considering not only the technology required but the manpower and knowledge needed—as well as the capital required. Most significantly, BCEL had to change its views of the customer.
Typically, a bank builds branches and customers go to the branches. In the new world of branchless banking, the bank is in the position of going to the customer, bringing them much needed services. The concept of banking at the customer’s doorstep is highly appealing to customers, but at the same time, it can represent some level of risk for the bank.
The BCOME service relies on agents, so BCEL needed to build a relationship of trust with them and in turn inculcate trust in the agent within the community and by individual customers. To create a meaningful value proposition for BCOME agents, BCEL invested significantly in training its agents, conducting substantial marketing campaigns with agents, and teaching agents how to proactively promote the service and serve customers.
To create a clearer picture of the service, UNCDF and MAFIPP brought the BCOME development team to visit countries that have similar market situations. The team exchanged lessons learned and brought back know-how to develop a system that was well-suited to the bank, its customers and the Lao context.
After operating for over a year, the BCEL branchless banking service has seen positive signs of development. By the end of 2016, there were 128 agents working in all provinces nationwide.
“What surprised me is the result of the products that BCEL has developed, and it has been introduced to communities. The service has been well accepted in society and the product has been widely used by customers, and the number of the agents has increased,” reported Sengchanh Manivanh, BCOME Coordinator.
The success of the BCOME project is a result of the hard work of the BCEL team—and that team clearly includes the agents. As trusted leaders in their communities, they have become the face of banking for many people and are educating them about financial services. People are understanding the services and realizing that banking is not something incompatible with them. With the creativeness of BCEL to build its business model around the circumstances of the country and with the help of external organizations, BCOME is now a reality.
This is the third blog post of a series about the dawn of digital financial services in Lao PDR. Read also "Community development through digital finance in Lao PDR" and "Agents—The revolution on the ground in Lao PDR" .
June 2017. Copyright © UN Capital Development Fund. All rights reserved.
The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNCDF, or their Member States.
Zoona recognized as the most creative DFS provider in Zambia
Every year since 2013, the Bank of Zambia (BoZ), in collaboration with other key stakeholders in the financial services ecosystem, has organized the Financial Literacy Week (FLW) campaign to encourage more Zambians to take control of their financial lives. In 2017, the theme for FLW was “Know and plan your finances for a better life”. In the month following the week-long campaign, the Governor’s Financial Literacy Awards ceremony was held to recognize the efforts of financial service providers that actively contributed to the success of the campaign.
This year for the first time, the Awards featured the category Most Creative Digital Financial Services (DFS) Provider for which providers were judged by BoZ based on the level of innovation, simplicity and availability of their DFS product or service in the market in the market.
Finally, the day of the Awards arrived and hundreds of individuals representing over 50 financial service providers crowded into a ballroom at the Intercontinental Hotel in Lusaka, eager to find out which of their peers would walk away that night with a coveted award. Nervous anticipation filled the room as the representative from BoZ announced the DFS category and the entrants, Airtel (for their MasterCard for mobile money wallet), FNB (for their mobile banking e-wallet), MTN (for their Kongola loan product), Zoona (for their Sunga Wallet) and Spargris Zambia (Kazang) – Azuri (for their Pay-As-You-Go Solar option). And then the winner was announced…it was Zoona!
Launched in February 2017 by Zoona, Sunga is an e-wallet product that enables customers to keep money safe at no charge. In this way, customers are empowered to reach their savings goals, for example, for school fees, building a house or expanding a business. With over 35,000 users in a relatively short time, Sunga is poised to revolutionize financial inclusion in Zambia. A key advantage of a Sunga account over similar products on the market is that it is easy to set up and no paperwork is required, there is no minimum balance necessary- customers can open an account with less than USD 1 and there are no monthly fees associated with maintaining the account.
Having worked with Zoona as they were preparing to launch Sunga, MM4P was happy to see the efforts of this entrepreneurial and innovative organization recognized publicly. Zoona is one of several DFS providers that have contributed to moving the market forward in Zambia. Zoona Managing Director, Robert Keating, received the award on behalf of Zoona saying “you can expect even greater things from Zoona in 2017”. DFS in Zambia is at a tipping point and the market is growing and expanding. We are excited to see not just what the future has in store for Zoona but also for DFS in Zambia in the coming years.
MM4P is a joint program of UNCDF and FSDZ.
Unlocking DFS innovation in Uganda: The role of Open APIs
Mobile financial services in Uganda have come a long way and continue to hold huge potential for enabling access to financial and none-financial services for a large share of the population. Mobile money has grown from being a just money remittance service to become a platform that enables the delivery of many more innovative products and services.
Mwende Vincent, a coffee farmer in Kapchorwa was introduced to PAYG solar as part of UNCDF’s work in digitising agro-value chains. Vincent was able to have light in his home because he could pay for it in small instalments over time, making it affordable to acquire the home solar system. Delivering such a service is made possible by integrating the services of a solar company and a telecom company (mobile money). The integration is technically enabled by an application programming interface (API).
Many other services we enjoy today are enabled by APIs. A farmer accessing weather information by SMS, a market vendor receiving a micro loan or saving on mobile, being able to order for a cab (Uber) or a ‘boda-boda’ (Safeboda) in Kampala, are all enabled by APIs.
An API is what allows software programmes to talk to one another to enable the delivery of a given service. APIs connect third-parties (developers, fintechs etc.) to established payments platforms (of for example telecoms and banks), enabling the delivery of innovative services that address needs of many customers.
Recently, the UNCDF MM4P programme in Uganda was involved in technology innovation contests for young developers (DataHack4FI and MTN App Challenge) in Kampala. The innovative solutions presented were very encouraging about the potential for digital innovation to provide solutions to some of the pressing community challenges in agriculture, health, financial services, transport, and education. When asked teams that stood out what was holding them from taking their solutions to market, they mentioned access to the necessary APIs from payment service providers (PSPs).
By lowering the barriers to access key APIs, PSPs open up the innovation space for external developer talent to propose new solutions to the market. The benefits of this are immense for stakeholders: more solutions, more usage, more revenue.
Whereas the concept of Open APIs has been around for a while, in East Africa and Uganda in particular, it remains quite a new concept and business model for industry players.
Tomorrow 27th June 2017, MM4P Uganda is convening digital financial services (DFS) industry players in the country to discuss how to leverage Open APIs to unlock DFS innovation for the benefit of everyone. Attending will be top executives and decision makers from telecoms, banks, fintechs, regulators, donors and NGOs in the DFS space. The event will feature international and local key note speakers and panellists, experts in DFS and Open APIs.
Together, industry players will explore the concept of Open APIs and the benefits it holds for the DFS sector in Uganda. We will hear from the fintech community about their experience and challenges when dealing with DFS providers and the opportunities they see in open APIs. We will also hear from key DFS providers on the challenges they foresee in the progression towards openness in DFS. Industry players will also discuss what it takes to get started, from the business considerations, to the operational and technology considerations.
With more awareness and a shared understanding among industry players about the subject, MM4P will continue to engage with the sector to see traction on the path towards open APIs in Uganda.
To join the event, register through this link.
Community development through digital finance in Lao PDR
There is an old Lao saying, ‘If you don’t go out of the village, you will not see the land far away; if you don’t go study, you will not have any knowledge.’ It is still commonly used in the Lao People's Democratic Republic (Lao PDR)—a country with a surge in demand for education, with 78% of youth enrolled in lower secondary education while 56% of adults have primary education or less (see the figure for more detail). Sending children away from home for higher education is considered a requirement for parents to build their children’s future. So, there is little surprise that sending money to support children’s education has become a primary use case for the first branchless banking service in Lao PDR.
Banque pour le Commerce Extérieur Lao Public (BCEL), one of the country’s leading banks, developed the branchless banking service, which is called BCEL Community Money Express (BCOME). It is entirely new; no other bank offers this kind of service in Lao PDR. Supported by United Nations Capital Development Fund (UNCDF) and its national implementation programme Making Access to Finance More Inclusive for Poor People (MAFIPP) and PHB Development, BCEL launched BCOME
in June 2015 with a small pilot of only 11 agents. Today, with more than 125 agents in every province of the country, BCOME has more than doubled the size of the BCEL branch and service unit network. Villagers perceive BCOME as convenient, quick, safe and friendly, the latter because it is offered by someone they know in their community—a neighbour, relative or acquaintance in town whom they can trust and with whom they can comfortably share their needs.
Agriculture is the backbone of the Lao economy, but farmers are dispersed, living in remote, rural areas throughout the country. Travelling to a district town can be an undue burden for them, and accessing formal financial and banking services is even more difficult both because of the distance to a bank branch and because of insufficient income and low financial literacy. These challenges have understandably led farmers to depend on cash. For them, sending money to family members in other provinces by a bus driver is a method often used, but it is time consuming and sometimes risky.
Sompong Veosy, a farmer from Souvannaphoum Village in Paklai District, grows rice and raises buffalo and cows for his income. He normally spends all day looking after the rice paddy and livestock, only leaving his farm after sunset. Taking time from his work to travel to town to complete a transaction is exhausting. But, since a BCOME agency in his village opened, his outlook has changed. “In the past, I had to travel a long way to send money to my children for their education, but now it is easy, fast and convenient. I am very, very happy now. It is perfect,“ he explained with a happy smile.
The BCOME service has drawn this new customer segment to BCEL, which has been surprised to learn just how much money from rural farming communities flows throughout the country. Through the service, BCEL can stay close to these new customers and learn about their requirements.
Thong Khoun, a villager from Thakokhai in Pakngum District, regularly sends money through BCOME to her son who is studying in the southern part of the country. Sometimes, though, it is the opposite: she has an urgent expense of her own, and her son sends money back to her. “My son asked me to open a bank account so that he can send money to me in the future. So, I wish that BCOME can open the account here. It is convenient because it is close to our house,” Ms. Khoun explained. “I used to ask the agent if I can open my account with her. I want to save money, and I also want to have an ATM card. I feel that I don’t want to carry cash anymore. If I have a card, wherever I go I can withdraw money from the machine—that is what I want now. If we can open the account with BCOME, it would be wonderful,” she added.
BCOME is not only a solution for farmers to support their children’s education, it also allows them to have more opportunities to trade their products more broadly—helping them to break free of poverty. It helps farmers increase their income by providing a quick and easy payment system. BCOME responds directly to the needs of communities with a service that old-fashioned banking cannot provide. Siavone Phomavong, an agent in the capital city of Vientiane, shared an example: “I have a customer who sells organic vegetables. He sends money to buy them from farmers in Pakse, Champasak Province.” The BCOME service assists the growth of agribusinesses, as the money from buyers in the main cities flows out to farmers in the provinces, where the farmers can save and re-invest for better techniques and more productivity.
The access afforded by branchless banking does not only support education of farmers’ children and their agribusiness, it is also suited to many different types of business requirements, such as paying for insurance and making monthly payments for the purchase a car. Early adopters who have experienced the efficiency of the first branchless banking service in Lao PDR have greater understanding of the new system and value the system more. It benefits them in many ways, relieving stress in their lives and reducing the time and the cost of transactions, which in turn gives them a chance to save and thereby prepares them to take a first step out of the poverty trap.
In the future, BCOME will continue to grow with new product and service offerings and to play an important role in accelerating the growth of all kinds of businesses. The convenience and accessibility can be applied to any customer segment, from low-income populations who deal in small transaction amounts to large organizations that can network with people in any isolated region. These advancements will contribute to a greater number of people improving their livelihood by using a low-cost, easy and friendly system, which will drive the economy of the household and in turn the communities that form the core of the country’s wealth.
This is the second blog post of a series about the dawn of digital financial services in Lao PDR. Read also "Agents—The revolution on the ground in Lao PDR" for an agent's perspective.
June 2017. Copyright © UN Capital Development Fund. All rights reserved.
The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNCDF, or their Member States.
 Lao People’s Democratic Republic, Ministry of Education and Sports, Education and Sports Sector Development Plan (2016–2020) (Vientiane, December 2015).
Going digital, or stick to cash?
“Sometimes I am forced to travel with tens of millions of shillings in my pocket and I fear for my life. Someday, something will happen”, says James Odega, a coffee trader in Eastern Uganda. James is one of hundreds of coffee traders who buy coffee from many of smallholder farmers around the Mount Elgon area and sell it to Kyagalanyi Coffee Limited (KCL) in Mbale, Uganda. After being paid for the coffee he has bought from farmers, James has to travel back to his village. This trip takes him around two hours using public transport or a ‘boda-boda’ (a motorbike taxi), often with over UGX 3 million (over USD 1,000) in his pocket.
In addition to buying from traders in Mbale, KCL operates six coffee collection stations in remote areas, where undried coffee is purchased directly from farmers in surrounding villages. Like James, KCL staff members are faced with a risk when they make one to three hour trips to Mbale multiple times every week to pick up over UGX 35 million (over USD 10,000) to pay farmers. Finally, the farmers themselves have to keep the cash safe, as this will get them through to the next season.
Instead of being paid in cash, KCL with assistance from UNCDF’s MM4P programme now offers farmers and traders the option of receiving mobile money instead. In an effort to alleviate the risks he is faced with James would like to use mobile money to pay his farmers. “I would even pay for their withdrawal fees" he says, " But I don’t think the farmers would accept.” When asked why, James says he has discussed it with many coffee farmers and most of them simply say no. “I don’t think they understand. They don’t know how it works.”
However, according to Bram Peters, Country Technical Specialist in digital finance for UNCDF Uganda, the reasons many farmers are not accepting mobile money may run deeper than simply a lack of understanding. “We have run a series of sensitization efforts and most farmers already use mobile money to send and receive remittances. The people we work with in our projects know very well what is best for them. Most of them have limited financial resources, so smallholder farmers are already used to making cost-sensitive decisions on what makes more sense for them; being paid in cash or via mobile money.”
In collaboration with CGAP, UNCDF engaged with PHB Development to take a closer look at whether being paid digitally makes economic sense for each of the stakeholders in the coffee value chain. Or in other words, is there a value proposition for each player to move from cash to digital payments?
PHB Development introduced an innovative approach to gain a deep understanding of the value propositions different players in the coffee value chain are faced with. “PHB has developed a method called Value Proposition Mapping (VPM), which borrows from traditional activity-based costing. This is a popular methodology used in management accounting, to give insight into costs associated with operational activities related to paying and receiving funds", says Ciprian Panturu, PHB Development Associate who recently joined the UNCDF MM4P programme in Uganda.
PHB Development researchers first interviewed farmers and traders that have links with KCL and mapped their market behaviour on a month-on-month basis over the course of a year. They looked at virtually all their sales and purchases, where the transactions took place and the associated transport and time costs. They then incorporated the value of risk the interviewees place on travelling with cash.
“The data gathered is used to calculate a per-activity and per-transaction average cost of cash, which allows for a comparison to what the cost of using mobile money instead would be. This is a very efficient way of comparing the cost of cash and the cost of digital payments for all players along the coffee value chain - a method which can easily be used in other agricultural value chain in Uganda in the future,” says Ciprian.
Data and information of the VPM are currently being analyzed and the first results are expected in the coming weeks, just in time for the next coffee harvest season. A momentum where the introduction of digital payments can be of real value. Depending on the results, UNCDF and CGAP are looking to use this method in other agricultural value chains in Uganda, such as tea, dairy and maize.
By Páll Kvaran, Research Consultant at PHB Development
Moving further down the digital route
The West African Economic and Monetary Union (WAEMU) has a regulatory framework that enables microfinance institutions, as well as non-banking actors such as mobile network operators and money transfer specialists, to provide decentralized financial services to individuals and businesses. The regulatory authority, the Central Bank of West African States (BCEAO, Banque Centrale des États de l'Afrique de l'Ouest), is in favour of introducing new cashless and electronic payment methods and now includes increasing the banking service penetration rate and protecting digital finance users among its priorities.
One objective of the MM4P programme is to help develop the branchless banking ecosystem in countries where it is already established. In West Africa, the programme is helping to determine the regulatory conditions that will enable a large number of actors to offer appropriate services in the most remote areas. The aim is to better address customers’ needs while improving the security of their operations.
In order to enable microfinance institutions to gain a better understanding of the stages involved in rolling out digital finance solutions and the possible options available to them within the current regulatory framework, MM4P organized a joint regional workshop on 8 May 2017 in the Radisson Blu hotel in Dakar with Consultative Group to Assist the Poor (CGAP), International Finance Corporation (IFC) and Microsave. The workshop brought together microfinance institutions from seven countries of the WAEMU zone (Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal and Togo), all of which already engage in digital finance or wish to do so, along with representatives of the regulators.
The participants had an opportunity to discuss the content of a guide produced by CGAP, ‘Branchless Banking and Digital Finance for Microfinance Institutions in the WAEMU Zone.’ This guide builds on the approach of a feasibility study conducted for a microfinance institution in Burkina Faso (RCPB, Réseau des Caisses Populaires du Burkina), when it introduced a digital finance solution to its operations.
The second panel, facilitated by MM4P, enabled issues such as electronic signatures, digital service subscriptions and interest rate caps to be considered—all essential issues for institutions embarking on their digital journey.
According to the regulation in Senegal, electronic signatures are officially recognised by all actors. Furthermore, ADIE (Agence De l'Informatique de l'Etat, the state agency for information technology) is also working on acceptance mechanisms. BCEAO remains committed to the expansion of digital financial services. However, participants raised certain challenges to their engagement in the digitization process. The need to open up the unstructured supplementary service data (USSD) channel to all actors was noted, as well as the importance of cooperation between the regulators to level the playing field between telecommunication and financial actors. Digital credit and savings services were also discussed, particularly aspects related to the appropriate pricing of such services, which can only emerge through multi-party partnerships between financial institutions, mobile network operators, e-money issuers and fintechs specialized in credit scoring. The context of the WAEMU zone, with interest rates capped at 24 percent a year for microfinance institutions and 15 percent a year for banks, limits the profitability of the mobile micro credit and savings schemes.
Good prospects are nonetheless emerging with the commitment by BCEAO to promote financial innovations in the regional financial inclusion strategy now being implemented.
In order to obtain a clearer overview of the challenges and impact of decentralized financial services, the participants listened to the experience of the Commercial Bank of Africa in Kenya, which has successfully launched the M-Shwari, M-Pawa and MoKash products respectively in Kenya, United Republic of Tanzania and Uganda respectively. Via videoconference, Andrew Mwithiga, Product Development Manager at the Commercial Bank of Africa, presented the three products, all of which offer savings and/or credit services, along with the regulatory context in which they are being implemented, the different stages in the product design and the various challenges encountered. These very successful products have enabled the Commercial Bank of Africa to move from sixth to first place among Kenyan banks in terms of client portfolio.
The aim of this workshop was to create a dynamic within the WAEMU financial ecosystem in which the regulators promote initiatives that are implemented by private sector actors, with the technical assistance of MM4P. MM4P also shared with the audience its plan to launch a request for application for the selection of financial and mobile partners to support the emergence of a digital credit and savings products adapted to the needs of clients in Senegal.
Objective achieved! At the end of the day, the participants went home with a clear vision of the challenges they face on their journey in digital finance route the opportunities available to them.
Pour lire en français cliquez ici.
Un clic et s’en va
Dans les locaux de La Coopérative Autonome pour le Renforcement des Initiatives Économiques par la Microfinance (CAURIE-MF) les agents de collecte se préparent pour les Bancs Villageois (BV). Le BV est une réunion de 30 à 100 femmes issues de groupements communautaires de base suite à une auto sélection et qui bénéficient de produits de microcrédits et d’épargne reposant fondamentalement sur la gestion participative et sur la caution solidaire à travers les mécanismes de groupes de solidarité.
La préparation de ce matin est exceptionnelle car elle dure à peine 10mn. Les agents, munis de tablettes se connectent au serveur de l’institution pour extraire et sauvegarder les données dont ils ont besoin pour la collecte du jour, de manière à pouvoir y accéder sans connexion Internet. Nous sommes loin des jours où il fallait venir la veille, s’installer dans la salle des archives pour trouver le dossier du groupement à visiter, rechercher le dernier rapport de réunion et imprimer des pages et des pages à remplir sur place.
Le programme UNCDF MM4P accompagne l’institution dans son projet de finance digitale par l’acquisition de quarante tablettes, le développement d’une application mobile adaptée et un soutien technique pour son implémentation. Sur le terrain, le parcours des agents de collecte est simplifié et les bancs villageois prennent une autre tournure. Au village de Beyti Rip, à une quinzaine de kilomètres de Louga, nous avons pu assister en temps réel à l’impact de l’utilisation de la tablette sur le travail des agents.
Sous l’arbre à palabre, environ 33 femmes sont rassemblées sur des nattes, livret à la main. Face à elles siègent leurs représentantes, à côté des agents de CAURIE-MF. La séance est ouverte par l’amendement du rapport du précèdent BV, la mise à jour d’informations administratives, puis les femmes passent tour à tour pour rembourser leurs crédits d’abord et alimenter leur épargne. Deux agents sont mis en situation, l’un utilisant la méthode traditionnelle du remplissage à la main et l’autre la tablette. La tablette permet d’enregistrer une transaction en quatre secondes contre cinquante pour le remplissage à la main. Le gain de temps ainsi enregistré est considérable et a des répercussions positives sur tout le processus. Chantal Tine, agent de collecte nous confie :
Grâce à la tablette, je vais au banc villageois sans stress. Je prépare mes réunions le jour même. Sur place, je ne fais que cliquer. Je ne calcule plus, la tablette le fait automatiquement et je ne passe plus des heures à remplir des fiches, avec des risques de me tromper, de faire des ratures et devoir tout recopier. Et mieux une fois que j’ai fini mon BV, je rentre à la maison. Plus besoin de retourner au bureau pour vérifier et faire saisir mes données
CAURIE-MF s’est fixée pour objectif de contribuer durablement à la promotion économique et sociale des micro-entrepreneurs pauvres, principalement les femmes, en leur offrant des produits et services financiers appropriés. Digitaliser la collecte des BV est un premier pas dans l’atteinte de cet objectif. En effet, l’utilisation de la tablette permet de réduire considérablement la mobilisation des ressources humaines et logistiques, ainsi que les charges d’exploitation, tout en augmentant l’efficacité opérationnelle. L’institution peut ainsi mieux servir ses clients tout en leur permettant de gagner du temps. Le Directeur de CAURIE-MF Mamadou Gueye nous a expliqué :
Depuis 2013, nous parlons de digitalisation chez CAURIE. Nous nous sommes très vite rendus compte que c’était une étape obligatoire pour la pérennité de notre institution. Notre première tentative n’a pas abouti. Mais pour ce pilote avec MM4P, les résultats sont au-delà de nos espérances. Nous voyons nettement la différence que peut apporter l’utilisation de tablettes aussi bien sur la sécurisation des données, que sur l’économie de papier, d’encre, de temps et l’allégement du travail des agents de collecte qui peuvent enfin consacrer plus de temps à l’éducation financière de leur BV. Et surtout nos procédures de clôture comptable sont beaucoup plus rapides. Ces tablettes constituent un véritable atout pour l’amélioration de notre rentabilité.
Le projet est en phase pilote jusqu’en septembre 2017, le temps de mieux adapter l’application aux besoins des agents. L’enjeu est de passer au tout numérique à partir de cette période pour mieux mesurer l’efficacité de la tablette. En attendant, les agents, pressés de jeter le papier aux oubliettes, prennent leur mal en patience.
Au-delà de ce projet, CAURIE-MF entrevoit d’autres perspectives sur la route de la finance digitale. On parle déjà des projets de sms banking pour informer les clients et de partenariat avec les opérateurs de téléphonie mobile pour intégrer leur plateforme de paiement et permettre aux clients de rembourser leur crédit à distance. « Nous sommes résolument engagés dans le digital, car si on ne suit pas le mouvement, nous serons laissés en rade en cette ère du tout numérique. Avec des partenaires comme MM4P, nous sommes confiants » a conclu M. Gueye.
Par Sabine Mensah et Bery Kandji, UNCDF MM4P au Sénegal
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Collection agents are preparing for a village savings and loan association (VSLA) meeting at an office of the Coopérative Autonome pour le Renforcement des Initiatives Économiques par la Microfinance (CAURIE-MF – Independent Credit Union for the Reinforcement of Economic Initiatives by Microfinance). A typical VSLA meeting gathers 30 to 100 women who are self-selected from community-based organizations. The women benefit from micro-credit and savings products that incorporate participatory management and joint guarantees and that work through solidarity groups.
Preparations for this meeting are remarkable because they barely last 10 minutes. The agents, armed with tablets, connect to the institution’s server to extract and download the data they need for the day’s collection, so that they can access the data without an Internet connection. They are a long way from the days when agents had to arrive the day before a meeting, set themselves up in the filing room to find the folder for the group they were visiting, locate the latest meeting report and print off reams of forms to complete while they were in the field.
The United Nations Capital Development Fund (UNCDF) programme Mobile Money for the Poor (MM4P) is supporting CAURIE-MF in its digital finance project by purchasing 40 tablets with an appropriate mobile app and by providing technical support for their implementation. Life is simpler for the collection agents in the field, and the VSLAs are forging a new path. In the village of Beyti Rip, about 15 kilometres from Louga, MM4P staff witnessed first-hand the impact of using tablets on the agents’ work.
Around 33 women gather on mats, savings books in their hands, beneath the ‘Palaver Tree’ (a designated community meeting place, traditionally under a large tree). Their representatives sit opposite them, next to the CAURIE agents. The session opens with amendments to the report of the previous VSLA meeting and updates of administrative information. Next, the women take turns to first repay their loans and then to add to their savings. Two agents process the transactions—one using the traditional method of filling out the paperwork by hand, and the other using the tablet. It takes 4 seconds to record a transaction on the tablet, compared to 50 by hand. A significant amount of time is saved, positively impacting the entire process. Collection agent Chantal Tine shares,
Now that I have the tablet, the VSLA meetings are no longer stressful. I can prepare the session on the same day. Once I’m there, I just have to click. I’m no longer doing the calculations because the tablet does them automatically, and I no longer spend hours filling in forms, with the risk of making a mistake, having to cross it out and then copying everything out again. And better yet, once I’ve finished, I can go home. I no longer need to go back to the office to double check and get someone to enter my data.
The objective of CAURIE-MF is to sustainably contribute to the economic and social development of poor micro-entrepreneurs, mainly women, by offering them appropriate financial products and services. Digitizing collection at the VSLA meetings is a step towards achieving that objective. In fact, using tablets significantly reduces the human and logistical resources needed and keeps operating costs down, while increasing operational efficiency. It also helps the institution better serve its customers by saving time. CAURIE-MF Director Mamadou Gueye explains,
We’ve been talking about digitization at CAURIE since 2013. We very quickly realized it was an essential step to ensure the institution’s long-term viability. Our first attempt was unsuccessful. But the results of this pilot with MM4P are beyond our expectations. We can clearly see the difference made by using tablets in terms of data security, saving paper, ink and time, and reducing the workload of the collection agents, who can finally spend more time on financial education for their VSLAs. Above all, our account closing procedures are much faster. The tablets are a real asset in terms of improving our profitability.
The project is in the pilot phase until September 2017, to allow time for adaptation of the application to the agents’ needs. The challenge, going forward, is switching to digital only and concretely measuring the effectiveness of the tablets. In the meantime, agents who are keen to consign paper to the history books have resigned themselves to waiting a little longer for their turn on the tablets.
CAURIE-MF sees other prospects for digital finance once this project is completed. There is already talk of SMS (short message service) banking projects to keep customers informed, and partnerships with mobile phone operators to integrate with their payment platforms and allow customers to remotely top up their credit. “We are absolutely committed to digital technologies, because if we don’t keep up, we’ll be left behind in the digital era. With partners like MM4P, we’re confident we can do it,” concluded Mr. Gueye.
By Sabine Mensah and Bery Kandji, UNCDF MM4P in Senegal
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Agents—The revolution on the ground in Lao PDR
The mixed emotions of excitement and nervousness would be the best way to describe how new branchless banking agents feel in the Lao People's Democratic Republic (Lao PDR). For many prospective agents, who humbly regard themselves as rural, less-educated people, having the opportunity to work with the country’s largest bank is an unusual, unexpected opportunity.
In June 2015, one of the country’s leading banks—Banque pour le Commerce Extérieur Lao Public (BCEL)—launched a new concept in banking for the country: branchless banking through agents, a service the bank branded as BCEL Community Money Express (BCOME). The project was supported by United Nations Capital Development Fund (UNCDF), its national implementation programme Making Access to Finance More Inclusive for Poor People (MAFIPP) and PHB Development, from concept through pilot and on to commercial launch. Today, BCOME has more than doubled the size of the BCEL branch and service unit network, and with more than 125 agents, it is represented in every province of the country.
One of the most outstanding agents in the country, Nouteng Sybounheueang of Souvannaphoun Village in Paklai District, briefly shared her story:
First, I was worried [that] I did not make the decision right away when the staff of BCEL approached me about being an agent. I just replied to them that I needed time to think about it. And in my thoughts, I started to wonder how can one walk into my shop and offer me such a big job? Being a bank’s agent, how much money would I have to have? What kind of tasks would I be dealing with? I am only a low-educated rural woman, running a small shop selling miscellaneous goods, and I had never touched a computer or iPad.
After taking a night to think it over, Mrs. Sybounheueang called bank staff the next day to confirm her interest. She then spent two weeks preparing the agent documents, to apply and to be approved. After that, she transformed a storage room for her goods into her new office. She purchased a laptop and a printer as required by the bank, though as she completed primary school only, she did not know how to use them. However, the BCOME team arranged a one-day training at her place on how to use the computer, how to access the BCOME system and how to conduct transactions for her customers.
Mrs. Sybounheueang was among the first few BCOME agents registered in July 2015 when the project was still in its pilot phase. Since that time, BCEL has expanded the BCOME agent network across the country, with over 128 agents in every province and a target of 410 agents by the end of 2019. Yet, the quantity of agents is less important to BCOME than the consistent, high-quality service that agents must deliver. As the agents are the face of the service and there is a reputation risk to the bank for non-compliance, the quality of the service should be its first priority.
BCEL supports its agents in several ways, such as the service system, technical and operational training, marketing and publicity material, and encouragement of the agents to do conscientious self-promotion, carefully focusing on three components of performance: trust, high visibility, and location.
A successful agent like Mrs. Sybounheueang attributes her success to these three attributes but primarily to the trust she has from her customers and the bank. She knows how to use the promotional material (brochures and posters) that the bank provides, and she speaks to her community about the value of the BCOME service and the convenience it can offer them. Situated on the main road, her location is premium and highly visible. Her converted storage room serves as a dedicated BCOME service office, providing her customers a comfortable environment to conduct their transactions. She is now involved in supporting the construction of a new market for the region that is only 100 metres away from her agent location. When completed, the market will attract more customers to transact at her location.
Agents in different parts of the country serve communities with different standards of living and different circumstances. Khaek Phanthalath, an agent in Ban Tha Kok Hai, Pak Ngum District (a village about 50 kilometres from a city), explained that the transaction type that she deals with the most is receipt of remittances. People from other provinces send money to their parents or relatives who live in the village or nearby, and they come to get the money at her shop. In contrast, Mrs. Sybounheueang, the agent from Paklai District, mostly serves customers who send money to their children who are studying in the capital or other large towns. Another agent, who represents BCOME in the busy and crowded capital of Vientiane, handles more business-related transactions.
These various use cases and requirements from different communities are carefully considered by the BCOME development team, as Nanthalath Keopaseuth, Deputy Director at BCEL, explained, “Sometimes our development team even thinks that we should modify the specific product to meet the particular need of each province and locality. This is a subject that we are thinking about for the possible development of our service—we keep thinking how we can create the best product to fit the rural community.”
It is noticeable that most BCOME agents are women—women who have a business to manage, who hold a lot of responsibility in their family and who are eager to support their community. All are happy to bring the service to their village and provide more convenience for their relatives and fellow villagers, to save them the time and money of travelling a long way to a city to complete their transactions. For farmers in their village, the agent’s extended service hours, from early morning until late in the evening, help them so that they are able to focus on production and not lose valuable time conducting transactions; they can stop by and do the transaction whenever is convenient. Suddenly banking is easier and less stressful.
The commission is not the only benefit of being a BCOME agent. Agents also build friendships and share convivial moments during their work day. They also benefit from the prestige conferred on them by the brand of the first commercial bank in the country, giving them considerable standing in their local community. And, the new, efficient service of BCOME draws in more customers to agents’ existing business location; it helps their existing business grow.
BCEL has brought the new age of banking—branchless banking—to Lao PDR with a service that relies on local people becoming engaged as agents to serve their own community at their community members’ doorstep. BCOME is designed to help a new group of customers, who have until now been unfamiliar or even unaware of financial and banking services, experience these services and benefit from them. In fact, BCEL has discovered just how much money flows from people in remote, rural areas to the capital city of Vientiane and other main cities, for their children’s education, for their families and for their commercial needs.
With their enthusiastic approach to providing accessibility and to helping support growth of their communities, agents are raising the awareness of villagers (e.g., through careful self-promotion at their agent location) and educating them about the low risk, inexpensive cost and speed of the new system. BCEL supports agents with periodic awareness-raising campaigns to promote overall services of the bank, while focusing attention on the agents as the primary source of the service in the community.
As Mrs. Sybounheueang summarized, “I can give them friendly advice to use this new service—it is convenient and safe. Before they sent money to their children by a bus driver. Their children would come to pick up the money at the bus station, but they had difficulties with timing and missing the bus. It was high risk. Now more and more come to use my service. They like it here because some of them feel uncomfortable to go to the bank branch.”
June 2017. Copyright © UN Capital Development Fund. All rights reserved.
The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNCDF, or their Member States.