Nigeria Mobile Marketing

Citizens of the world,woke up on the 12th of January to find the country of Haiti under the ruins, due to the effects of devastating earthquake.Thousands of people were reported killed and many still unaccounted for and millions are without food,water,medicines and shelter.

Matching action with words,President Obama made pledges and millions of dollars donations flowed in from all around the world. From the Big corporate donors to the very ubiquitous Mobile Phones,they all proved that the world is now a connected place,where commerce can take place,anytime and anywhere.As at the last count, donations from Mobile phones alone already exceeded 24million USD with more than 2.5million people texting $10 for the Haiti relief efforts which is added to the monthly bill.Small donations are making big impacts in Haiti.

I spoke with many Africans,Living in Africa if they made any donations towards the Relief efforts of our Brothers and Sisters in Haiti,the answer was negative with only a few positives from Kenya and South Africa(This is withing the circle of personal influence / friends and not postulating a general trend for Africans). Safaricom,MPESA’s parent company had set up a donation account for Kenyans to make donations via Mobile Money platform,MPESA.

The Main reason for not contributing to the donation is that they have ability to donate between 1 – 10 USD (willingness) but they do not have the means ( access ) to make such small value transaction,cheaply without having to travel to a Bank, stay on queue, leave their Jobs for hours, travel to next town to visit the Bank but they all have a Mobile Phone,actually conducted this short interview via mobile phone telconference and SMS,talking to 35 people in seven countries.

When Final donation statistics are taken,Africa will most likely record least contributions to a country that is more connected to them,racially and Historically than any other Nation on the face of earth.This is our score card,not because we lack capacity for kindness and Love but we lack the ability to share Love using simple technologies like mobile payment.

If you are living in countries where these services work, kindly make your donations to the Haiti Relief efforts by sending your donations to the following organizations Via your Mobile Phone:

• Kenya Red Cross Society via MPESA – Business Number 508000
• ACLJ – Text ACLJ to 90999 to give $10
• Compassion International – Text DISASTER to 90999 to give $10
• Family Health International – Text FHI to 90999 to give $5
• FAMU – Text RELIEF to 50555 to give $5
• Florida Hospital – Text MISSION to 90999 to give $5
• Friends of the World Food Program – Text FRIENDS to 90999 to give $5
• Leon H. Sullivan Foundation – Text SUMMIT to 90999 to give $%
• Rotary Foundation – Text ROTARY to 90999 to give $5
• United Nations Foundation – Text CERF to 90999 to give $5
• United Way – Text HAITI to 864833 to give $5

You may also visit http://haiti.ushahidi.com,powered by Clickatell to Donate, Volunteer, Submit a Report, Track Information, Register Missing Persons, and Receive SMS alerts

Kindly send New Links to Mobile Phone / SMS donations initiatives to the Editor for publication.Thank you

Emmanuel Okoegwale
emmanuel@mobilemoneyafrica.com
+234 8030818868
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Branchless Banking which has long been promoted in the Nigerian Banking Landscape as the new frontier to reach the Unbanked populations seems to be limited to the roll out of ATM ( Less than 12,000) and online Banking. Beyond these, no significant efforts had been made to truly launch Branchless Banking despite the strong compelling evidences that it is cheaper and faster to launch Agent assisted Branchless Banking against Branch Banking roll out.


It will only be wishful thinking that the Banks will turn profitable at some Branch locations in Nigerian because the services available at those Branches are not relevant to the target market and deploying resources to make profit from a non -existing market will be akin to waiting for a dead man’s shoes. Activities at many Branches can be handled by a group of merchant outlets in same locality, cost effectively and efficiently using secure technology and cash kitty of merchant outlets owners.


2009 would go down as the year that unmasked the behind the scene dealings at some Banks in Nigeria which was brought about by alleged poor management practices and global economy crisis. Some leading players are already making significant efforts to regain market share and work their ways back to profitability. As the Banks try to steer their acts back to profitability, staffs are losing Jobs, Branch roll outs are slowing down, Credit lines are drying up and even some unprofitable Branches may be shut down in coming months.

Financial services are profitable ventures, all over the world and cannot afford to provision services like Public service enterprises. The incentive to remain in Business is largely influenced by the outcomes of rewards against the risk.To remain competitive, Banks are therefore undertaking the drastic measures to save cost, run a lean and effective work force and limit Branch roll out. Good as it may sound, the negative outcomes of all these would mean that more people will be left out of formal Banking services as services may not reach the underserved communities in near future. The Nigerian Unbanked populations in their millions are still left at the mercies of informal saving schemes as Banks do not seems to have a clear and sustainable plan of engagement for these group of people.


Technology can enable Banks and their customers to interact remotely in a trusted way through existing retail outlets like Gas stations, Eateries, corner stores etc. Examples abound where Banks use agents to reach their customers. In Brazil with over 100,000 Banking agents and Kenya with over 12,000 agents. Working with a group of close to 20 Agent Network managers, Lemon Bank in Brazil has more than 6,000 Agent point Network without a single Bank Branch and it is more profitable than Banks with mega structures and Branches.


With the CBN regulation on e-money that permits the use of agents, the Banks are now empowered to explore opportunities that where beyond grasp, prevously. The unbanked can now be targeted with products and services that best fit them in their own environments.


Having competed extensively on ‘How we compete syndrome’ (Look alike products, cluster Branch roll outs) of the Banking sectors, the Banks will be faced with unfamiliar foes and Behemoths in coming months. Mobile operators are eyeing the Bank’s uneaten pie, The Unbanked millions at the Bottom of the pyramid. Banks compete on niche segment basis and a few deep pockets customers can influence or even determine profitability but for the telcos, niche segments don’t work for them.

With 70 million subscribers under their kitty and the on-coming launch of mobile money by the likes of MTN,Glo and Zain in coming months, the chances of Financial institutions getting to the unbanked becomes more challenging measured against the deep marketing budgets, spread and knowledge of mobile operators in managing low value, high volume business platforms. For the Banks, it may mean, Live and lets die, if they don’t brace up to the charging Behemoths.


Emmanuel Okoegwale
emmanuel@mobilemoneyafrica.com
www.mobilemoneyafrica.com

According to the Dfid and other world economic organizations, significant numbers of Africans are still not enjoying formal Financial services of any form or at any level. This lack of access can significantly hold back progress on the Millennium Development Goals and restricts the degree to which poor people can benefit from the economic growth currently being enjoyed by many developing countries and in these challenging times of Global Financial crunch, it will help deepen the numbers and not improve it.

The major focus of Financial Institutions across Africa is to get out of the quagmire and they are not focusing, intentionally on the unbanked which still hold a significant chunk of the cash in the economy underneath their Bed pillows.In Nigeria and Ghana, less than 30 percent of the population are Banked.

Is it that they don’t want to engage them? Of course the do want to but they do not have a clear cut strategy to engage them. Mobile is the easiest and cheapest channel to engage, these millions of people.

The Mobile penetration in Africa is a success all across countries in Africa and more than 90 percent of phone users are mobile by technology while growth rate is predicted to continue as more Cities, towns and villages are covered by Mobile operators in the next few years.

The huge disconnection with the mass financially excluded Africans and Financial services can be bridged within a reasonable turn around time using the Mobile phone which in some cases, is the first technology tool that some Africans ever owned and a trusted means of conducting Businesses and reaching out to loved ones.

To make it work, International funding organizations will have to look beyond the financial institutions which in most cases, do not have a clear cut strategy for Mobile money, Mobile Operators with limited knowledge of Finances. The Ecosystem should be geared towards a creating local enabling environment, country by country that will tackle the obstacles to independent Mobile Money providers, educating regulators on the know-how, promoting entrepreneurs that are ready to take the risk to open up the sector and lay a sustainable foundation that will help it strive and achieve the dream of Financial inclusion for the Masses in Africa.

Without the directions of such knowledgeable bodies, most African operators and Banks will opt for what they had seen worked elsewhere, like MPesa but the reality is that, despite the success in Local Kenyan Market, the conditions that made it happen may be absent in other countries. In Mobile Money,there is no one size fits all technology.

While some technology may be Operator dependent or stand alone,likes of Fundamo, some others like NSDT of Tagattitude are Bank and Operator Independent, Txtnpay in West Africa, works with Banks and also,stands alone.

Africans deserve the best, having waited for so long. All stakeholders’ agenda setting should be the next focus and It is my sincere believe that some of these will be raised at the upcoming, MMT 09 conference at Dubai.




Emmanuel Okoegwale
Editor - MobileMoneyAfrica
emmanuel@mobilemoneyafrica.com


Mobile Money Directory :http://tinyurl.com/yhzmrle

Nigeria with 24million debit cards, 5 Mobile Operators and 7 CDMA operators with total subscription of 62 Million under an addressable market of 140 Million people is the largest market for Mobile telephony in Africa.

Despite the successes recorded in the financial sector in recent years and spread of 25 mega Banks with over 9,500 Bank Branches and 11,000 ATM points, Financial Inclusion is still limited and not widely available for Millions that are still left behind. As Potential Mobile Money providers across the Globe eye the Largest Mobile market in Africa for mobile payments technologies, there is a strong compelling need to provide credible and evidence based information and Data for Technology providers, Financial Institutions, Regulators, Researchers, scholars and Investors in the evolving ecosystem.


MobileMoneyAfrica, in coming weeks will conduct Perception surveys in selected states across the Federal Republic of Nigeria with a view to understand the potential drivers of Mobile Money, transactional services that will drive uptake, potential users demographics across different social and occupational groups, access, End user costing metrix and other relevant information that are needed for decision support in the industry.This is the first in the series that will take us to other parts of West Africa in the short term.

The outcomes of the survey will help Financial Institutions and Mobile payment providers to competitively position their products and services in the evolving ecosystem.

Subject matter experts and researchers in the domain area are welcome on board to provide guidance and directions.

Institutional support, potential Partners and survey sponsors can email me at: emmanuel@mobilemoneyafrica.com or call +234 803 0818 868.

http://mobilemoneyafrica.com/archives/405

Mobile phones can enable Banks and their existing and new customers to interact remotely in a trusted way through local retail outlets like the super markets,Gas stations,lottery points, post offices and even airtime dealers.

Banks lean towards confining themselves within clear industry boundaries, they tend to compete on matching and beating rivals and the result are strategies that converge along same basic dimension of competition but telcos compete across industries , communications, media and now finance. Telcos are breaking the acceptable boundaries of competition by tapping into mobile money landscape. For the Banks in the Mobile Money Landscape, the strategy is, ‘it is our beer, we deserve a sip but for the telcos, the beer barrel is ours’.

The entrenched ‘How we compete’ syndrome is taking the African Banks eye off the target, the Unbanked populations. Since telcos don’t seems to be very rigid on same principle, they are ready to explore what should ordinarily be the sweet pot for the Banks.

The MNO’s (Telcos) seem to understand clearly and at an early stage the Four Horsemen – Reach, cost, regulation and technology , that are critical to the success of deploying Mobile Money platforms in Africa to meet the needs of the Unbanked millions while the Banks were still groping in the dark. Why is this so? Both are customer facing enterprises but with different value systems that pushed one ahead of the other, but for how long?

Banks are driven by specific customer and segment profitability measures within defined geographical boundaries with aversion to low margins ventures like mobile money which are treated more as supporting key segments rather than as a way of reaching new ones. Telcos are low margin, high volume engines with extensive infrastructure in a more competitive industry than Banks in Africa. For a Bank, a few deep pocket customers can determine profitability but for a telcos, customer niches don’t work for them.

Horseman number one – Reach

Telcos usually operate extensive networks within National boundaries and external Boundaries. Few Banks in Africa are widely spread out like the MTN or Zain in Africa apart from few Banks like Standard Bank, Ecobank,UBA and a few others.
Telcos while not shouting about it, operate some of the most elaborate retail systems and touch points in most countries.

In a country like Nigeria, the dominant Mobile Operator, MTN, retails the pre paid card through more than 500,000 airtime dealers, agents and stores that are not owned by them. Over the years, they had mastered the art of low value, high volume business environments and working through independent agents as potential Mobile Money agents will be a walk in the park.
The Banks on the other hand has little or no experiences in working through agents, though the newly released Mobile Money guidelines in Nigeria, now supports it.

In event of Banks trying to manage agent networks the way telcos do, is to attract failures. Telcos are masters at managing large retail networks of pre paid airtime agents with strong internal control mechanism.

Elsewhere, Banks had successfully worked through agents. Lemon Bank in Brazil has more than 5,000 agents without a single Bank Branch, Banco Bradesco uses the post offices, Equity Bank in Kenya works with Nakumatt retail stores. In Peru, Banks operate more than 3,000 networks of Banking agents.

Cross Border, Mobile Operators tend to ‘stick’ with a technology and modify it to existing regulations and run with it, across Geo Boundaries, MTN and Zain are doing this, all over Africa. Banks tend to look for, what is working in those countries and adopt it, accordingly.

To be continued

Emmanuel Okoegwale
emmanuel@mobilemoneyafrica.com