Digitization, Inclusion and Access to Financial Services, Boniface Mungania

Digitization, Inclusion and Access to Financial Services, Boniface Mungania

• 1.
  C3 - SafaricomConfidential Internal Digitization, Inclusion and access to financial services. Boniface Mungania:Head of M-PESA Product Management,Safaricom PLC
• 2.
  C3 - SafaricomConfidential Internal In 12 years of M-PESA, Kenya’s formal financial inclusion has growth from 27% to 83% and 3rd highest in Africa. → M-PESA launch with P2P informed on existing habit 2007 - 2009 → Basic Payment services targeting by Utility bills 2009-2011 → Micro credit and savings and start of M-PESA Bank Integration 2012- 2013 → Merchants Payments service targeting large and small enterprises 2014-2016 → Integrations external ,Innovations and User experiences 2017-2018 2006 2013 2019 Financial inclusion • Formal - 26.7% • Informal - 32.1% • Excluded- 41.3% Financial inclusion • Formal - 66.7% • Informal – 7.8% • Excluded- 25.4% Financial inclusion • Formal – 82.9% • Informal – 6.1% • Excluded – 11% Fuliza
• 3.
  C3 - SafaricomConfidential Internal Today, M-PESA is Africa’s biggest financial services provider and payments platform… Greatest reach of any African Financial Services Provider 47% 11bn TRX 8.2bn TRX 8.4bn TRX 36m 21m24m 25% More transactions than PayPal or African card payments Source: GSMA 2018, McKinsey Africa Financial Services Report, eMarketer Others Next African MM player No 1 African bank African card transaction volume M-PESA transaction volume PayPal (Global) transaction volume M-PESA customers Global mobile money customers Global mobile money transactions M-PESA Others M-Pesa
• 4.
  C3 - SafaricomConfidential Internal Poverty reduction 27% 2006 83% 2019 Adult Population 21% 2006 80% 2019 Female Population 194k+ Kenyan households have been lifted out of extreme poverty thanks to M- PESA M-PESA gives users access to a wider social safety net to cope with financial shocks Gender Equality 100,000s of women moving from subsistence to starting their own businesses Women headed households using M- PESA save more Economic growth 350k+ agents and their employees uplifted through M-PESA 20,000+ businesses, NGOs and government agencies benefit from cashless collections and disbursements Capital Accumulation M-PESA users save more 81% use M-PESA as a savings tool * Source: “The long-run poverty qnd gender impacts of mobile money”, Tavneet Suri & William Jack, Science Magazine 2016 Formal financial inclusion The driving force for financial inclusion
• 5.
  C3 - SafaricomConfidential Internal M-PESA continues to expand its product range and customer relevance Money Transfer & Core Services Enterprise Payments Financial Services Mobile Commerce Vodacom Tanzania Vodacom Mozambique Vodacom Lesotho Vodacom DRC Safaricom (Kenya) • Agent deposit & withdraw • Person to Person (P2P) transfers and interoperability • International Money Transfer (IMT) • Bank to M-PESA transfers • Bill payment and collections • Disbursements (e.g. salary payments, social welfare, NGO cash transfer programs) • Micro-savings and loans • Overdraft facilities • Handset financing • Agent and merchant loans • Group savings and loans • Micro-insurance • Financial management tools • Merchant acceptance (in-store and online) • B2B payments and “cashless distribution” • Digital marketplaces • Loyalty and promotions • Ticketing • Global payments partnerships
• 6.
  C3 - SafaricomConfidential Internal … with expertise scaling across many diverse markets
• 7.
  C3 - SafaricomConfidential Internal M-PESA offers a compelling proposition for under-banked communities and small businesses Agent networkCustomer base Customer base • Ubiquitous • Trusted • Leverage Safaricom coverage • Only basic ID required • Rapid on-boarding • Expansion into a range of payments and financial services • Any phone • Reliable • Continuous innovation Brand Technology Platform PriceEcosystem & product range • Pay as you go • Affordable • Simple structure • 350k+ agents • Reach, liquidity, customer education
• 8.
  C3 - SafaricomConfidential Internal 46% of Kenya’s inward remittances flow through M-PESA and we are ahead of SDG 10.C target on remittance cost. Western union Partnership: Over 500K western union locations and Millions of Bank account globally East Africa: Mobile Money integration with MTN and Vodacom to serve Kenya,UgandaTanzania and Rwanda IMT HUBS Integration to 3 HUBS: MFS Africa, transfer To and Home send International remittances are critical to the livelihoods of hundreds of millions of people in the developing world, and mobile technology is one of the most exciting forces shaping how people send and receive them today. The revolution that M-PESA brought to domestic payments and cash transfers is now being repeated in international transfers. Already 20% of Inward remittances flow through M-PESA. This digitization is helping to reduce the costs of sending money internationally, our average cost is 1.7% and ahead of SDG 10. C target of 2030.
• 9.
  C3 - SafaricomConfidential Internal And we are leaving no one behind • Braille Watch enabled visually impaired customers to receive SMS notifications ,giving them privacy on their M-PESA and protect them against fraud.
• 10.
  C3 - SafaricomConfidential Internal How digital platforms can catalyze access and more inclusive communities in Ethiopia and beyond ?
• 11.
  C3 - SafaricomConfidential Internal Democratization of credit and elimination of barriers to access. √ Use on non traditional data for scoring √ Broadening access to millions √ Reduced cost
• 12.
  C3 - SafaricomConfidential Internal Distribution of digital financial services √ All retail banks in Kenya have M-PESA as the main cash in/out channel for their digital banking . √ Low cost models and better user experience.
• 13.
  C3 - SafaricomConfidential Internal Digitization enterprise and government payments . → Low cost models → Mobile is the payment card → Realtime settlement. → Faster check out Efficiency, better records ,customer engagements and reconciliations.
• 14.
  C3 - SafaricomConfidential Internal interoperability
• 15.
  C3 - SafaricomConfidential Internal Innovation End to end Solutions Open APIs to the developer community will spur innovation
• 16.
  C3 - SafaricomConfidential Internal Access to affordable essential services
• 17.
  C3 - SafaricomConfidential Internal Vital role in Cyber security √ STK Push instead of OTP.Extending the security of STK to banking Age on Sim swap API only transactions Out of band authentication Age of Sim √ To mitigate social enginerring.Sim swap is one the easiest way to access to customers account digitally √ Enabling banks to make informed decision when transacting based on customer’s age on GSM √ Minimizing human initiated txns through a dedicated API only Traffic.
• 18.
  C3 - SafaricomConfidential Internal Thank you