Reaching the unbanked in a MobiKash World

Duncan Otieno

Duncan Otieno an entrepreneur with business interests in IT and Software development, Media, Education and Events is thorough in his field. The Co founder and CEO MobiKash Afrika Limited overseeing the rollout of MobiKash projects across Africa believes that getting money into your hands should not be a challenge to face in this fast paced time. Duncan has an extensive wealth of experience and knowledge in commercial banking, Microfinance institutions, payments systems, risk management, audit, strategic management and accounting. In this interview with MobileWorld, Duncan, who has worked in the banking industry for over 11 years in various senior management positions, brings insight into the credibility of his project, uniqueness, expansion, challenges and projections. Excerpts…

Congratulations on the launch of MobiKash. Can you shed light on what MobiKash is?

MobiKash Afrika Limited (“MobiKash”) is an independent mobile commerce provider offering mobile money transfer, mobile banking and mobile payments. MobiKash works across all mobile network operators, across all participating banks and across all merchants. MobiKash allows every one of its users in Kenya to manage and perform a wide range of financial transactions from their mobile phone and other channels, such as the Internet, POS terminals and ATMs. MobiKash links directly with Banks, MFIs, SACCOs and Bill Issuers/merchants. MobiKash allows users to link up to a total of 15 bank accounts from among participating banks. The MobiKash model also allows bank customers to conveniently withdraw cash directly from their bank accounts at the MobiKash agent outlets without having to reveal their bank account details to the Agents. MobiKash thus allows interoperability between various players in the financial and payments industry.

Also being pioneered by MobiKash is the universal low cost bank account opening facilitation for the unbanked (“POPOTE ACCOUNT”) from the MobiKash agent outlets. The agents are trained through one/single process to handle multiple banks hence reducing the operational costs to the agent and the banks in terms of resource mobilisation and infrastructure investment. The MobiKash model’s capability directly compliments the Kenyan Government’s desire to develop agency banking services throughout the country.

How long did you pilot this project to be sure of your credibility in both technology and logistics?

MobiKash was approved by CBK to conduct a Pilot in April 2010, the integrations with the approved three partner banks took five months with the commercial live pilot officially activated in September 2010 and the official commercial launch in July 2011

Who are your partners?

The key current partner banks include; National Bank of Kenya as the lead bank, Postbank and Transnational Bank. More banks are expected to be added to the network beginning August 2011. The other Partners in the MobiKash model are the merchants, Agents, mobile network operators.

What are the unique features that MobiKash has compared to other competitors?

MobiKash is an open independent mobile commerce ecosystem; seamlessly integrates with all partner systems. MobiKash service works across all banks, all networks and all merchants. It allows real time settlements between all participating parties; that is, the customers, banks, bill issuers and merchants without having to invest in additional resources to settle with the other parties on one to one basis.

Another unique feature is that Mobikash allows customers and participating banks customers to conduct withdrawal from any of the MobiKash agent outlets without having to show their bank account details, is very secure and manages the customer confidentiality at advanced level.

Also, MobiKash agents are trained in one process to handle MobiKash account customers, all participating bank customers, bill collection and many more, with these model agents are not confused with multiple processes for different players in the agency banking process. It allows the customers to choose their preferred source of funding or transfer or paying bills, allows customers whose mobile accounts are full to automatically transfer the excess funds into their linked bank account (sweeping arrangement) and allows customers the freedom to choose a bank account from any of the participating banks when opening a new bank account. This is achieved through the POPOTE account product

 How many Agents do you currently have?

Over 3, 000 agents who have already been contracted and are currently being activated after this launch, all these are expected to be fully activated by year end. MobiKash also plans to enlist more agents across all the 47 Kenyan counties in the next six months.

 What have been your challenges so far?

Customers were not aware of the product hence adoption rate was too low during the pilot period. The Agent outlets numbers are still not at the standards that the customers expect comparing with what is already available in the market. Regulation process was equally too long, but it was a very positive process

Do you have any plan to expand to other African countries?

Plans are in progress in expanding to at least nine African countries by end of 2012

What advice do you have for countries that are yet to kick off in Mobile Money Services?

The adoption rate of Mobile phones in world is growing exponentially, as more people use the mobile phones, the trend is towards consolidating all services via the mobile phones including mobile money, mobile banking and mobile payments and as such countries that has not embraced the mobile money services will be forced to adopt the service without regulation if such regulations are not in place. In line with this it would be prudent for such countries to align their financial regulation to the reality that the times for digitized money is here with us and if not harnessed on time it may explode through other unregulated channel, which could lead to money creation in the economy hence recipe for uncontrolled inflation.

In your opinion who should regulate the mobile money service- Telecom regulator or Central Bank?

The Central Banks are the ones in charge of the monetary policies and thus they are better placed in regulating money activities to avoid money creations which can lead to uncontrolled inflations.

The telcom regulators should play a key role of ensuring that the channels through which services are offered are secure.

Where do you see MobiKash in five years?

We see MobiKash in the next five years playing with the international or global mobile commerce space in at least 40 countries. The plans in building this network is already in progress.

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