MICROCAPITAL BRIEF: Nigerian Tech Firms SystemSpecs and Maxim-Pro Release Memorandum of Understanding Targeting Microfinance Bank Enhancement

SystemSpecs, a software development firm founded in 1991 and headquartered in Lagos, Nigeria [1], and Maxim-Pro, a Nigerian financial technology firm [2], recently released a joint memorandum of understanding (MOU) expressing their commitment to the development of a technological infrastructure for Nigerian microfinance banks [3]. In March 2010, the two companies released Remita, an e-payment service for microfinance banks [4]. The service is currently used by 125 microfinance banks in Nigeria. A September 2008 World Bank report documented 840 microfinance institutions in Nigeria [5]. Of these, only seven have reported to MIXMarket, the microfinance information clearinghouse, for 2008 [6].

Mr Raza broke these branchless banks down into three separate models. The first model is based on kiosks operating from existing retail locations. As an example, he mentioned a partnership between Habib Bank Limited (HBL) [3], founded in 1947 and based in Karachi, Pakistan [4], and the Pakistan Post that has reached 40,000 rural borrowers through 68 kiosks [5]. The second model is based on telephonic networks, and is exemplified by Easypaisa, a partnership between Tameer Microfinance and Telenor founded in October 2009 [6, 7]. Mr Raza stated that this program has reached 25,000 people, who have transacted PKR 4 billion (USD 47.6 million). Finally, Mr Raza detailed the third model, where existing banks offer branchless services. MCB Mobile, a partnership between MCB Bank and Fundamo [8], follows this model and now reaches 60,000 customers transacting PKR 1 billion (USD 11.9 million) [1]. Any institutions falling into these categories can now apply for microfinance banking licensure through this legislation.

Mr Raza stated that this legislation may catalyze Pakistan’s adoption of technological banking solutions. He stated that 46.4 million e-payments totaling PKR 4.1 trillion (USD 488.9 billion) during the last quarter of CY 2009. In the future he expects growth, noting that while 15 percent of Pakistanis have bank accounts, 56 percent have cell phones [5].

By Matthew Castner, Research Assistant

[1] The International News: “Branchless Banking Conference,” Shahnawaz Akhter, April 18, 2010, http://www.thenews.com.pk/daily_detail.asp?id=234732

[2] The Nation: “SBP chief to open Branchless Banking Conference on 17^th,” April 10, 2010, http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/10-Apr-2010/SBP-chief-to-open-Branchless-Banking-Conference-on-17th

[3] “Bringing Finance to Pakistan’s Poor: Access to Finance for Small Enterprises,” by Tatiana Nenova, Cecile Thioro Niang, and Anjum Ahmad, World Bank Publications: November, 2009.

[4] HBL: “About Us,” http://www.habibbankltd.com/about-us.php

[5] Daily Times: “Pakistan Branchless Banking Conference,” April 18, 2010, http://www.dailytimes.com.pk/default.asp?page=20104\18\story_18-4-2010_pg5_1

[6] Mobile Money for the Unbanked: “Tameer Microfinance Bank and Telenor Provide Insights on easypaisa,” by Paul Leishman, Jaunary 5, 2010, http://mmublog.org/asia/tameer-microfinance-bank-and-telenor-provide-insights-on-easypaisa/

[7] MicroCapital “MICROCAPITAL.ORG STORY: Communications Company Telenor Pakistan Launch Mobile Banking Service with Tameer Microfinance Bank, ” by Christopher Maggio, October 27, 2009, https://www.microcapital.org/microcapitalorg-story-communications-company-telenor-pakistan-launch-mobile-banking-service-with-tameer-microfinance-bank/

[8] Mobile Money for the Unbanked: “Pakistan’s Shared Platform: An Interview with MCB and Fundamo,” Paul Leishman, April 1, 2010, http://mmublog.org/asia/pakistan%E2%80%99s-shared-platform-an-interview-with-mcb-and-fundamo/

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