“Agent Network Accelerator Survey: Uganda Country Report 2013;” published by Helix Institute of Digital Finance; January 2014; 26 pages; available at http://www.helix-institute.com/data-and-insights/agent-network-accelerator-survey-%E2%80%93-uganda-country-report-2013-0
This document presents the results of a study conducted by the US-based nonprofit Bill and Melinda Gates Foundation and India-based for-profit consultancy MicroSave that seeks to identify the challenges, trends and successes of the mobile money market in Uganda by surveying 2,000 agents. The authors conclude that most agents demonstrate workplace satisfaction including with their profits. Median monthly revenue for all agents regardless of geography is USD 136. The median monthly profit is USD 78 for agents operating in the Ugandan capital of Kampala, with approximately 11 percent of agents taking a loss. Agents working in rural parts of the country are less profitable than their Kampala-based counterparts, despite lower operating expenses. For reference, Uganda’s gross national income per capita is USD 95 per month. Approximately half of mobile money providers in Uganda had entered the market within the last year, and these demonstrate the lowest profitability. Agents report challenges including: (1) markets oversaturated with agents competing for the same clientele (2) risk of customer fraud (3) concern over personal safety from potential robbery (4) lack of communication with their affiliated mobile money provider and (5) unplanned system downtime. Unreliable service from network providers, which blocks the completion of transactions, has affected 92 percent of agents.
“Sustainable Microfinance: What Does it Take?”; published by MicroSave; February 2014; video available at http://www.microsave.net/resource/sustainable_microfinance_what_does_it_take
Microfinance institutions (MFIs) in India have experienced rapid growth in the past decade. Once the domain of non-governmental organizations (NGOs), the microfinance industry now boasts various for-profit financial service providers as well. Manoj Sharma, the managing director of the Asia-Pacific operations of MicroSave, argues that this shift has led MFIs to focus more on profits than their client’s financial well-being. He acknowledges that, while MFIs have limitations in their ability to reduce poverty, they can produce positive benefits for poor people. Mr Sharma also believes there is a lack of innovation in the range of financial products available to borrowers and MFIs must focus on branchless banking, microinsurance and non-financial services. Enhanced communication with clients via mobile phone is proposed. He argues that MFIs must harness the power of technology or face “extinction.” The sustainability of microfinance relies on increasing outreach to educate low-income clients about available financial resources. While Mr Sharma cautions regulatory agencies and donors to avoid “knee-jerk” reactions to volatility in the microfinance industry, he also insists that the microfinance agenda must be shaped, in part, by them.
“Mobile Money for the Unbanked: State of the Industry 2013;” written by Claire Pénicaud and Arunjay Katakam; published by Global Systems for Mobile Association (GSMA); 66 pages; available at: http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/02/SOTIR_2013.pdf
This report provides an overview of developments in the mobile money industry including the provision of services such as insurance, credit and savings. The authors state that the industry is growing, with 219 services available in 84 countries, mostly in Sub-Saharan Africa. There are 60 million active mobile money accounts as of June 2013, however the services have struggled with keeping customers engaged, as 70 percent of accounts are inactive. The two most popular mobile money products are top-ups to recharge subscriber airtime accounts and peer-to-peer (P2P) transfers. Bulk payments, which allow organizations such as employers or government agencies to make payments to large numbers of individuals via mobile money, are the fastest growing product. The authors argue that mobile money services can be a driver for financial inclusion as they reach those who may not otherwise have access to conventional financial institutions. At the end of 2013, mobile money accounts outnumbered bank accounts in nine markets in the study.
By Meraj Husain, Research Associate
About MicroSave
Established in Uganda with United Nations funding in 1998, MicroSave is a for-profit technical assistance, training and resource center that relocated its headquarters to Lucknow, India, in 2006 with support from India’s ICICI Bank. In 2008, MicroSave was transformed into a consulting company, which has since completed projects in India and eleven African countries.
About Global Systems for Mobile Association (GSMA)
Global Systems for Mobile Association (GSMA) is a London-based association of mobile operators and related companies that support the regulation, distribution and promotion of mobile telecommunication systems across the financial services, healthcare, media, transport and utility sectors around the world. As of 2014, GSMA’s members include approximately 800 mobile operators and approximately 200 software, mobile, technology, media and entertainment organizations.
Sources and Additional Resources
[1] Helix Institute of Digital Finance: “Agent Network Accelerator Survey: Uganda Country Report 2013,” http://www.helix-institute.com/data-and-insights/agent-network-accelerator-survey-%E2%80%93-uganda-country-report-2013-0
[2] MicroSave: “Sustainable Microfinance: What Does it Take?” http://www.microsave.net/resource/sustainable_microfinance_what_does_it_take#.Uz8yGK1dVwi
[3] Groupe Speciale Mobile Association (GSMA): “Mobile Money for the Unbanked: State of the Industry 2013,” http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/02/SOTIR_2013.pdf
MicroCapital, April 8, 2014, “Grameen Foundation Receives Innovation Grant from GSMA’s mWomen,” https://www.microcapital.org/microcapital-brief-grameen-foundation-receives-innovation-grant-from-gsmas-mwomen-2/
MicroCapital, November 13, 2013, “Gates Foundation, International Finance Corporation (IFC), MicroSave, United Nations Development Program (UNDP) Partner to Create Helix Institute of Digital Finance,” https://www.microcapital.org/microcapital-brief-gates-foundation-international-finance-corporation-microsave-united-nations-development-program-partner-to-create-helix-institute-of-digital-finance/
MicroCapital, August 16, 2013, “Western Union, eTranzact Launch Mobile Money Product in Nigeria,” https://www.microcapital.org/microcapital-brief-western-union-etranzact-launch-mobile-money-service-in-nigeria/
MicroCapital, April 10, 2013, “Virtual Terminal Network (VTN) VCash to Allow Mobile-phone Access to Western Union Money Transfers in Nigeria,” https://www.microcapital.org/microcapital-brief-virtual-terminal-networks-vtns-vcash-to-allow-mobile-phone-access-to-western-union-money-transfers-in-nigeria/
MicroCapital, January 15, 2013, “Securing the Silent: Microinsurance in India: The Story So Far” by Premasis Mukherjee, Rosalind Piggot and Sunil Bhat; published by MicroSave,” https://www.microcapital.org/microfinance-paper-wrap-up-securing-the-silent-microinsurance-in-india-the-story-so-far-by-premasis-mukherjee-rosalind-piggot-and-sunil-bhat-published-by-microsave/
MicroCapital Universe Profile: MicroSave
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MicroSave
MicroCapital Universe Profile: Global Systems for Mobile Association https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Global+Systems+for+Mobile+Association+%28GSMA%29
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/
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