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BANKING THE UNBANKED: GOING BANKING THE UNBANKED: GOING MOBILE IN ETHIOPIAMOBILE IN ETHIOPIA

INDEX

Some Important Facts …..

Ethiopia has a population of 80 million people and expected to be over 120 million by 2030

The country has less than 1 bank branch per 100,000 people

Ethiopia is the fastest growing economy in Africa and 3rd fastest growing economy after India and China in the world

Despite the growing population and the growth in the economy merely 5% people have access to bank accounts

Geographical inaccessibility, lack of infrastructure, high cost of banking services and lack of financial knowledge are the major constraints

Africa has 230 million unbanked households – constitutes an enormous profit potential for banks and microfinance Institutes

Data collected from various sources

Where is the Gap?

Data collected from various sources

• Lack of proximity and ease of access to the Financial Services

• Lack of simplicity and speed in processing loans and low-balance savings account

• High cost of servicing within the traditional Brick & Mortar banking structure

• Basic financial education of information since the unbanked may not understand even elementary concepts of banking

Can we go “Mobile” to address it….

A little out-of-the-box tool as “Mobile Phone” could prove a massive transformation…..

Banks are increasingly adopting innovative methods to reach out applying the following channels……

• Mobile Phones• Agency Banking • Self Service Kiosks• ATM• Internet Banking• SMS Banking

Branchless Banking

Changing Geography

• New touch points25m25m

1.5bn1.5bn

Source: WB 2005; VISA; UPU 2008Source: WB 2005; VISA; UPU 2008

Operational Cost Efficiency

Comes from good channel management

$0.20$0.20$0.10$0.10

$0.75$0.75

$1.50$1.50

$3.00$3.00

Cost perCost per TransactionTransactionCost perCost per TransactionTransaction

Source: Tower GroupSource: Tower GroupSource: Tower GroupSource: Tower Group

$0$0

$1$1

$2$2

$3$3

$4$4

Traditional BranchTraditional Branch

Marketing BranchMarketing Branch

TelephoneTelephone

Through MerchantsThrough Merchants

ABC BankingABC Banking

Perspective driving the mobile and branchless banking

1. Regulatory Environment

2. Customer perspective(Customer Value Proposition)

3. Technological Environment

4. Institutional Perspective

(The Business Case)

Migration Path from Branch to Branchless Banking

Branch Banking

Branch Banking

V-bank Branch Banking

V-bank

Branch Banking

Pilot Phase Roll-out Phase

Banks to offer…..• Process loan applications (using Credit Scoring)• Take Savings deposits/ Repayments• Allow Withdrawals /Disbursement• Provide Remittances / Fund Transfers• Balance enquiry• Mini Statements• Mobile Phone Top-ups • Bill Payment

COMPLEMENTARITY CROSS-SELLING FULL RANGE BANKING SERVICES

As presented at a World bank Seminar 2009

How ‘We’ can help you ?

• We helped Banks and Microfinance institutes to grow exponentially in increasing their footprints in unrepresented areas

• MFIs like WWBG Ghana, Jamii Bora Bank, Chase Bank, Faulu Kenya, etc are able to save 50% of their operational cost by introducing Branchless Banking

• Banks/MFIs improves their operation efficiencies in terms of Loan Disbursements and Repayments

• Replacement of hardware and networking equipment from branches

Our Experience….

Communication Network..

BREFT Server

Terminals in the field

CBS

Other hosts

Or at Merchant locations

ATMs

Cell operator GPRS

Customer Perspective

Ease of Use or Convenience– Low Cost Magnetic Stripe Card and or Biometric recognition for complete transaction– Third Party lodgments allowed– Simplified Processes completed at the client’s business location:

Enrolment Process Transaction Process

Pre –Enrolment Process Enrolment Process

How can we go “Mobile”

Biometric Point-of-Sales

• Account Opening• Authentication of customer using

signature/photograph• Savings Deposit• Savings Withdrawal• Balance Enquiry• Loan Application• Loan Disbursement• Loan Re-payment• Mobile Airtime Top-up• Utility Bill Payments• School Fees• Tax Payment• Money Transfer• Merchant Payment• Reports

Mobile banking hardware

Authentication mechanism on mobileMobile Phone Banking authentication mechanism is be based on Signature / photograph. We show customer photograph and signature online on phone from the core system .

Bankers Realm Mobile : sample screens

Customer can apply for a loan. The loan product parameters and other information gets downloaded from the central server in online mode.

Credit Officer can open a new customer account in the field. He can also take customer picture using the Phone Camera . Account will be opened. To activate the account, customer may have to visit the bank in order to sign the documents.

Biometric POS Cash dispensers

Some of our Customers

1. Jamii Bora Bank , Kenya2. Chase Bank, Kenya3. Faulu DTM, Kenya 4. K-Rep bank , Kenya5. Nakumatt Retail Services6. FINCA , Uganda7. Botswana Saving Bank, Botswana8. OIBM , Malawi9. FBN MFI , Nigeria,10. Afribank , Nigeria11. La Regionale , Cameroon12. WWBG & SAT , Ghana

Working Agency Banking Site..

CHASE Bank Kenya Agent

Practice common in S. America & Asia, CBK Regulated, Agent earns commission for every transaction.

Urban Agent Rural Agent

Transaction mechanics

Customer comes to a Chase Bank agent.

The Agent Operator will swipe the clients card on the POS terminal, select the transaction and ask the client to key in their PIN to authorize the transaction.

The POS terminal connects to the Core Banking Software at the bank and debits the client’s account while crediting the agent’s account on a real time basis. Two receipts will be printed and the client will sign both leaving the agent with one.

Hands in their ID card and ATM Card to the Agent Operator.

Video- Branchless Banking……

INTRODUCING Craft Silicon

•A Kenyan software company started in 2000 with fully owned subsidiaries in India, Nigeria, Tanzania and the USA.

•More than 300 Employees across all offices.

About Us

• A Kenyan software company started in 2000 with fully owned subsidiaries in India, Nigeria, Tanzania and the USA.

• More than 300 Employees across all offices.

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Our Solutions • Bankers Realm Core Banking Solution

• Bankers Realm Core Micro Finance Solution

• Bankers Realm Electronic Payment Switch

• Bankers Realm Internet Banking Solution

• Bankers Realm Investment Banking Solution

• Bankers Realm Mobile & Agent Banking Solution

• Bankers Realm Islamic Banking Solution

• Elma – Mobile Commerce and Life Style Platform

OUR FOOTPRINTSGLOBAL PRESENCE

• Africa Kenya, Uganda, Tanzania, Rwanda, Ethiopia, Malawi, Zambia. Nigeria, Ghana, Gambia. Sudan, Madagascar, Swaziland, Burundi*, Congo*, Botswana, Ivory Coast, Niger, Cameroon, South Africa, Sera Leon, Senegal, Namibia .

• Eastern Europe Bulgaria, Armenia*

• Asia India, Mongolia, Afghanistan, Philippines, Indonesia.

• Pacific Micronesia, Vietnam*, Papa new Genuine, Fiji*

• Middle east UAE.

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CRAFT SILICON FOUNDATION .... A SOCIAL INITIATIVE FOR THE SLUM CHILDREN

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• Craft Silicon, as a part of our social responsibility, we provide free computer education to less fortunate people of the society.

• We have a bus loaded with computers, internet – powered with solar, which parks itself into various slum areas, and students walk inside for a regular sessions.

With You Forever