a modest proposal

Jan 2007
South Africa , January, 16 2007 - Brijeshwar Mandal works in New Delhi for a small business as driver and has an office supplied cellphone. He sends money home to his family in a village in rural Bihar by transferring funds through the mobile network. No village postmaster or telegramwalla can now extort a fee from his illiterate wife. What if his existing prepaid SIM card could act as a credit card - something no bank would ever issue Mandal - and he could not only order his train tickets through his cellphone but also make routine payments for his employer such as purchasing petrol or other sundry goods.

Smt. Rajeshwari was left widowed with three small children in Sawai Madhopur and had to struggle without support from her husband’s family until she joined the Dastkar Ranthambhore women’s cooperative. Through sewing and embroidery, she is today a leading member of her community with a pukka house, well settled children and a bank account at Khirchipur village’s Bank of Baroda branch. Today, Dastkar Ranthambhore is receiving export enquiries from UK, USA and other nations. Would that she could use her mobile phone on the existing cellular network to not only accept foreign currency transactions but also track her parcels sent abroad to prospective and existing customers.

India is indubitably one of the fastest growing markets for cellular phones of all kinds - each day a new service or facility is launched. However, there are millions who remain unconnected to the benefits of ubiquitous connectivity, communication and commerce. This is not due to the lack of funds or will to purchase a mobile phone so much as the lack of appropriate applications available to them over the mobile network.

For a decade since liberalization, the focus has rightly been on developing the technology and the infrastructure to wire our nation. Now the time has come to focus on the development of appropriate applications that would facilitate the creation of value and thus wealth amongst those who need it the most.

Of the top ten applications currently ranked in the “broadband nations” only one of them is of direct value to the segments at the lower levels of the technological and fiscal pyramid. That is the BBC’s news site, whose data shows that over 90% of the visitors to their WAP site are from Africa, the majority of whom face the same issues of connectivity that we do here in India. The other nine are ancillary applications - developed by designers and engineers who are accustomed to cable networks and broadband throughout the day - such as social networking, parking information or movie tickets etc.

We believe that we can make a significant difference with the existing infrastructure already in place, as we saw in Sawai Madhopur and the surrounding villages. No further technological investment is required. What is required, however, is the development of relevant applications. Of these we have identified the area which we believe can have the maximum impact with the minimum amount of investment of time and money.

While our nation needs services such as healthcare information dissemination, social networking particularly for emergencies and natural disasters and a myriad other urgently needed applications, we have  identified existing models that work in the area of finance, microfinance, fund transfer, purchases etc in South Africa. These models are already in place and can be studied, evaluated and analyzed in the field, then adapted, changed or upgraded for the current situation prevalent in India. What we propose is that we prototype these in one selected rural area - say district Sawai Madhopur - implement and tested till a suitable workable model can be replicated systematically wherever there are cellular circles across the nation.

Here are some examples of what has been implemented in South Africa.

Mobile Banking Case Study;

WIZZIT Life is now easier for Andile Mbatha, who owns a hair salon in Soweto, Johannesburg. Gone are his days of trekking to his bank, which could take two hours by minibus, to send money to relatives. Nor does he keep piles of cash in his salon any more. Last year, he opened a bank account with WIZZIT, an innovative provider of financial services. He now sends money to his sister in Cape Town whenever he wants, from wherever he wants, using a simple menu on his mobile phone. Half his customers no longer pay cash for their haircuts. They use their phones to move money from their accounts to his, in a few seconds.

WIZZIT targets the 16 million South Africans who lack or have difficulty accessing formal banking services. Many WIZZIT customers are indeed poor, but they are not among South Africa’s poorest people. They tend to have more income and assets and be more financially and technologically sophisticated than other low-income South Africans, having skipped landlines and jumped to mobiles.

WIZZIT is a startup mobile banking provider that offers a transaction banking account accessible via mobile phone and debit card. The company operates as a division of the South African Bank of Athens. WIZZIT targets the 16 million people in South Africa (48 percent of adults) who are unbanked or who have difficulty accessing formal financial services. Since its launch in December 2004, WIZZIT has acquired more than 50,000 customers. WIZZIT bills itself as a “virtual bank” and has no branches of its own. Customers can use their mobile phone to make person-to-person payments, transfer money, purchase prepaid electricity, and buy airtime for a prepaid mobile phone subscription.

WIZZIT also gives customers a Maestro branded debit card with which they can make purchases and get cash back at retail outlets and withdraw money at any South African ATM. Customers can also make cash deposits at several banking institutes.  WIZZIT uses no mass media advertising, such as TV commercials. Instead, it markets its services through more than 2,000 “WIZZ Kids,” who are typically young individuals drawn from the lower income population, which WIZZIT views as its core market. WIZZ Kids educate potential customers about WIZZIT and earn a commission for each new customer. For new users, signing up is as easy as keying one’s national identification number into the mobile phone.

WIZZIT provides customer support via a call center that is available 15 hours per day in the 11 official languages spoken in South Africa. Other similar mobile banking services are available, such as MTN Banking which is a joint venture between MTN, the second largest cellular provider and FNB, on e of the 4 major banks in South Africa. These mobile banking services make banking easier and more accessible, and the government will also be able to use the accounts to deposit millions of dollars in monthly pensions and grants, helping the elderly receive needed funds without long walks to disbursement centers.

WIZZIT uses existing cellular technology and phones, there is no need to upgrade or roll out other technologies like Wi-Max or 3G.

Highlights of our proposed program -

  • Following the user centered process for development [cut and paste my basic user centered process here] the final model that can be replicated across the nation can also eventually be transferred back to other emerging nations in the continents of Africa, South America and Asia including China.
  • These same models could conceivably be upgraded and proposed for developed markets of North America, Europe and Australia as well as the technologically advanced nations such as S. Korea, Japan or Singapore.
  • By observing already validated models and adapting them to the local conditions, culture and society, there will be a shorter learning curve - this implies that even one application that could successfully be rolled out would demonstrate its viability within a short time without major infrastructural requirements.
  • Eventually this can be expanded to healthcare, information, other commercial applications that could form the seed of a truly mobile and wireless internet work - one that bridges the digital divide but on a platform that has already managed to change the lives of those who use it as it stands now. Jeevanlal Patodia, the pavement vegetablewallah who owns a top of the line Nokia phone and was interviewed by BusinessWeek or your local paanwallah who takes orders at night on his, would only agree.

What do we need to make this happen? We need the brainpower and the technological expertise to develop the applications, to solve the problem based on the technology and software ALREADY in place in India. As an integrated innovation, design, research and strategy consultancy with local offices in Pretoria, Rio de Janeiro, Bangalore, Delhi, New York, Vancouver and San Francisco, we can envision the way the process and system would work in human terms - what we need is your globally renowned capability to manifest our vision in tangible terms on the cellular networks accessible to any mobile phone owner regardless of his bank balance.

Source : Perspective blog

Research Analysis Tools

The fund indexes, institution benchmarks and other market information displayed here are all Symbiotics designed analysis tools, created in-house by our analysts and experts. Symbiotics has one of the oldest track records in microfinance investment analysis dating back to the late 1990s; its indexes and benchmarks have been regularly used as markers by investors, asset managers, financial institutions and practitioners. These, as well as several other research products, are available through the Research Account. Click on the link below to find out more.

Learn More