Lesson Learned

Population: 2,029,307

Population density: 3,5 inhabitants/sq km

Population:

0-14 yrs. – 34,8%

15-64 yrs. –61,4%

65 and over – 3,9%

Population below the poverty line: 23,1%

Rural population: 35%

Literacy rate: 81,2%

People with formal bank product: 49%

People with mobile phone: 61%

Annual remittance: 124 $M (inflows), 145 $M (outflows)

High-level macro-economic overview Some Learnings for M-Banking

Key highlights about BotswanaMacro-economic review

Potential market for unbanked is maximum 600.000 due to the:

Limited size of the population

Already developed financial sector

Botswana has a developed financial sector mainly in urban areas. Rural areas lack adequate financial services (63% unbanked in rural areas)

Key learnings

• With 35% of population living in rural areas, most unbanked, P2P payments from urban to rural and within local communities and G2P may make sense

• Low population density will make agent roll-out a challenge

• Market size will likely not enable more than 2 offerings to be viable and critical mass will be key

• Opportunity to jointly develop both MFS and mobile penetration in rural areas

Sources: CIA, CGAP, WorldBank

Overview of MFS (Mobile Mobile)

Transactional

• Interactive banking services

• Direct contact with bank

Informational

• Alerts• Account

balance & history

• Bank direct CRM

Payment

• Bill payments• Onsite

payment/NFC

Money Transfer

• P2P transfer

Mobile Banking

Transactional Informational

Mobile Payment

Payment

Mobile as a medium

Payment

• Bill payment• Merchant

payment• Remote

payment (e.g. : top up)

• Onsite payment/NFC

Money Transfer

• Domestic transfers

• International remittance

• International top up

• Salary payment

Micro-Finance

• Loans• Savings• Integration

with bank accounts and debit / credit card

Mobile Money

PaymentMoney

TransferMicro-Finance

Mobile Financial Services

Mobile as a wallet

(Mobile used to access bank services

(Mobile as a channel to access payment account

Mobile wallet used as a bank account

Payments to Electricity, water

7

Mobile Wallet (cash-in, cash-

out)

1

Key Steps

1. Rollout mobile wallet with cash-in cash out

2. P2P money transfer3. prepaid recharge (17%)

4. Develop services to get critical mass and regular “funding”

5. companies’ payments 6. MFI for loan payments7. Contracts with utilities to collect

payments

8 payment at merchant stores9. offer remittances in neighbour

countries

P2P Money Transfer

2

Social benefits and Pension

Payments

4

Merchant payment

8

CompanyPayments

(supply chain)

5

Prepaid Recharge

3

Loan disbursement and payment

6

Bas

ics

Corp

orat

e/ In

stit

uti

ons

Con

sum

er

International Remittance

9

Full M-Banking Services offer

10

10. Work with FNB to offer a suite of Banking services like Savings Accounts

FULL MOBILE FINANCIAL SERVICES - ROADMAPP

has

e 2

P

has

e 1

P

has

e 3

CONVENIENCE

•Ease of access to Agents for Cash in/ Cash Out•Ability to make Payments directly using MFS without withdrawing cash•Entire Process can be done on a Mobile device•Secure Trusted mode•No Need for a Bank Account

COST

•Less Expensive in Transaction costs

SPEED•Real time

beMOBILE value proposition

beMOBILE - FNBB PARTNERSHIP RESPOSIBILITIES

Marketing► Joint responsibility► Branding strategy defined and

agreed

► beMOBILE has to implement aggressive acquisition strategy

► Recommended role for beMOBILE► Telecentres to be leveraged

► beMOBILE involved in reconciliation for agent commissions and airtime purchase

► Joint responsibility► Branding strategy defined and

agreed

► FNB has limited involvement

► Limited involvement by FNB, Fully handled by beMOBILE

► FNBB to audit beMOBILE’s KYC adherence and AML.

beMOBILE FNBB

Customer acquisition

Agent network

Business operations

► beMOBILE will provide the mobile channel

► beMOBILE will depend on FNB’s technology platform, but can become a technology outsourcer

► FNB to extend their merchant acquiring platform, customize and develop new functionalities to support mobile money offerings

Technology

► beMOBILE customer service/call centre to be improved in order to support this new service

► Opportunity to use FNB customer service or to outsource to third party

Customer Service

► Marketing and branding of the product

► Acquisition promotions► Bonuses to agents► Production of starter packs

► Recruitment, training and management of the required agent network

► Cash management, settlement between partners

► Regulatory reporting► Reconciliation

Description

► Technology platform and mobile channel

► Standard customer service facility provided in a MFS project

Headquarters

150 Telecentres

Cash Bazar

Agents

Cash supply agents(cash supplier for other agents only)

187retail stores

6 warehouses90 wholesalers

Potential of 3.000 locations

Key offices

120post offices

20+ branches138+ ATM’s

30 petrolstations

30petrol stations

49outlets

?locations

SefalanaTransTrident

5locations

SoftcellSeiponePodder

Super agent

PLANNED AGENT DISTRIBUTION NETWORK

Current Agent network• 11 BTC/beMOBILE stores

Tele Centre

Key Findings

Telecentres Project at BTC

• Government supported project in remote communities

• 154 business centers live end of June 2012• Connected to BTC broadband and mobile

• It offers faxes, scan, printing, phone, internet, airtime and sim card

• It is managed by communities (2 community supervisors and 2 youth people to manage it)

• BTC trains and support these 4 people in the development of the Center

Mobile Money key lessons

Accessibility

CostDistribution

network

Speed Trust

Instability of the platform

Extra costs to travel to the nearest dealer outlet

Have a dedicated team

Launched with only 8 outlets

LESSONS LEARNED CONT

Distance to the nearest dealer

Partnership model

Operator led model

KEY CHALLENGES

Marketing

Bank partnership

Agent network/distribution

Business operations

Technology partnership

Customer Service

Description

Regulatory compliance

Organizational structure

•Distance to SMEGA outlets (Small/limited agent net work)•Cash availability at dealers•limited agent net work to cash in/out•Agents cannot transfer money from cards to SMEGA wallet as initially proposed

•Staff buy in of SMEGA

•system support•System reporting tool not user friendly and sometimes not working at all•No automation of electronic funding of virtual accounts from real accounts•Running a bill payment which is direct competition to phase 2 of SMEGA•Failure for the system to do a reconciliation of funds and the balances on people accounts

•Product cannibilisation (SMEGA & eWallet)•Systems had to be manually credited from back end

• There is no department that manages SMEGA as it is treated as a product like any other i.e. Mascom and Orange have a dedicated team for their mobile money solution

•Monthly reports not carried out as per a requirement form Bank of Botswana because of system limitations

•SMEGA financial process unclear•Processes never handed to relevant department•No strategy for Staff Smega buy in.

•Customer facing personnel unaware of SMEGA processes

THANK YOU