Mobile Money Updates: Weekly Review 7/21 – 7/25

The mobile money industry continues to grow in the developing world, offering financial inclusion to the masses that were previously without access to financial services. Below are a few recent articles highlighting exciting developments in the industry.

Mobile Money Continues to Penetrate Africa by Emmanuel Iruobe on Ventures Africa

According to an industry report by the Global System for Mobile Association (GSMA), the mobile money industry is continuing to expand across more regions in Africa. As of early 2014, nine markets had more mobile money accounts than traditional bank accounts compared to four a year before. In Sub-Saharan Africa, mobile money is available in 36 out of 47 countries.

The industry has seen its most notable growth in Tanzania. As of September 2013, 90% of the population had access to mobile financial services, up from 1% in 2008. According to the report, the expansion in services was due in large part to the National Bank in Tanzania working closely with mobile operators.

Mobile money has undoubtedly been a driver of financial inclusion in Africa. As the industry continues to develop, service providers will be able to increase financial inclusion by offering financial services beyond mobile money transfer. These services could include mobile insurance, mobile credit and savings.

East Africa: Ericsson – Airtime Can Be Used to Boost Uptake of Mobile Money Services on allAfrica

Rajiv Bhatia, Ericsson’s head of mobile commerce sales for Emerging Middle East and Africa (EMEA), recently stated that airtime could be used as an incentive to drive the usage of mobile money services in countries where its growth has been sluggish.

Africa has been a leading market for mobile money and Bhatia credits its success to transparency, education and trust, stating: “There are fantastic opportunities to grow this business especially among the migrant population, which still uses informal means to remit cash. Banks should forge closer ties with operators, who have an expansive distribution network to encourage adoption and drive usage.”

According to the World Bank, almost half the world’s adult population is unbanked and in countries where financial inclusion is low, mobile money solutions offer a fast way to close the gap. Bhatia estimates that by 2016, the m-commerce market is expected to reach $800 billion worldwide, but an enabling environment needs to be put in place in order for it to thrive.

A New Kind of No-Frills Bank Could Kickstart India’s Long-Awaited Mobile Money Revolution by Leo Mirani on Quartz

The Reserve Bank of India (RBI) recently issued a set of draft guidelines for the establishment of a “payments bank,” a bank that would not be allowed to lend but instead would accept and cash out deposits and remittances. This new kind of bank could be exactly what the mobile money industry needs to jumpstart growth in India.

India has remained a laggard in the mobile money revolution due, in part, to the cautious nature of the RBI. Indian regulations previously required mobile operators to work with banks to dispense hard currency, meaning users would still need to travel to the nearest bank to receive the cash that was transferred electronically.

Under the new regulations mobile operators will now be eligible to become payment banks and the poor population living in rural India who were previously locked out of the financial system will now be able to open accounts and store money electronically. One stipulation for the new bank is that it must have at least a quarter of its access points in rural locations with a population of fewer than 10,000 people.

The shift will mean financial inclusion for India’s masses and the ability to realize full market potential for mobile money service providers.

Is Tanzania Ready for Interoperability in Mobile Money? By Omoneka Musa, Charles Niehaus and Martin Warioba on CGAP

Mobile money interoperability among MNOs, mobile money operators, and banks has the potential to offer great benefits to operators, regulators and customers in the mobile financial services market. Importantly, it also offers an opportunity to further advance financial inclusion.

Up until this point there have been few attempts at interoperability as most of the emerging markets using mobile financial services are simply not ready. Tanzania may be an exception. The country is currently experiencing a mobile money revolution comparable to Kenya’s. In the past four years, mobile financial services usage has increased from 7% to 44%. The four largest MNOs in the country – Airtel, Vodacom, Tigo and Zantel – have partnered with CRDB Bank, National Microfinance Bank, and the Bank of Tanzania to create a set of operational regulations for interoperability.

Both customers and agents of mobile financial services have expressed interest in the benefits that interoperability can offer such as improved agent liquidity management. The main challenge now is to align the interests of competing stakeholders and to encourage regular communication among them. IFC, with the Tanzanian mobile money industry is in the process of finalizing rules for person-to-person (P2P) transactions while market players have expressed interest in discussing agent or Cash-in/Cash-out (CICO) interoperability as a next step. As mobile money markets continue to mature and more of the population in emerging markets experience financial inclusion, the case for interoperability will only strengthen, as everyone stands to gain.


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BRCK is “Making Ed-Tech Work in Isiolo” – Education, Energy, and the Digital Divide in Africa

As a follow up to our post on Education, Energy, and the Digital Divide in Africa, visit BRCK’s blog to learn how our portfolio company is making education technology work with its last-mile Internet connectivity solution in rural Kenya.

rural schools in Kenya

photo courtesy of BRCK

“What does it take to launch an e-learning initiative in remote schools in Kenya?  Last week I packed my bags and drove four hours northwest of Nairobi to Isiolo to find out.  BRCK was invited on this exploratory trip as a potential technology partner by eLimu, an ed-tech company based in Nairobi that is bringing innovative curriculum to schools.” READ MORE

Updates on UAV use in Agriculture: Weekly Review 7/14-7/18

The use of unmanned aerial vehicles (UAVs) as a farming tool has been an increasingly popular topic in the agriculture technology space. The collection of articles below outline the benefits UAV use can offer the agriculture sector as well as the roadblocks in the way of widespread commercial use.

Good Morning! I’m Here to Scout Your Crop by Elton Robinson on Delta Farm Press

UAVs in agriculture are still a work in progress yet they offer farmers benefits to see their land from new perspectives without scouting the fields themselves. The technology can save time, increase efficiency, and help farmers acquire the necessary data to make smarter crop management decisions.

A report from the National Research Council recently stressed caution for the UAV industry stating: “While civil aviation is on the threshold of potentially revolutionary changes with the emergence of increasingly autonomous unmanned aircraft, these new systems pose serious questions about how they will be safely and efficiently integrated into the existing civil aviation structure.” For now, the FAA requires that UAVs fly below 450 feet and always be within the owner’s line of sight but they are in the process of developing new rules and regulations for their use.

The prices of UAVs vary from $3,000 to $60,000. The UAVs on the low-end of the price range are small, battery-powered drones with flight times of 10 to 20 minutes: useful for plot work but not practical for large fields. GPS-equipped drones, on the other hand, are significantly more expensive but can be used for professional mapping and surveying. According to Randy Price, LSU Ag Center engineer, “in 15 minutes, it could do the work of one person working 8 hours.” These UAVs are catching on in crop consulting, helping consultants to cover areas more quickly and pinpoint problems more efficiently.

Farmers with UAVs share experiences by Kathy Huting on Farm Industry News

The Precision Aerial Ag Show in Decatur, Illinois was the first event of its kind, focusing solely on UAV use in agriculture. The conference featured speakers who own and use UAVs on their own farms. All of the farmers made it clear that they are abiding by AMA regulations, using the systems as hobbyists while awaiting FAA ruling on commercial use in agriculture.

A poll created by Huting gauged readers’ interest in using UAVs for farming: 39% of the voters expressed interest in purchasing one for their own farms while 27% voted that although interested in the technology, they are hesitant about the benefits offered. Their hesitation is that UAV use may only be beneficial for detecting problems, adding little value when crops are doing well. Growers who have invested in purchasing and learning to fly UAVs countered that the costs can be justified when you think on a per acre basis. Furthermore, as future demand grows, the technology will likely become cheaper. For now, many farmers are waiting on the FAA to rule on commercial use. Once this happens, UAV companies are likely to merge and offer scouting as a service which farmers can rent.

FAA Drone Rules are Needed by Chris Lusvardi on Government Technology

UAV operators can currently face up to $10,000 in fines for violating FAA guidelines. The FAA is relying on a 1981 advisory note that states drones can’t be flown more than 400 feet in the air to enforce this regulation. The regulation implies that landowners don’t have jurisdiction over their land, a contradiction to the 1946 Supreme Court ruling that gave ground property rights to landowners, with an exception for navigable air space in the public domain at a minimum safe altitude.

“The drone technology is ready to take off, particularly in agriculture, but the future remains shaky until the FAA defines the rules as it is mandated by Congress to do by 2015,” stated New York attorney Brendan Schulman. Drone use won’t only benefit farmers. Schulman expects the UAV industry to have a significant economic impact as well. In its first three years, the industry has generated $13.6 billion. Between 2015 and 2025 it is estimated to generate $82.6 billion and more than 103,000 jobs.