Ecocash Loans- Game changer ? Opportunity or Threat ? For whom

With the launch today of Ecocash Loans, following in quick succession from Ecocash Save accounts, Econet wireless has yet again read from the M-Pesa script to be the dominant financial services provider in Zimbabwe.

Ecocash is a bank, with the largest number of customers at 3.5M registered users. Having shaken up the financial services market and largely to reach the unbanked, sectors in the micro-finance are now jittery, they have come to eat their cake too. Banks have been the traditional threat to microfinance targeting the same customers, that today has changed with Ecocash entry into the lending space.

In the last 6 years M-Pesa has revolutionized banking in Kenya, with the 70,000 easy set-up branches( that you call agents) and with a total of 17m customers is the largest bank in Kenya and Africa. Holding close to a billion dollars in monthly deposits, controlling the mobile money transfer market with a billion dollars transferred monthly in peer to peer transfers, and in the last two years have diversified into savings and lendings.

The product that Ecocash Loan mirrors, M-Shwari had more than 350,000 micro loans within the first four months of launch. 60% of Kenya’s population is between 15-35years.To them, convenience is a lifestyle and mobile is their primary device; mobile banking has become a mass market service within a short period of time. 75% of M-shwari customers are 18-35years. They are accustomed to interacting with every sector of the economy via mobile.

How does this compare to Zimbabwe ?

With among highest penetration rates in the region, Zimbabwe’s telecom sector has outdone Kenya’s in terms of reach.

While I like to think that the markets are similar, a key difference in the markets has been the approach that Safaricom took. Safaricom opened up its platform massively for business. Any and every business can virtually acquire a mobile service within two to three weeks. The VAS aggregation space is regulated by the Communications Commission of Kenya(CCK) resulting in nearly 100-150 VAS players in the market, all service dynamic segments.

Mobile services are launched in a short window of time ( 2-3 month deployments) and virtually every sector is covered, from Financial services, Manufacturing, Transport, Education , Health, Agriculture, FCMG , just to name a few. Every sector of the economy has one or two key mobile services running with industry leaders having iterated two to three services in the last three – six years. You could call it a very hotly contested market. One in which Econet wireless failed to penetrate.

Cement Manufacturers have mobile codes for retail and distribution, pharmaceuticals have services for drug authentication, m-health, education services launched on SMS to manage training, Apps for agriculture, solutions for transport, mobile banking for Saccos and microfinance not just banks. Not to mention the digital content space with local content as a key commodity for players. We are talking mobile services that tell you when your cows should mate!

I postulate, and this is just my opinion, in their approach Safaricom, enabled innovation by allowing VAS aggregators access to services, and in that way, ensured their customer base was served in virtually every sector. Its not just allowing access, but maintaining a standard operating procedure for VAS players to connect services. Now it didn’t come easy, and Safaricom has often been described as a “market bully” or monopoly, but in my experience with Econet, they are a benevolent dictator. They set the terms, they set the rules, but the field is open for you to play. It’s your focus, commitment and  resourcefulness in this crowded market that will get you ahead, the operator doesn’t really get in the way of your business or the basic access to service.

 I think Safaricom has come to a place where they realize they don’t hold a monopoly on innovation, it will happen, they just need to get out of the way, take a cut, it contributes at least 4-6% of their total revenues.

Lets take look at Econet wireless.

Their story is an inspiration for Africa by many accounts having overcome the greatest of odds, from last entry in the market, to complete and utter dominance of the telecommunications sector in Zimbabwe. They are ruthlessly focused, efficient, and have managed to lead the sector in what I estimate this year will be billion dollar revenues.

Ecocash wallet has quickly acquired more customers than the total banked population in less than two years and their launch of service happens in a quick succession of 2-3 months for new products.

What about the market?

With no formal regulation of VAS/WASPA providers, it’s entirely up to the operator as to whom they choose to work with, how and when. No accurate processes to determine if and when they will take on new ventures, its more akin to lining up several suitors for one fat bride, there are always likely to be losers, never a level playing field. Not to be accused of ranting against Econet,  all operators work in this manner in Zimbabwe. Each has a preferred set or just one VAS player connected into their platform, reducing the likelihood of service deployments on unified shortcodes.

How many shortcodes for VAS ? Limited to News alerts, basic SMS subscriptions and operator dominated services. How many VAS players of note, less than 20. In fact the word aggregator, will get doors closed in your face.

How many microfinance institutions have mobile services ? your guess is as good as mine. How many manufacturers can deliver solutions for distribution within 2-3 months ? FMCG ? None. For a forward thinking market such as Zimbabwe why would top FMCG promotions run on WhatsApp! For banks the acquisition and roll-out of mobile banking solutions in the market has been painful, and often fragmented.

Econet will continue to dominate the market, that is not in doubt. In fact, we all want to be like Econet in a downturn economy like this. But will they deliver the level of innovation that this economy needs to break the downturn, not by a longshot. Innovation cannot be monopolized. If anything they should lead the call for a formalized VAS/WASP regulation, and open up the pipes. Not to be relegated into dumb pipes, but to participate in opening up opportunities that other business segments can build and grow on. Because their future depends on it.

They might read from the Safaricom script, but they are far from being a game changer for this market. The co-operative and collaborative model that impacts businesses and the economy at large does not exist.

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Dropbox’s hiring practices explain its disappointing​ lack of female employees


Interesting reading,

After accepting to be a mentor for Zimbabwe’s technovation 2014, i wonder how we as women can help the girls interested in this field overcome biases, and stereotypes and pursue their passions in tech ?

Originally posted on VentureBeat:

“If someone came in right now and announced that the zombie apocalypse had just started outside, what would you do in the next hour? What is something that you’re geeky about? What is a superpower you would give to your best friend?”

These are the types of questions that you could be asked if you apply for a job at DropboxBusiness Insider culled these and other quirky interview questions from a career Web site, Glassdoor.

Dropbox, which provides online storage, is clearly looking for creative people who can think outside the box and wants to make interviews more fun. It is not alone; many Silicon Valley companies ask such questions. The problem is that such questions are fun only for people who understand the jokes — and who can think like the young men doing the interviews.

They don’t lead to better hiring outcomes, as Google learned…

View original 801 more words

Should Banks really fight Mobile Money?

Experts say no.

As most mobile money solutions gain traction in markets, banks have traditionally been on the opposing side. Report below from shows that theirs real benefit in coming together.

In the countries where mobile money has been particularly successful like Kenya, Uganda and Tanzania, the next unfolding wave of growth is payments integration. It sounds boring but it’s tying in merchants and banks to mobile money to allow more payments to be made more effectively. Russell Southwood talked to Arnold Sentuwa Luwugge and Gerald Begumisa of Yo Uganda about what it might mean.

Yo’s Arnold Sentuwa Luwugga describes the company as “developing technology and mobile solutions for businesses and NGOs”. It has developed its own custom software and has customers both in Uganda and in other African countries. It is currently working on rolling its services out in Burundi.

It facilitates payment between banks and the mobile money payment operators. It works for several banks including Opportunity Bank and EFC Bank to allow money to come out of and go into bank accounts. It also does bulk payments for both banks and NGOs.

The latter are increasingly delivering social payments and things like per diems to the phones of beneficiaries. Indeed USAID has initiative to migrate cash payments of this kind to digital:”Three NGOs have used it so far and we expect it to scale up this year. If you have 50 people at a workshop, you no longer need to carry cash to pay all the attendees. We make arrangements with the mobile operators to have agents nearby so the cash can be accessed easily.” The National Bureau of Standards can receive payments for inspection and certification through mobile payment.

It also does the more standard bill paying for things like utilities bills. The user can click a simple pay button to accept the amount displayed and a message is sent for confirmation back to the mobile and if accepted, payment is made to the merchant. Customers of ISPs like Smile can recharge their internet accounts in the same way and there is a direct link between Yo and Smile allowing the latter to see payments made in real-time.

Its online payment platform for transactions of this kind has 500 merchant accounts and its mobile one 50 customers but Sentuwa again sees rapid growth in 2014. A company called Multiplex runs street parking in Kampala and you can pay using Yo’s mobile wallet which is integrated into its payment system. It was launched last November and there have been thousands of transactions.

Sentuwa’s confidence about growth this year is partly based on the assumption that MTN will create a merchant framework similar to those operating in Kenya. Mobile money transactions in Uganda in 2013 were around US$6 billion but at present the vast majority of these transfers are person-to-person. The next wave of growth will be person to business (and vice-versa) payments:”We’re targeting quadrupling growth this year on that basis.”

Kenya which is slightly further ahead of the curve gives some indication of where things are going. Pesa Pesa has 10,000 merchant customers and it extends into pubs, shops, bars, restaurants and kiosks in the informal sector. It currently is handling US$1 million in transactions a month. Behaviours take time to change but the mobile phone is on its way to becoming Africa’s debit card.
See interview with Pesa Pesa on the link here:

East Africa leads the way in mobile payments

Got this from Kopo Kopo blog, haven’t blogged yet this year, thought its a good one to start of the new year.

East Africa is definitely leading the pay in the digital payments space, revolutionising how payments are done using mobile. As they say tell, an African that money is sitting on that little sim card, he’ll figure out how to get it out …..

2013 was definitely the year that global payments systems upped their stake in East Africa. 




Ecocash on par with MPESA


Snapped this goodie from Mobile money news, an interesting piece if i do say so myself:


Zimbabwe: Predictions On Econet, Ecocash Fulfilled

BY BRETT CHULU- Zim Independent( local weekly)

WE made two predictions about Econet’s share price and about the size of revenues EcoCash would generate.We were spot on.

 This article will refresh our readers on the predictions we made in this column on Econet’s share price and Ecocash’s revenue-generation capacity. Readers of this column include local and foreign respected business leaders and business analysts.

 The whole point of this article is to drive home an unusual point; a model can be more powerful than data. If a business leader waits until the data is clear, the game will be over. This is a lesson that our business leaders in Zimbabwe should take seriously. In short, in a world of fast-paced changes they cannot wait until the data confirms their hunches -it will be too late. Opportunities will be gone by the time data is clear.

Econet share price

 In this column, on October 12 last year, that is 13 months ago, I wrote: “From the statistical relationships we derived from the model (a mathematical model I had prepared), we extrapolated to a number of firms not sampled, Econet is a very notable anomaly. From the parameters established from our model, Econet should be trading at around 676US cents per share, based on last year’s earnings performance. At the current share price of 475 US cents, our model shows that Econet is at least 42% undervalued.”

 You can imagine my delight on Monday February 25 2013, five months later when the Econet share traded at 676,60 US cents, practically, the exact share price we had argued was the right level five months earlier. The Econet share price continues to trade above 600 US cents. If someone who read our article of October 12 2012 had bought our argument and purchased Econet shares, they stood to grow the value of their investment by 42% in a space of five months.

 EcoCash revenue

 Until last week, Econet had not released the revenue figures for EcoCash since it was launched in 2011. Econet revealed in its analysts’ briefing of the half-year results that EcoCash had raked in US$13 million. I had predicted this revenue level, as far as 17 months back. No insider information, please. Simple mathematical modelling did the trick. On June 22 2012, I wrote an article titled “Can EcoCash match M-pesa?. This article attempted to use what is known about M-pesa, the mobile money service operated by Kenya’s Safaricom to predict the financial performance of EcoCash. At the time of writing, EcoCash was barely 9 months old. One of Econet’s senior executives went on record to state that it was too early to gauge the performance of EcoCash. The executive went on to mention that it normally took five years for performance patterns in mobile money to be established. I could not wait for five years and so I decided to use M-pesa to establish a model to make sense of how other mobile money services were likely to perform operationally and financially.

 In the June 22 2012 article I wrote: “Analysing M-Pesa’s revenue-generation per M-Pesa subscriber shows that average annual revenue per M-Pesa subscriber has risen to US$13,00. This is a key metric that gives us a glimpse into the revenue generating capabilities of mobile money transfer over time.”

 I had expected Econet to release EcoCash’s revenue at the end of the 2012/2013 financial year. Frustrated, I decided to do some digging into its published numbers. Armed with the US$13,00 per registered M-pesa subscriber I had extracted from the M-pesa’s five year evolution, I placed this as a ceiling for EcoCash.

 After being disappointed by absence of EcoCash’s revenue figures in the 2012/2013 Econet report, I did a write up on October 31 (never published) on my thoughts on EcoCash’s performance. Here is an extract of what I wrote then (quoted verbatim):

 “From the analysis of Econet’s full year 2013 financial results, EcoCash is not generating much.

 “Data, SMS full; year 2010/2011 contributed US$64,09m (EcoCash was launched at the end of the 3rd quarter during this financial year).

 “Data, SMS, EcoCash; full year 2011/12 contributed US$85,54 million.

  “Data, SMS, EcoCash; Full Year 2012/2013 contributed US$90,35 million.

 Taking the growth in data and SMS from the year EcoCash was launched, there has been a growth of US$26,26 million. At US$1,2 billion transactions since launch, it means, EcoCash is processing an average of US$80 million worth of transactions per month. If we take a modal tariff rate of 3%, based on the assumption that most EcoCash users are registered subscribers then, EcoCash is generating about US$28,8 million per year, about 4% of its total revenue. A similar mobile transfer service, M-pesa, Kenya’s largest mobile network operator, is contributing 18% to total income. Does this indicate the scope for revenue growth from EcoCash? Using annual revenue per registered EcoCash user, we get an average of US$13,71.

 M-pesa’s is in the US$13,00 -15 average revenue per M-pesa subscriber.”I had predicted US$28,8 million EcoCash revenue for a full 12 months. Halving that gives us US$14,4 million, which is not far from the US$13 million Roy Chimanikire, the group chief financial officer for Econet Wireless Zimbabwe revealed in his presentation two weeks ago. Our US$28,8 million was based on an EcoCash subscriber base of 2,1 million customers.

 Now that EcoCash’s subscribership has since risen to 3 million, the EcoCash revenue for the current full year is likely to be about US$35 million.

It would appear that the model for mobile money transfers we derived from M-pesa’s first five years of operation is a good predictor of the performance of similar mobile money transfers.

Nokia’s fall from grace

Have been extremely lazy to blog, blame it on a lack of balance in my life write now…. but found this article and thought to shamelessly post it… its a goodie:

Nokia: a lesson in how high-tech flyers can fall fast

In just five years Nokia fell from dominating the mobile phone industry to abandoning the handset business, a swift fall from grace with lessons for market leaders.

Nokia’s research centre in Helsinki. Constant research and product development are essential – but so is the need for optimal timing when developing and launching new products. And a lack of hubris won’t go amiss. (Image: Russavia, via Wikimedia Commons)

The story of Nokia, now at the toughest stage of the restructuring cycle, is a particularly salutary business case about the fast-moving, high-risk, high-reward, tech sector for hip consumer goods.

The rapid decline, which is ending with the €5.44bn (US$7.5bn) sale of the mobile phone division to Microsoft, owed much to Nokia growing too big, too fast and its management getting drunk on their own success, analysts say.

Looking back after years of Apple iPhone dominance, some may have difficulty in recalling that Nokia, in its heyday in 2007 took more than 50% of the world market for early smartphones.

“They had become arrogant at Nokia and as a result they were too slow to react to changes in the world around them,” Petri Rouvinen, a researcher at the economic think tank ETLA, told AFP.

The technology of the iPhone upended the mobile handset business. It also highlighted the critical importance in any business, but particularly in the high-tech sector, of getting the timing right.

Not only did the iPhone, with its touch screen, become a hot fashion item worldwide, but also the operating system with paid-for applications invented a new revenue stream for Apple.

Dominance lost

When Google’s Android took off in 2009, it became clear that handset manufacturers had lost dominance to the operating systems which generated revenue from applications sold to users.

Commenting on the business lessons, Rouvinen said: “Since 2007 it’s no longer possible to consider telecommunications, consumer electronics and computers as separate sectors. Now there’s just one industry and it’s digital.”

That is where Apple had an all-important lead: it brought the right hardware and software together at just the right time.

“If Apple had shut down its heavily loss-making PC business in 2000, it would never have been able to launch iPod, iTunes, iPad etc,” said Tero Kuittinen at Alekstra consultancy.

Nokia’s management was aware that a digital revolution was underway but in a recent book its former chief executive Jorma Ollila said the company peaked too soon – investing heavily in smart phone technology before operators were ready to offer services.

Analysts said another lesson is to have the appropriate expertise on the board. They said that Nokia had suffered from a culture of sycophancy towards Ollila – at the helm for 14 years until 2006.

Experts can give you the edge

“During times of transition, the board must have real industry experts, not random executives,” said Kuittinen. He held that Ollila had been surrounded by “sycophants who had no competence to address software challenges.”

Nokia kept developing its Symbian operating system but was slow to introduce touchscreen capability.

In 2010 it made a partnership with Intel to develop a different operating system, but abandoned this after a year and turned to Microsoft’s new mobile Windows platform.

Nokia is just one example of the high stakes in high-tech consumer goods.

Telecommunications equipment manufacturers Ericsson and Motorola suffered a similar fate and sold their handset businesses after being overtaken by innovation.

Canadian firm BlackBerry is the latest example of a market leader fallen by the wayside.

Sony, which picked up Ericsson’s handset business, has also had difficulty making money out of mobile despite its consumer electronics pedigree.

Tough choices

Companies sometimes need to make tough, radical choices to refocus their business.

Analysts say that the response adopted by Nokia is to develop the profitable mobile network equipment segment with Nokia Solutions and Networks (NSN).

“Now Nokia can concentrate on its other business – NSN,” said Rautanen, adding to speculation about what the company might do with the €5.44bn from Microsoft.

Credit rating agency Moody’s said recently that Nokia had emerged a winner from the sale, gaining much needed revenue and off-loading a loss-making business.

But the agency added that it will not be easy to reposition the company as a credible actor in an industry with very short product life-spans and rapid changes.

Nokia was already a business case of how to engineer corporate transformation.

The company started as a wood pulp mill, then bought a rubber business making boots and tyres. A cable business led to Nokia venturing into electronics and then telecommunications.

When mobile telecommunications boomed in the early 1990s, Nokia sold the other business to focus on handsets and networks.

Rouvinen said the conditions which led to the downfall of Nokia and others are not likely to change soon.

“The fact that so much happened in only five years does not mean that the next five years will see the same turmoil,” he said.

“But I predict that the turmoil will continue at the same or even at accelerated speed.”

Source: AFP, via I-Net Bridge

original found here:

The business of death

Stumbled on this piece of news today, and thought it was very interesting. I had not come across the funeral assurance business as big business, until i moved to ZIM. This has not been widely adopted in the EA, region, in my view because of our cultural collectivism.  We contribute towards our families and friends big events, the  “harambee spirit”….

All in all, i see a big opportunity for this in the mobile space, insurance premium collection via mobile banking and mobile money wallets will be the next logical spae as adoption of such insurance services takes root.Read on…

JOHANNESBURG/NAIROBI — From fish-shaped coffins to slaughtered bulls, funerals in Africa are lavish affairs, providing a lucrative opportunity for insurance companies looking for business in some of the world’s fastest growing economies.

Many of the insurance industry’s big money-spinners in developed markets, like car insurance and coverage for household goods, are irrelevant to the majority of Africans who can’t afford a range of expensive personal possessions.

But high death rates and low savings levels mean funeral insurance is proving an easier sell among people daunted by ceremonies that can cost several months’ worth of income.

Related gallery: The funeral business in Africa: Not a dying industry

“That’s the whole problem with it. People think that if you want a small intimate funeral, you don’t have money,” said Emily Chauke, a 43-year-old cosmetics consultant from Johannesburg who pays 570 rand ($57) a month for family funeral coverage.

“They have that thing of proving people wrong, that ‘I can afford to give my father or mother a big funeral,’” she said.

Africans are by no means alone in spending heavily on honoring their dead. But funerals on the continent are more frequent per head of population than elsewhere in the world.

In South Africa, the continent’s biggest economy, the death rate is more than 17 per 1,000 people a year, nearly double the global average. And six of the 10 countries with the highest death rate are in Africa, according to the CIA World Factbook.

While mortality rates are high, they are also falling — an attractive combination for insurers that raises the prospect of customers paying into their policies for longer.

High unemployment and above-average birth rates across much of Africa also mean employees can have many dependents, making it more likely they will seek funeral insurance.

“There’s a big demand for it because of the cultural behavior that we need to have these big dignified funerals,” said Jacky Huma, head of micro-insurance at the South Africa’s Financial Services Board (FSB), which estimates funeral premiums in the country totaled 4.9 billion rand ($494 million) in 2011.

Sad family members wait to pick up a coffin in NairobiReuters: Noor Khamis

Click picture to see photo gallery


While global financial services firms see funeral coverage as a way of gaining a foothold in many African markets, they will find plenty of local competition.

For example, Uganda’s A-Plus Funeral, a funeral director that offers insurance, has grown from just one director 10 years ago to 13 now, and reckons the 5 billion shilling ($2 million) local funeral insurance industry is growing 25 percent a year.

Meanwhile, Sizo Funeral Directors in Soweto, South Africa’s biggest township, offers funeral coverage for 14 people under one principal member for as little as 120 rand ($12) a month buying the cheapest funeral package of 5,000 rand ($500).

In most cases, though, the costs will be far higher, given the cultural and social pressure for lavish ceremonies and an “after tears” party that continues long after the burial.

“We Africans will tell you to slaughter a cow to feed people. And a proper cow is 6,000-8,000 rand ($600-$800). Food can cost you an average of 3,000-5,000 ($300-$500) excluding the cow. So you need insurance,” Sizo managing director Brian Mazibuko told Reuters in a shop lined with about a dozen shiny brown caskets.

An average funeral will set a family back 30,000 rand ($3,00), according to South African insurer Hollard, compared with a non-farm worker’s monthly salary of 14,000 rand ($1,400).

The sums involved have also attracted interest from outside the traditional financial services sector.

South Africa’s FSB has licensed 39 insurers to offer funeral products, including mobile phone operator Vodacom.

Its bigger rival MTN is working with Hollard to sell funeral products by phone in Ghana, where burial ceremonies can last for three days and the deceased is often laid to rest in a custom-made coffin matching his or her profession — a fisherman in a fish, a market trader in a banana.

Hollard is also in partnership with South African soccer club Kaizer Chiefs to sell funeral insurance to its 14-million strong fan base, with payouts of up to 50,000 rand ($5,000).

Entrepreneurs are finding other ways of turning the cost of African funerals into business opportunities too.

Kyai Mullei, a 36-year-old whiz-kid in Kenya’s mobile technology industry, has taken the local tradition of the “harambee” — in which communities and families come together to raise money for funerals — and given it a 21st century twist.

The cost of holding a harambee can eat up as much as a third of the money raised, particularly when many families are spread across the east African country. So Mullei has created a virtual harambee platform called M-Changa, from the Swahili word for contribution, where fundraisers can meet in a mobile community in exchange for a commission of 1.5 percent on all funds raised.

“Many people still live in rural areas so the chances that the committee all live in the same place are unlikely,” he told Reuters, adding the number of M-Changa harambees being set up is doubling every month.