Taking Banking to the Unbanked

Background of South Africa

• Population : 48 800 00
• Capital : Cape Town
• Largest city : Johannesburg
• Literacy : 82.5%
• GDP per capita : 6170 (US) dollar
• Currency : 1 rand
 Middle Income Country
 Macro economic level is high , Telecom networks are relatively well developed.
 Plays a substantial role for all of Africa.
 Only African country represented in G20.
 Cape town, Port Elizabeth , Durban ,Pretoria and Johannesburg are 5 most developed
areas.
 Unemployment , crime, corruption are a few challenges .
Mobile Banking in Brief
• Term used for performing balance checks, account transactions, payments.
• Two Categories
I. Additive- Provides existing customers with extra access channels
II. Transformational- Potential to attract previously unbanked segments by
using existing infrastructure and offering pricing and coverage that
matches targeted customers.
M-banking in South Africa
World bank estimates that 5 billion of 6,5 billion people do not have bank a/cs.
In SA , 16 million of country’s 48 million were unbanked.
Started ‘WIZZIT’ .
Service includes storing and sending cash ,paying rent , electricity bills.
SA’s financial landscape is dominated by 4 big financial instiutions
a) FNB b)Nedbank c) ABSA d) Standard bank
Wizzit

• WIZZIT is a cellphone-based banking facility whose target market is the estimated

16 million unbanked or underbanked South Africans - about 60 percent of the
country's population
• Unlike its competitors (FNB and MTN), WIZZIT does not require users to have a
bank account and is compatible with early generation cell phones popular in low-
income communities.
• In addition to being able to conduct cellphone-to-cellphone transactions, WIZZIT
account holders are issued Maestro debit cards that can be used at any ATM or
retailer.
• There are no transaction limitations - the service is purely pay-as-you-go.
• WIZZIT employs over 800 "Wizz Kids" - typically unemployed university
graduates from low-income communities - to promote the product and help
unbanked customers open accounts.
Strategy

• Fortune at the Bottom

of the Pyramid.
• Refers to economical
pyramid in which
welfare of the world get
captured.
• Opportunities for
companies to eradicate
poverty,creating new
sustainable markets.
Segmentation
SWOT Analysis
Strengths
• Pioneer / leader of the market / brand
positioning
• Integration of actors from the public and
private sectors (banks, ministries,
multinational corporations)
• Major remittance platform (not only at the
national level)
• Platform based on mobile phones:
everybody uses a mobile phone
• Association with the brand Maestro
• Pay per use: there is no fixed charge
• Works with all six mobile phone providers
• No money or information is contained in
the device (safer for the customer)
Weaknesses
• Depends on the bank license
• Depends on the network for collection of
savings
• Requires literacy
• Lack of control over their personal
markets, quality information regarding the
use of the product
• The lack of GSM coverage in certain
remote areas (where the impact could be
higher)
• A large number of accounts not in use-are
still trying to understand and work on the
reasons
• Vs POS device: a little more of a delay to
the payment confirmation in a store.
Opportunities
• 13 million potential customers in South Africa
who have no bank accounts
• Exemption Regulation-17: flexible and fast
account opening
• Wide and growing use of cell phones
• Advances in technology will result in cost
reduction and easier processes in the future
• Enormous potential for personnel (wizzkids)
and microentrepreneurs
• International recognition of the brand,
potential to expand to other countries
• Act as agents of government benefit
payments, pensions, etc (high volume
accounts in developing countries, as well as a
great opportunity to impact the cost and
efficiency)
• Can break into the market for microfinance
(and is doing so) in partnership with NGOs
Threats
• Banking and telecommunications can
launch their own platforms: they could
launch it at low cost, as an entry
strategy
• Threats to security: the information or
theft of money through piracy systems
• Increasingly stringent regulations
might restrict the use of mobile
phones for banking
• People in the informal economy may
not wish to enter the ‘radar’ system for
fear of tax authorities
• Risk of information managed by
wizzkids
Conclusions