Transcript M-PESA is electronic value [e-money] backed by real

The AFRACA Executive
Committee 2007/2008
Mission
“Improve rural finance environment
through promotion of appropriate policy
framework, support member institutions,
provide sustainable quality financial
services to the rural population through
introduction of appropriate rural banking
practices and innovative products”
SUB SAHARA AFRICA
Innovations in Products to meet
new challenges
New Challenges and opportunities
Technology – Mobile phones
- Internet
Climate Change – e are not to blame
- Can we embrace opportunities arising out of issues coming out
of this situation
- Long term view
Innovations in Technology
• Mobile Phones – Growth
• Internet and connectivity
• Hand computers for collecting data
– What are we committed to as an institution
– Can we look for tools to help us meet our
objectives in a sustainable manner
Domestic Transfers
How does M-PESA work
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M-PESA is electronic value [e-money] backed
by real money in a conventional bank account
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Users can
buy e-money for cash
send it to others by SMS instruction
sell e-money in exchange for cash
M-PESA has the Trust Account with the real
money
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M-PESA records to whom that money belongs
How does M-PESA work ?
•M-PESA is electronic value [e-money] backed by real
money in a conventional bank account
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Users can
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buy e-money for cash
send it to others by SMS instruction
sell e-money in exchange for cash
•M-PESA has the Trust Account with the real money
• M-PESA records to whom that money belongs
Future M-PESA Services
Sending Money Home is just the start
Many other services are being developed
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Bulk Payments B2C [e.g. salary, Pension, Kwachua]
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Utility payments
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International Money Transfers
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Merchant payments
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Facilitating Microfinance and Banking services
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Social Payments
Revenue Sources –Agent
Commissions/Transfers
Per transaction range in Kshs
Agent Commission –
Withdrawals
Agent Commission Deposits
100 - 2,500
15
10
2,501-5,000
25
10
5,001 - 10,000
35
15
10,001 - 20,000
60
20
20,001 - 35,000
75
40
M-PESA Registration
KShs 80 per registration
SIM SWAPS
KShs 70 per transaction
Utility Proposition –Bill Payment
Organizations can use the service for collecting
payments for:
Utilities, e.g. Power & Water accounts
E-Ticketing
Membership subscriptions
Insurance premium etc
In future this will be expanded to facilitate in-store
payments for merchants
Benefits of M-PESA
To Consumers
– Convenience
– Speed of service
– Affordability
– ‘Pay as you go’ model
– Availability
– Safety
To Businesses
– Access to potential
customers
– Cost effective means of
revenue collection / funds
disbursement
– Additional income & ‘feet
through the door’ as Agent
– Complements other services
as Agent
Climate Change
Benefits to institution
• Incremental Sales (foot print)
• Improves “Brand”
• Good PR
• Member engagement
• Staff engagement
Some Products
Key Questions:
• What are the main drivers & trends behind green financial
product/service development?
• What is the current & potential demand for green
products/services?
• What green financial products/services are currently being
offered around the world?
• What best practices & lessons learned can be identified?
• What are some key opportunities to consider in terms of the
development & marketing of green financial products/services?
Awareness
“As environmental understanding and awareness grows in
Africa, so does the demand for products and services that
advance environmentally sustainable lives, livelihoods, and
communities.”
BarclayBreathe Card (BarclayCard)
Fleet Loan (Bank of America)
Home Equity Loan (New Resource Bank)
Climate Change Mortgage (VanCity)
Green Building Replacement and Upgrade Coverage
(California Fireman’s Fund)
Recent Polls and Market Research
75% of Americans
acknowledge their own
behavior can help
reduce global warming
According to
a recent poll
by Yale
University:
75% of the US public is
willing to purchase solar
panels, and 67% would
consider buying a hybrid
vehicle.
81% of Americans feel it
is their responsibility to
take action against this
environmental
challenge.
63% of Americans believe
that the US is in as much
danger from environmental
hazards….as it is from
terrorists
The Business Case
Improved market share
Increased profits
Customer acquisition and loyalty
Higher employee satisfaction and retention
Reputational benefits (improved brand image)
Positive media attention
Environmental awareness and benefits
Improved license to operate
Strengthened relationships and partnerships
with external stakeholders
Green Retail Product Areas
RETAIL BANKING
Green Loans
Lower interest rates than market level for loans to
purchase cars with low GHG intensity and high fuel
efficiency, to purchase energy efficient appliances
or solar, biomass and other renewable installations
at homes
Green Mortgages
Lower interest rates than market level for mortgages
to purchase new energy efficient homes, invest in
retrofits and energy efficient appliances
Green Cards, Sales, Accounts
Deposit accounts and debit/credit cards linked to
donations to environmental NGOs by the bank.
Carbon neutral credit/debit cards (i.e. emissions due
to production of the card are offset or emissions
linked to the purchases made by the client are
offset).
Green Leasing
Leasing of environmental and GHG abating technology
Green Insurance
Insurance premium differentiation on the basis of
environmentally relevant characteristics.
Microfinance/micro-credits
Microfinance in developing countries of emission
Retail Banking: Lessons Learned
• True innovation is not simply the introduction
of new niche green products for retail
clients, but the integration of environmental
incentives into mainstream offerings.
• A number of product designs can transcend
eco-areas. For instance, a climate product
can be tweaked to encourage water
conservation or waste reduction.
• The most successful products over the longterm will ensure the delivery of real and
verifiable environmental benefits.
Emerging Opportunities
 Achieve high levels of financial performance?
 Attract a particularly large number of customers?
 Last over time, and is re-launched year after year?
 Raise the environmental awareness among all stakeholders?
 Receive positive attention from the media and ENGOs?
 Prompt the introduction of other eco-products and services?
 Improve brand recognition and corporate image among
stakeholders?
Emerging Opportunities
• Sun - Use of our abundant sunshine for
solar power in cookers,
• Wind – wind power in wind mills for
irrigation and water transportation
• Land - Land for planting woodlots and
carbon sewers
• Biodiversity – Bio gas, fuel etc
• Other opportunities for new products
Take Home Messages
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Be Innovative
Embrace Environmental Leadership
Ensure Environmental Integrity
Educate & Motivate Stakeholders
Collaborate with Stakeholders
Be Consistent
End
Mercy/Regarde/Thank you
AFRACA