9th August 2016 will forever be remembered as a day that revolutionized banking!
On this day, MTN Uganda and Commercial Bank of Africa (CBA) opened up banking for the majority of Uganda’s unbanked population by launching a convenient and innovative mobile financial service named MoKash.
MoKash allows MTN Mobile Money subscribers to save between UGX 1 shillings to UGX 1.6 million, earn interests ranging from 2% to 5% on their savings and also get short terms loans of up to UGX. 1 million repayable within a month. In brief, with MoKash, MTN, a mobile telecommunications company by inception now offers the same vital services as all retail banks in the market. The only difference comes in the cash amounts/limits involved. That is to say; micro vs. macro financing and saving.
Just like Mobile Money, first launched by MTN Uganda in 2009, MoKash will definitely transform not only telecommunication business but the entire financial sector. Meanwhile, Airtel Uganda’s Savings and Loans product is also in the offing. We wait for the red brigade to unveil it whenever they are ready.
Barely seven weeks after its launch, MoKash already has over 0.6 million registered customers and more thousands and millions are expected in the coming weeks and months.
“We have received positive feedback from the public, our customers and other stakeholders. This is reflected in the customer sign ups and we are on track to get 1M customers in 3 months. Over 600,000 customers have so far registered for MoKash since its launch one and half months ago. We also see steady growth in customers’ deposits as well as loans,” Phrase Lubega, the MTN GM Mobile Financial Services (MFS) told HiPipo Money recently, adding;
“Over 150,000 customers are already saving with MoKash. Over 30,000 MoKash customers have taken out loans.”
Like you have read above and maybe from other write ups, most feedback around MoKash is rosy!
Nonetheless, just like many new products, MoKash still has some teething troubles that should be urgently addressed by the product owners or else they may hurt customers and change both the script and flow of what is currently a good story.
For instance, while MoKash’s saving function is working perfectly well, the borrowing arm is still very limited and somewhat letting down some customers.
Between September 9th and 24th, HiPipo Money conducted a random survey with over 30 MoKash registered customers. All these were able to save but only a handful could borrow. Whenever those that couldn’t borrow checked their loan limit, they received a zero limit flash message seen below.
“Your loan limit is UGX 0. Save more to Mokash to grow your loan limit!”
The figures from MTN validated the above survey findings. On more than 600,000 MoKash customers, only ‘30,000 had taken loans by 18th September.’
So, how much savings are required for one to be able to borrow on MoKash? Minus savings, what else is required for one to start borrowing with MoKash?
The MTN team acknowledged our findings and stated that MTN had “noticed some customers have a loan limit of 0 and are in the process of re-analyzing their data to update their limits where applicable.”
MTN’s acknowledgment of the nagging issue and commitment to fixing it soonest meant that there was no point dwelling on the issue any further.
That said, there is one patent matter very close to MoKash that needs some audience. Even if most media is silent about it, I will rise it here and now.
For a month, I have had in-depth discussions with friends about MoKash, its relationship with our banking sector and overall technology ecosystem. The facts, arguments and counter-arguments from our discussions depict a banking sector that is slow, and somewhat detached from the market realities of the environment in which it operate.
It is a fact that in November 2012, Safaricom and CBA launched M-Shwari (M-Pesa/Mobile Money Savings and Loans) in Kenya.
It is again a fact that in May 2014, CBA in partnership with Vodacom Tanzania introduced M-Pawa; a service that effectively allowed Vodacom M-Pesa customers to save and borrow money using their phones.
It is also a fact that on August 9, almost four years after Kenya got M-Shwari and two years after Tanzania received M-Pawa, MTN Uganda partnered with CBA Bank and rolled out a similar product for Uganda. CBA Bank appears in all these three projects.
Thus it is true to conclude that through having more unbanked people join the banked grid, CBA Bank is deliberately spearheading financial inclusion across East Africa. Whether planned or coincidental, CBA deserves more than a standing ovation for a financial inclusion job well done. Other banks are doing some recommendable work too but CBA is making a more tangible and believable difference.
CBA Bank is currently Kenya’s biggest bank by customer numbers with over 12 million customers as of December 2015. These are mainly Safaricom M-Pesa subscribers that registered for M-Shwari service and automatically became account holders of CBA Kenya. By end of 2015, these customers had transacted over KEX 70 billion (about UGX 2.3 Trillion) through CBA Kenya. So you know; one by one makes a bundle.
In the same spirit and logic, CBA Tanzania and CBA Uganda are rapidly growing their customer bases through exploiting already existing technologies and platforms, in this case; utilizing existent mobile money technology. Barely seven weeks after the launch of MoKash, CBA has already registered more than 0.6 million customers (MTN MoKash Subscribers) thus becoming the fastest growing commercial and retail bank by customer base in Uganda. With such uptake, unless something drastic and unexpected happens, it is only a question of time before CBA becomes the biggest commercial bank in Uganda and Tanzania like it is in Kenya.
Other Banks Missing OUT!
But where were the other banks when CBA Bank was sealing this deal with MTN Uganda. They missed in action when CBA signed with Safaricom (Kenya), then didn’t show up when CBA signed with Vodacom (Tanzania) and now even in Uganda, they are nowhere to be seen. I mean was Stanbic Bank, Centenary Bank, Standard Chartered Bank, Crane Bank, Postbank, DFCU, and Barclays among other banks sleeping and thus missed their flights to Innovation Centre, 216, 14th Avenue, Fairlands and as such couldn’t close such a lucrative and game changing deal with MTN Group?
What were the other Banks’ research and products development teams up to when CBA Bank was developing this product in 3 East African countries? Is this line of business copyrighted to CBA ‘first’ before other banks come on board in East Africa?
There are just a lot of questions but with no clear answers.
Efforts to hear from several banks about this matter were futile as for days, none of them replied to the emailed questions. Those that did either promised to respond but haven’t until now or questioned, perhaps downplayed the media where the required content was expected to run. YES, we are only a digital platform and as such, they saw no urgency, maybe no need to respond! Had it been traditional media, sure deal, the feedback would be prompt. Analogue characteristics are still allover the place.
But again, we are not deterred. The resolve to contribute towards the development of Uganda’s tech industry through supporting different stakeholders, appreciating good work, and keeping players in check is what keeps us going. The digital revolution is real. It can only be delayed but won’t be stopped.
Ironically, with MoKash, other banks are now face to face with very honest and bitter realities. One of their cash goat is threatened and now, they have to move faster or else that cash goat may burn.
Just like how it was in Kenya and Tanzania, more banks are going follow suit and unveil related products very soon. I have learnt that Stanbic Bank Uganda has already tested a savings product and intends to roll it out any time soon. But why wait for that long!