Uganda is Transitioning into A Cashless Economy – MTN Uganda’s Elsa Muzzolini.


The Mobile Money business is one of the fastest growing sectors in Uganda, with telecoms giving banks a run for their money. Boasting of over 10 million subscribers, MTN Uganda is at the forefront of the Mobile Money revolution. Money’s Consolate Kyarikunda interviewed Elsa Muzzolini, MTN’s general manager Mobile Financial Services, about the sector performance and prospects. Here is how it went down.

Since its launch in 2009, MTN Mobile Money has become a big part of Uganda’s financial inclusion drive. How many subscribers does MTN Mobile Money have currently? How many of these are active? How much money has the service handled so far?

Currently MTN Mobile Money has close to 10 million subscribers, with more than five million active. From the total on the platform including the telecom, and the subscribers, the service has handled close to Shs 400 billion.

From 2010 to early 2013, there were several reports around MTN Mobile Money fraud with some MTN staff accused of conniving to steal this money. Even though MTN later clarified that the losses never affected the customers, this tainted the service and painted it in bad light. Have these gaps been completely dealt with? How safe is mobile money today?

In any lucrative business, people will always think about cheating. Since that incident, we have put several lines of control in the mobile money team that easily detect anomalies. There is regular internal and external auditing too. The way we are today, we have made the life of a cheater harder internally. I believe we have managed that risk and the system is safe.

Most of the risk is on the agents out there. Sometimes they change their employees quite often and do not give them adequate training. That is why I caution them to be more conscious. It may be very expensive but invest in security first. To all users; be protective of your pin. Always check your balance immediately for complete transaction evidence.

MTN has had an ESCROW partnership with Stanbic Bank since Mobile Money inception. Is it a marriage of convenience because of the regulatory mandates or is it MTN’s choice to be more effective?

It was a commercial decision with one of the biggest banks. Very few banks then were willing to enter into such a partnership thinking it would create stiff competition for them, but Stanbic bank was ready and they understood the mobile money operation.

Why has it been only Stanbic for a long while, yet we understand your competitors work with several other banks?

We have a very good relationship with Stanbic bank and it met all the MTN regulations and still does meet all our needs. It also has a good relationship with all the regulatory bodies in Uganda. With Stanbic bank, there is no friction, no fines, and no audit issues among others. So far, we are very satisfied with the service it is providing us.

Wouldn’t more ESCROW accounts make the mobile money eco systems more effective?

Probably. It would create more opportunity to get more float. It would be more convenient for MTN to make sure that they are compliant and for the agent to get easier access to more float because we cannot plant money elsewhere.

In 2016, you rolled out MTN MoKash; an innovative mobile financial product. How is it performing?

MoKash has over 3.5million subscribers with 1.7million active. Since its inception, MoKash has handled over Shs 50 billion with an average loan of Shs 25,000. Most of the money that has been disbursed has been recovered.

Minus it allowing users to save and borrow money, MoKash has a loan limit challenge. Many users are complaining of very low loan limits even when they pay promptly and religiously. For instance, there is a user who has used the service for a full year, has never defaulted but her loan limit is still Shs 15,000. Yet there is another one who registered last month, but his loan limit is Shs 50,000. How do you come up with these loan limits?

This is an example of credit limit, and it is one hundred percent managed by CBA Bank. If it was MTN doing it, it would probably be different. But because we have partnered with these banks and they took on this opportunity, they apply so many different criterions like age, gender, so forth. I believe they do this to counter any anomalies. The bank takes on the full responsibility of applying loan limits and setting the rates. We don’t give every data like the personal details of our subscribers to the bank. What I think happens in this kind of situation is that they consider like how much airtime you use, how much mobile money you usually have that meets this criterion, how many reimbursements you make, if you are a very loyal customer to MTN etc. We want to change and improve our clients’ credit limits because the example cited above shouldn’t be the case.

Do MoKash Loan limits relate in any way to someone’s other loan obligations: for example, if you are servicing a loan in another bank, does it affect your MoKash loan limit?

Here, the Credit Reference Bureau comes into play. One’s loans in other banks can be used to affect one’s loan limit for MoKash. If one has a bad debt in another bank, this will probably lower your score. However, MTN challenges banks with different targets because MoKash and typical Bank loans serve different objectives and should be handled quite differently. MoKash is actually a complementary product to the banks as we give small loan amounts needed immediately that the banks do not and can’t give.

Your biggest competitor, Airtel Uganda, last year rolled out Wewole – a micro-loan product. Its users praise it for having a more progressive loan limit, with individuals’ loan amounts growing significantly every month. Why can’t you borrow a leaf?

Airtel’s product is not managed by a bank. So, you will find that the services we offer do not have the same rates and prices. You will find that the interest rates given by Airtel keep changing regularly, whereas with MTN, there are no surprises when it comes to the interest rates. It is more stable; you will find that as the rate was yesterday, it is still the same today, for a given period of time, which is not the case with Airtel.

Following its huge success within one and a half years, are we likely to see MoKash and other micro-loan products replacing bank loans?

All micro-loan products are complementary to the banks. They are more of collaboration than competition or a replacement. These micro-loan products help banks on the digital side as customers push money to bank accounts, and do withdrawals. This collaboration is a commercial agreement with the banks.

MTN recently launched MomoPay as a bold step into merchant payments: How is this expected to help transform Uganda to becoming a cashless economy?

Today, 90% of the customers do cash transactions which are not secure; when they receive mobile money immediately they withdrawal the money, they have to travel to make or collect payments. MomoPay provides a safer way to handle cash; instead of rushing out to receive the money, one receives and keeps the money on the phone, and can make direct payments there. And with no physical cash at hand, MomoPay is also another way of saving money.

What are the categories for merchants expected to sign up for MomoPay? How many merchants have so far signed up for MomoPay?

Every merchant can apply; the subscription is lenient. To date in Kampala only, about 8,000 merchants have signed up for MomoPay.

Remittance and international corridors were expected to be smoother and cost-friendly with digital platforms but customers still perceive digital financial service fees and forex rates to be costly for remittance. What can be done better to change this?

The breakthrough would be opening new corridors to give more options of intervention in Uganda including getting more and more partners from countries such as the UK or USA to send money indirectly in form of remittance. This price facilitation can be expected to improve in the next months.

How much money can someone receive and withdraw in a day?

The maximum amount one can receive is Shs 7 million, and more than Shs 50 million shillings on the bank account. One can do ten transactions in a day. However, any suspicious transactions are reported.

What step have you taken to protect the mobile money agents?

We send persons to agents regularly to educate them and give them warnings about fraud cases/issues and how to protect themselves against such. And I do caution the mobile money agents to be responsible enough and train their employees as a way of strengthening their security.

As a woman, what does it mean leading the country’s biggest mobile finance sector?  

It is great to have women in management positions in order to inspire other women, especially in sectors greatly dominated by men. But having an office goes beyond just being a woman; it’s about fulfilling/accomplishing the duties of that office, taking decisions, listening and inspiring your team. I am proud to be a woman in this position as I believe that there is a women style of management that is shaping a more inclusive and aspiring corporate life.

Leading mobile money in Uganda is the occasion drive growth of payments and moving away from a cash economy. This will increase the time-saving capacity of individuals and thus gain productivity; time that would have been spent in collecting money from and making payments in the bank can be used for other productive activities. The lives of both the customer and the merchant will change for better when operating in a cashless economy. In the next few years, I see mobile money as one of the biggest opportunity in areas of providing security, and means of saving both money and time. I embrace innovation for Uganda as a young woman leader.

Do you face any challenges as a woman business leader?

There are 2 main challenges for a woman to take responsibilities: one is you as a woman the limits you impose to your actions and the second one is the attention you give to doubtful perception of you; where people question your capability and whether they should follow your leadership. As a woman in a position of leadership, you should be self-conscious of those 2 bias and continuously question yourself against it. Your reaction to such will determine your success. In such a challenging environment, you set your own rules of operation.

What message can you give to all the young girls out there?

Believe in yourself, think big and stop being a self-depreciating person! Do not give a lot of importance to negative comments from others. And always be willing to take risks and do big things because you can.

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