elrico munoz spbd fiji - using the mobile phone as a financial delivery channel

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USING THE MOBILE PHONE AS FINANCIAL DELIVERY CHANNEL-- The Case of SPBD Fiji

Presented by: Elrico V. MunozGeneral Manager

SPBD Microfinance (Fiji) Ltd.

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ABOUT FIJI ISLANDS

• Total Population – 850,000, of which 87% are in the islands of Viti Levu and Vanua Levu.

• Population Density: 46/km2

• GDP per capita : $4,620• Mobile Phone Users: 315,000

SOURCE: Wikipedia, citing 2007 Fiji Census

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ABOUT SPBD MICROFINANCE FIJI

• Established in Dec 2010 as the third country operation of the South Pacific Business Development (SPBD) network.

• Currently has 5400 clients (of which 3,500 are borrowers) -- all of are women

• Operates in 3 branches – Suva, Sigatoka and Savusavu

• Loan portfolio – USD$660,000

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WHY USE THE MOBILE PHONE TECHNOLOGY?

• To reduce risks associated with cash handling• To increase efficiency of Field Officers• To provide more convenience to clients

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How Many Times Money Is Counted?The Way We Were

Client

Group

Centre

CentreManager

Cashier

Bank Teller

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2

3

4

5

6

7

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How Many Times Money Is Counted?The Direct Banking Solution

Client

Group

Centre

CentreManager

Bank Teller

1

2

3

4

5

6

Cashier

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How Many Times Money Is Counted?The Short-Lived Digicel Experiment

Client

Group

Centre

CentreManager

Digicel Agent

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2

3

4

5

6

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How Many Times Money Is Counted?The Vodafone MPaiSA Way

Client

SPBD

CentreManager

MPaisa Agent1

2

Exchanges Cash to eMoney

Pays SPBD with eMoney

Informs CM of Payment

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SPBD MPAISA SYSTEMMPAISA AGENT

E-FUND

SPBD REVOLVING

E-FUND

MPAISA AGENT

SPBD BANK ACCOUNT

VODAFONE HOLDING

ACCT

VODAFONE HOLDING

ACCT

SPBD CLIENT

E-money

E-money

E-money

CASH

E-money CASH

CHEQUE

CHEQUE

E-money

Loan Disbursement

Savings W/Wals

E-moneyLoan PaymentSavings Deposit

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WHAT WORKS?

• Reduces counting of money from 7 times to 2 times

• Removes cash handling of SPBD staff• Revolves eMoney instead of cash

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WHAT IS NOT WORKING?

SUPPLY SIDE• NETWORK Coverage limits• MPAiSA Agent limits:– Service areas– Liquidity

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WHAT IS NOT WORKING?

DEMAND SIDE• Mobile Phone Ownership limits• Technical limits:– Physical limits– Ability limits

• Psychological limits– Client– SPBD Staff

“80% consider using physical cash as most

comfortable mode, less than 50% trust MM, and

only 40% consider MM as a low cost service”

- PFIP, Mobile Money Attitudes and Perception

Omnibus Survey2012

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DID IT IMPROVE EFFICIENCY OF FIELD OFFICERS?

In a Way Yes....• Centre Meetings are more focused on

interaction with clients rather than just counting and recording payments

• Field Officers have more time doing office work after the field rather spend such time counting money for turnover to the Cashier

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DID IT IMPROVE BOTTOMLINE?

Not Really....• While cash counting was reduced• Back-Office Processes increased– eMoney liquidity maintenance– MPAiSA agent support– MPAiSA platform – SPBD MIS interphasing

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IS IT MORE CONVENIENT FOR CLIENTS?

Hmmm Yes and No....• Yes because they can pay anytime, No

because MPAiSA agents are a rare species and have limited liquidity

• Yes because they don’t have to pay bus fares to visit SPBD Office to withdraw savings, No because there are additional fees associated to paying SPBD and converting e-money to cash.

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IS IT MORE CONVENIENT FOR CLIENTS?

Hmmm Yes and No....• Yes because they know their payments are

safer from fraud and theft, No because they need to memorise several numbers: PIN, MPAiSA account codes and SPBD payment code

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CROSSING THE TECHNICAL DIVIDE

The Case for Common SIM for CentresOne Centre One SIM (OCOS) for exclusive use of SPBD payments

• To address issue of mobile phone ownership• To address issue technical and psychological

limits

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CROSS THE TECHNICAL DIVIDE

The Case for Common SIM for CentresOCOS what? How it supposed to work?

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CROSSING THE TECHNICAL DIVIDE

The Case for Common SIM for CentresOne Centre One SIM (OCOS) for exclusive use of SPBD payments

• Started on Pilot February this year• Centres are encouraged to be the MPAiSA

agents for their respective village• Existing SPBD-MPAiSA agents go roving

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QUO VADIS SPBD FIJI?

Be flexible• Loan disbursements and savings withdrawals

and 100% MPAiSA.• Collection -- For 2013– 50% of its Centres will be 100% MPAiSA – 30% Direct banking model – 20% Traditional Cash Collection

• Beyond 2013 increase MPAiSA use to 75% of Centres

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VINAKA VAKALEVUThank You!