During a payday visit to Sankhulani Health Centre in Nsanje North, Melenia Mukongwa was not sure whether she had been paid what she had been working for all month long—her salary.
Typical of a predominantly cash-based economy, most of the nurse and midwifery technician’s neighbours in the rural border still cannot buy things or transfer funds without having what they have always known and used—banknotes and coins.
Their widespread reservations against mobile banking and other cashless financial transactions partly vindicate the verdict Opportunity International Bank of Malawi (OIBM) marketing and research officer Webster Mbekeani delivered at a mobile money conference convened by USAid in Lilongwe in November 2011: “The major challenge facing mobile money transfer is that Malawians have a poor culture of saving and potential customers hardly know about their existence.”
But save for the decried lack of awareness, erratic telecommunication networks have left the community with no option apart from relying on Makhanga brick-and-mortar branch of OIBM, a multinational bank which runs the phone-based cash transfer facility called Bank M’manja, meaning “a bank in hand”, to ease the burden.
OIBM is the only bank that heeded the hard-to-reach Nsanje North community’s call for financial inclusion while “many shunned it, citing poor security in the border stretch”, according to Nsanje North Member of Parliament Frank Viyazgi.
Mukongwa, one of the three health workers at the health facility targeting a community of 30 000 people, says she prefers keeping cash at home.
“To find out whether government has deposited salaries into our accounts, we have to spend around K1 000 on cyclists that operate bicycle taxis on a 20km road to Makhanga branch of OIBM Bank. As a result, we prefer keeping cash at home because bank visits cost a good chunk of our money,” she said.
While the rural population is crying for reliable phone network facilities and lamenting long travels to a solitary banking facility, people in town enjoy access to a diversity of banks and mobile technologies that do not only guarantee them timely bank statements and alerts, but also flexibility when paying bills, purchasing goods as well as transferring cash.
The gaps at Sankhulani might be news in urban areas where banks are concentrated, but it a harsh reality to rural populations, including civil servants who have been getting their salaries through bank accounts since 2011.
Among the emerging technologies, service providers are harnessing the popularity of mobile phones to deliver cutting-edge services conceived to make life better. Apart from OIBM’s Banki MManja, the spectrum includes National Bank of Malawi’s Mo626Ice, NBS Eazy Mobile, FMB Mobile as well as Airtel Money.
That Airtel Malawi’s facility is nicknamed Khusa M’manja (cash in hand) speaks volumes of the extent mobiles phones can go to put financial services even at the finger tips of those living far from banking facilities at a time financial inclusion has become a global buzzword.
The dilemmas of hard-to-reach rural folk—coupled with regular sight of masses queuing in congested banking halls—could be symptomatic of the need for not only change of attitude towards money but also reliable technologies to spur banking facilities to unreached ends.
Mobile phones have transformed lives in developing countries alike, affirms UNCDF in a statement on mobile banking for the poor.
“Of the world’s 7 billion people, there are now 6 billion phone subscriptions globally compared with 2 billion or so bank accounts. Across 40 UN-designated Least Developed Countries (LDCs) surveyed by UNCDF, mobile phone penetration was at 30 percent while access to a bank account was 14 percent on average,” reads the United Nations fund assessment.
This resonates in the country where only 19 percent of the country has access to formal banking, according to a 2008 study by the financial research firm, Finscope. This means the population without bank accounts is almost equal to that of phone-holders connected to Airtel network alone.
Recently, Airtel chief executive Saulos Chilima told the press that the phone connectivity firm, which has invested $100 million (about K40 billion) in the past three years, has about 3.2 million subscribers. The number of phone holders is certainly much bigger considering that other phone networks are yet to introduce money transfer services.
“We continued to innovate 3.75G technology and we had embarked on an aggressive drive to penetrate [the market] with Airtel Money and other promotion in the last financial year,” said Chilima when explaining Airtel’s multibillion kwacha expenditure.
But Chilima in his presentation at Malawi Mobile Money conference in Lilongwe two years ago outlined major setbacks to transforming the country from a cash-dependent economy to innovations that transfer money while phone users are on the go.
The list included low income levels, lack of national identity cards, low penetration of cell phones among the unbanked populations, and low financial awareness.
Other challenges included delays to put in place a “universal switch through which the telecommunications company can integrate with commercial banks”. This has left phone companies partnering banks privately—with the Airtel mobile money system affiliated to NBS Bank.
While the universal system is yet to come, the banking sector is on course to miss the strategic plan to “introduce efficient branchless banking, including mobile banking” by this year”.
“Without the universal service portal most banks are running branchless baking initiatives that are largely uncoordinated. There is need for interoperability to improve mobile banking that is already challenged by unpredictable electricity supply and unreliable telecommunication networks,” said NBM marketing manager Wilkins Mijiga in an interview.
The cash-based economy must surmount these bottlenecks to reach the last mile with branchless banking solutions.