Mark Pickens
Mark Pickens is a Microfinance Analyst with CGAP’s Technology Program. Prior to joining CGAP he consulted to Amret Microfinance, Bank of Africa, USAID, UNCDF and worked with Development Alternatives, Inc. , a consulting firm specializing in economic development solutions in emerging markets. Pickens has helped launch four institutions that successfully mix for-profit sensibility with social mission, including CGAP’s technology program, New York City’s largest business incubator for immigrant entrepreneurs, an award-winning internet news portal, and a public health non-profit in Madagascar. He has a Master’s degree in microfinance from Columbia University.
by Mark Pickens: Monday, June 7, 2010
You want proof mobile money can make money? Look to M-PESA, which according to Safaricom’s annual financial statements released just a few days ago accounted for 9 percent of company revenues in the last fiscal year, for a total contribution of USD 94.4 mil (Ksh 7.56 bil). M-PESA revenues grew 158% over last year’s figure of USD 36.6 bil (Ksh 2.93 bil).
 M-PESA as percentage of Safaricom's data revenue. ©CGAP analysis It’s not just the gross revenue amount that is surprising. Two more things caught my eye.
First, Safaricom is lauding 78% growth in data revenue as the main engine behind the overall 37 percent growth in company profits (to USD 261.9 mil). And M-PESA now accounts for 48% of all data revenues, and 70% of the total growth in data revenue last year. In other words, this year M-PESA was the single biggest driver of new profits for Safaricom. Goodbye SMS as the #2 revenue source, at least for this mobile network operator.
Second, M-PESA may be delivering even more to the bottom line. A little guesswork is involved. The service is 3+ years old. Safaricom still incurs variable costs of agent commissions, marketing, HQ staff. But if they’ve paid off the original large, lumpy front-end investments in the M-PESA platform, the huge initial marketing blitz and no doubt a few high-priced lawyers to help sort out regulatory treatment… well, it would not surprise me if a substantial portion of M-PESA revenues now flows directly through to profits. Let’s say it’s half; in other words, USD 47.2 mil in profits from M-PESA. And we know Safaricom’s overall profits for 2010 were USD 261.9 mil. In this scenario M-PESA is generating 18% of all Safaricom profits.
Not bad. Not bad at all.
-Mark Pickens
by Mark Pickens: Tuesday, June 1, 2010
Last week at the Mobile Money Summit I had the pleasure of moderating a discussion with Daryl Collins (co-author or Portfolios of the Poor) and Olga Morawczynski (now with Grameen Foundation’s AppLab in Uganda — Olga and I also co-authored a brief on M-PESA customers last year, based on Olga’s PhD research).
I worry some mobile money providers won’t see the volume of transactions they want to justify the investment, unless they go beyond offering a simple liquid wallet and mobile remittances. If they can get traction with a value proposition like Safaricom did, with 45% of the population signing up — then great. But Kenya was a market where everything aligned just right, not least of all the very poor competition M-PESA faced from banks, bus companies and the post office. We’re seeing that few countries offer such dramatic opportunities.
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by Mark Pickens: Monday, May 17, 2010
 photo by Claudia McKay In the past few weeks, my colleagues have blogged about our study of agent networks in India. You can see our overall analysis of agents (called CSPs or Customer Service Points in India). The India research was one part of a three-country study (along with Brazil and Kenya) that highlights the critical role agents play as the key interface between branchless banking providers and customers.
In this post, we look closely at FINO. FINO has 10,000 agents, distributed across 25 different initiatives with nearly 40 financial institutions, with more than 13 million registered users accessing a range of products from no frills saving accounts to NREGA government benefits to microloans and insurance.
FINO started life as a firm focused on banking technology, but necessity has forced FINO to become skilled in agent network management as well. By some measures, FINO is the world’s largest agent manager. FINO is putting together some tools we’ve not seen in Brazil and Kenya, countries which get a lot more attention in branchless banking.
FINO’s solution starts with something deceptively simple. Every field staff member sends a SMS to headquarters when they leave home and head for the field each morning: almost like taking attendance. FINO then melds this with transaction data showing when and where field staff meet agents, and the transaction details of agents and customers, yielding a massively data-rich mash up which FINO color-coordinates, uses to generate scores for every staff member, and makes sortable. The end result converts tens of thousands of data points into an easily absorbed visual interface. And this is all online, easily accessible to FINO staff.
When I saw it, it comes across as a system designed to provide not perfect information, but “good enough.” For instance, a dishonest staff member could send a text from bed saying he was in the field. But as FINO’s Jatinder Handoo puts it, “You cannot lie forever.” Absences will appear. Other data will show that staff person’s agents do not perform as well, that clients don’t transact as often.
The key is pattern recognition. That’s where the color coding, scoring and sortability of FINO’s system comes into play. The worst performers slide to the bottom, and two staff in headquarters in Mumbai are able to follow up over the phone, typically on the same day. FINO can also single out the best agents to examine more closely. In the long run, this should provide a goldmine of data helping FINO improve its agent networks, and ultimately the quality of financial services it delivers for its partners.
-Mark Pickens
by Mark Pickens: Monday, April 19, 2010
 photo by Claudia McKay The regulatory changes made in India last year have uncorked a stream of new branchless banking launches. Three new providers have or are just about to go to market.
They join three other firms who have been beavering away at branchless banking and are now gearing up for big growth: FINO, Eko, and A Little World.
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by Mark Pickens: Monday, March 8, 2010
Recently I counted the number of mobile money launches by mobile network operators in 2009 and those confirmed for 2010. I included only those with a focus on low-income consumers. (Some, perhaps most, also target other segments, looking for the widest base to achieve the fastest uptake, which seems quite reasonable.)
For 2009 and 2010, I count 15. That’s twice as many as in the previous 8 years combined. Mobile network operators have clearly heard the news, and are responding with a bevy of mobile money launches. That’s a win for all of us who have been talking about branchless banking for several years, and believe it can change the landscape of financial services for the poor.
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by Mark Pickens: Thursday, February 25, 2010
This is the final blog in a series about the impact of branchless banking agents in Brazil. Sarah Rotman blogged about how two merchants – Nestor and Roberto – see the business, and Claudia McKay examined the impact on communities and consumers, looking through the eyes of a small town in the Amazon.
These insights come from a recent mission to Brazil to look at the business case for agents (termed “banking correspondents” in Brazil) and good practice for building a viable agent network. We partnered with the Center for Microfinance Studies at FGV (Fundação Getulio Vargas) and PlaNet Finance Brazil.
This post looks at the national-level impacts of having such huge agent networks. Brazil has the largest agent network in the world with more than 140,000 agents, 47,000 of which are authorized to handle deposits and open accounts. By comparison, there are 3x fewer bank branches nationwide. But the impact goes beyond just the number of service points…
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by Mark Pickens: Tuesday, February 16, 2010
This week we’re blogging from Barcelona, site of the Mobile World Congress. Today is the second full day of focus on mobile money, where the GSMA’s Mobile Money for the Unbanked working group convenes market players to compare notes. CGAP Microfinance Specialist Mark Pickens is presenting the latest work we’ve been doing on agents.
Industry actors say their biggest unknown is how to build a viable network of branchless banking agents. Over the next 3 months, CGAP’s Technology Program will analyze agents in 3 reference countries (Brazil, India and Kenya). Because this area is so new, we will be out in the field ourselves talking to agents, network managers and banks.
We’ve already begun in Brazil, where CGAP is partnering with The Center for Microfinance Studies at FGV (Fundação Getulio Vargas), the leading Brazilian business school. Planet Finance Brazil is also a partner in the field research. Data was gathered on 295 agents, 49 of which were interviewed in-person. Read more about this collaboration.
-Mark Pickens
Next: A round-up of mobile banking developments from the Mobile World Congress.
by Mark Pickens: Thursday, February 11, 2010
 We often think of branchless banking without looking at the nonprofits working in the community for social and economic development. Two colleagues and I were in Brazil in December to understand the business case for agents (termed “banking correspondents” in Brazil) and good practice for building a viable agent network. We partnered with the Center for Microfinance Studies at FGV (Fundação Getulio Vargas) and PlaNet Finance Brazil. In previous posts, Sarah Rotman took a detailed look at how two agents – Nestor and Roberto – see the business, and Claudia McKay talked about agents’ big impact on a small town in the Amazon, previously 12 hours by boat from the nearest bank.
In this post, we look at Instituto Palmas, a nonprofit working in Brazil’s northeast, the poorest region of the country. Joaquim is the charismatic former priest who runs Instituto Palmas. When you meet him, two things immediately distinguish Joaquim from other NGO managers.
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by Mark Pickens: Friday, January 22, 2010
Some of you probably saw a snippet on the nightly news about Secretary Clinton’s speech on Thursday about freedom of the internet and other technology. If you read CGAP’s recent focus note on the future of branchless banking in 2020, you’d know we also think the internet is going to have a deep qualitative impact.
It turns out Secretary Clinton had a lot to say about mobile banking. I found three parts particularly relevant for the work we do on banking the unbanked.
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by Mark Pickens: Wednesday, January 20, 2010
It’s been an interesting week in Kenya, with several high profile announcements between banks and mobile operators:
- The second largest mobile money service — Zap — tied up with Housing Finance bank.
- Safaricom and Equity Bank announced a tie-up which enables M-PESA’s 8.5 million users to withdraw funds at Equity’s 550 ATMs (the largest ATM network in the country), which may help relieve some problems of agents not having cash.
- Equity made a tie-up in Dec. with Essar, who bought the 4th mobile license in Kenya last year and recently launched the 3rd mobile banking service in the country. Equity’s branches will serve as agents for its service YU. However, this is all one way to withdraw from a mobile wallet at a bank’s ATMs. Bank customers can’t yet go to an agent and withdraw money from their bank account. But that’s coming soon….
It’s not just banks and telecom firms in the headlines. This week, the Central Bank of Kenya plans to distribute for comment draft regulations which will finally enable banks to use agents (about 3 years since Safaricom started using agents for its M-PESA service).
-Mark Pickens
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