Archive for: Pakistan: Tameer Microfinance Bank

This blog post summarizes a quick review of commercial investments in mobile financial services and branchless banking. We focused our review on equity deals between 2005 and 2010 involving mobile payment companies, agent companies, payment platforms and others providers that we knew were targeting the financially excluded in developing countries. We looked at press releases and other publicly-available sources for information on deal sizes and structures. We also included a few notable deals involving banks such as Telenor’s acquisition of Tameer Microfinance Bank in Pakistan and the creation of BanKO by Globe Telecom and others in the Philippines. The dataset is available upon request (technology@cgap.org).

Here are a few basic findings:

• 47 deals with USD 400 M in cumulative volume between 2005 and 2010
• Average deal size of USD 7 M with the largest number of deals under USD 4 M
• Most investments were in technology companies but new opportunities are emerging
• International Finance Corporation (IFC) was the most active investor globally
• India was the most active market

Click on images for clearer view

47 deals with USD 400 M in cumulative volume between 2005 and 2010.  Whether USD 400 M is sizeable or not depends on your perspective. It is sizeable if you consider that grant funding to companies in branchless banking between 2005 and 2010 totaled well below USD 100 M. From the perspective of those of you watching the larger payments or mobile money environment, the total size might be small, but there are a number of additional factors to keep in mind. First, a large share of the USD 400 M is attributed to a single deal – Obopay’s deal at USD 139 M. In fact, investments made into four firms – Obopay, Cointel, FINO, and Monitise – account for 60% of volume. Second, there are roughly 15 deals with an amount that was not publicly available or disclosed to us. Lastly, USD 400 M is not the complete figure of private investments made into mobile financial services or branchless banking. That figure is significantly higher if you consider internal investments made by mobile network operators, banks and others into their implementations.  Read the rest of this page »

John Staley from Equity Bank in Kenya predicted that “retail banking will be done via the mobile phone”, especially in developing countries.  Mung-Ki Woo from France Telecom-Orange explained that traditionally a telco’s job is to facilitate the exchange of information between people, and “now with Orange Money, Orange wants to faciliate the exchange of money between people.”  Nadeem Hussein from Tameer Microfinance Bank in Pakistan said it was a “10-minute decision” to partner with the telco Telenor, which instantly provided Tameer with thousands of agents, a sophisticated network to manage these agents and a strong brand.

Intrigued?  You can watch the entire discussion between John, Mung-Ki and Nadeem moderated by CGAP on October 20 at the IFC’s FinNet 2010. Watch the video here.

- Sarah Rotman

Today during a panel at IFC’s FinNet 2010, CGAP will host a live discussion with some of the world’s leading mobile money providers at 2:00 pm EST / 6:00 pm GMT.

CGAP’s new CEO Tilman Ehrbeck will introduce the session. Steve Rasmussen, the Manager of CGAP’s Technology Program, will then lead an interactive discussion with:

• Nadeem Hussein from Tameer Microfinance Bank in Pakistan, which has launched the branchless banking service easypaisa in partnership with Telenor.
• Mung-Ki Woo from France Telecom-Orange, which has launched the mobile payment service Orange Money in several countries in Africa.
• John Staley from Equity Bank in Kenya, which most recently launched the M-KESHO service in partnership with Safaricom.

Post your questions here, and we’ll ask them during the session.  Follow the discussion on a live webcast at this link starting at 2:00 pm EST / 6:00 pm GMT (Note: link will not be functional until the event begins): mms://wbmswebcast1.worldbank.org/live

- Sarah Rotman

Each year, IFC’s Advisory Services’ Access to Finance Business Line organizes an annual networking and knowledge building event. FinNet 2010 will bring together this week more than 400 internal and external people in the area of Financial Inclusion/Access to Financial Services at the World Bank headquarters in Washington D.C. This year’s annual event is titled “Access to Finance 2.0 – Financial Inclusion for Development” and the main events will be held this Tuesday and Wednesday. 

On Wednesday, October 20 at 2:00 pm EST, several of CGAP’s technology project partners will be featured on a panel entitled “Accelerating Access to Finance Through Technology: Mobile Banking.”  CGAP’s new CEO Tilman Ehrbeck will introduce the session. Steve Rasmussen, the Manager of CGAP’s Technology Program, will then lead an interactive discussion with the following three technology project partners:

• Nadeem Hussein from Tameer Microfinance Bank in Pakistan, which has launched the branchless banking service easypaisa in partnership with Telenor.
• Mung-Ki Woo from France Telecom-Orange, which has launched the mobile payment service Orange Money in several countries in Africa.
• John Staley from Equity Bank in Kenya, which most recently launched the M-KESHO service in partnership with Safaricom.

Even if you aren’t in Washington for this event, you can still follow the discussion on a live webcast at this link: mms://wbmswebcast1.worldbank.org/live

Access the site to hear mobile banking pioneers discuss their challenges and opportunities on Wednesday at 2:00 pm EST.

- Sarah Rotman

Safaricom’s M-Pesa is now so well known in the mobile banking world that it has come to be accepted by some as a blueprint for mobile financial services. The service relies on the phone in the hands of the customer (now more than 12 million) to perform transactions and the phone in the hands of the agent (all 20,000 of them) to credit and debit accounts. But in markets that have either lower penetration of mobiles or higher fragmentation among operators, offering over-the-counter (OTC) payment services may be an important alternative, or additional, strategy.

In Pakistan, CGAP’s partners Tameer and Telenor deliberately decided to take a two phase approach in the roll out of EasyPaisa. They gave agents the phone first and trained them to process OTC transactions, so that they would become comfortable with the service. The customer didn’t need to have a phone at all to transact at the agent, but they would get an SMS receipt if they did. Six months later they launched the mobile wallet which allowed customers with a Telenor phone to have their own account hosted on their personal phone. But one year after launch the OTC service has been such a huge success that it accounts for the vast majority of transactions and revenues.

In the Philippines where Globe’s GCASH service is approaching its sixth year of operations, Globe has taken almost the reverse approach. In the early years they focused on the mobile wallet to drive usage among “early adaptors”.  Later they offered OTC “cash pick-up” for the “laggards” and they are now heavily marketing the domestic remittance service – GCASH Remit. With the recent approval of a network based license, allowing e-money issuers to be fully responsible for ensuring customer protection and compliance with the regulations, GCASH has scaled their agent network to 18,000 CICOs (cash-in and cash-out points) where OTC transactions can be carried out. GCASH Remit is available to the whole population including their competitors’ customers and those that don’t have a phone at all (not to mention people that have a phone, but are just not confident in using it for complex new services). 

Read the rest of this page »

Delivering aid in Pakistan

Every reader of this blog will have seen the heart-breaking pictures of the impact of the flood in Pakistan. Many of us will have also made donations to relief agencies that are doing what they can to help those that have been worst affected – probably by using our credit or debit card on line. In Pakistan, branchless banking providers are facilitating both the mobilization of donations and the disbursements of cash to those that need it most.

CGAP’s partner in Pakistan, Tameer Microfinance Bank, and their parent company, Telenor Pakistan, have made it possible for people in Pakistan who may not have internet access to make donations to relief organizations using their EasyPaisa mobile banking platform and have removed the usual transfer fees. EasyPaisa account holders can make donations direct from their mobile wallets and anyone can walk into one of 6,000 agents to contribute to the work of organizations including the Pakistan Red Crescent Society and SOS Children’s villages. They are also in discussion with a number of NGOs about using EasyPaisa to help them to distribute payments to people who have lost their homes or their livelihoods and Telenor themselves have pledged over Rs 213 million (USD 2.5 million) to flood relief efforts.

Read the rest of this page »

The Globe and Mail uses next month’s World Cup as a good reason to talk about Africa’s economic growth:

For the first time, Africa is becoming a bigger lure for investors than for aid donors. Africa’s poverty rate has been declining by 1 per cent annually since the 1990s, and investment is growing dramatically. A decade ago, Africa was receiving less than $5-billion (U.S.) in foreign investment annually. By 2008, it was attracting nearly $40-billion in direct foreign investment – more than it received in foreign aid. One survey found that 40 per cent of emerging-market equity investors are putting money into Africa today, compared with 4 per cent in 2006.

Read the rest of this page »

I would be pretty annoyed if my bank started to charge me for putting money in to my bank account. What strategy would CGAP’s partner in Pakistan, Tameer Microfinance Bank consider with their “mobile wallet”?  I spent a week in Pakistan with Ali Abbas Sikander and the Easypaisa team who have been thinking about their pricing strategy for the past three months.

Read the rest of this page »

EasyPaisa, the m-banking service by Telenor and Tameer, went live on Oct 14. They call it the “largest branchless banking service in Pakistan” on their website where you can watch a couple of the ads that people may have been discovering on You Tube.

Photo courtesy Patrick Cooks

3000 agents have been set-up to handle both bill payments and remittances. They aim to have many more trained and branded by Jan. They have covered the country with marketing, promoting the brand everywhere and pushing people to the agent network. The advertising has generated a lot of buzz and interest and their two call centers are fielding over 5000 calls a day. As of two weeks ago, they had all the major billers signed up and those previously not interested were now calling them (see here about a minor scuffulle in the media about billers which seems to have passed).

They are seeing modest success. Within the first few days, they handled 20,000 bill payments ranging from very large to small at an average ticket size of $13.

Why is this launch any more interesting than what we are seeing in other markets?

First, it is true that even in Pakistan, m-banking services have been live for a while. Mobilink partnered with the post office chain and has been in the market for almost a year. But what is unique about EasyPaisa is the business model. Telenor owns part of Tameer and that provides for unique advantages on the cost side and benefits in terms of product design.

Second, the partnership illustrates the possible tie-ups between a MF provider and a MNO. In this case, the MNO bought the MFI. In other cases, the MNO could strike a revenue sharing arrangement with the MFI in exchange for access to its distribution.

Third, the partnership illustrates how regulation and policy decisions from both the banking and telecom side can add up to produce impact. On the banking side, regulation opened up the market for the use of retail stores as agents (CGAP has been involved with branchless banking regulation in Pakistan from the beginning). Regulation made it possible for a bank and telecom operator to enter into unique partnership arrangements.

On the telecom side, MNOs are in a race to the bottom in their core business. Prepaid ARPUs are half of what they were three years ago. This race to the bottom has been precipitated by new licenses (there are seven operators in the market today) and number portability. MNOs had to climb the value chain of services faster than what you might see in the other markets.

The EasyPaisa service is within the bounds of the vision and strategy CGAP set out with Tameer Bank originally: it is both bill payments and remittances (our original financial model was with bill payments); people have the option of opening a savings account; KYC is automated using the national ID which now covers over 50 million people.

We have a lot to be optimistic about but one of our main concerns right now is that account opening is possible only at a subset of agents, roughly a third of the network. This is because of SBP requirements over account opening. While EasyPaisa locations where you can open an account are still sizeable in number, we know from the M-pesa experience (and common sense) that you want to make it as easy as possible to get people to start transacting. People will be able to do cash-only transactions (cash to cash or cash to account) at all EasyPaisa locations; so that helps. But we are figuring out a way to make account opening possible at all agents – possibly a specialized device or a document management system or something else.

-Kabir Kumar