Q&A with Estelle van Niekerk, Etisalat Afghanistan’s mobile financial services specialist
(This post has been reproduced from Mobile Money Explained, published by Sonum Puri, Head of Mobile Money at Clarion Events. It shows how the service provides a unique offering that will truly increase access to financial inclusion in Afghanistan)
Estelle will be speaking alongside over 30 leading mobile money pioneers in Asia at the 3rd annual Mobile Money APAC Conference and Expo on 30 January to 2 February in Singapore.
Q:How will the mHawala service increase access to financial inclusion in Afghanistan?
A:Lowering financial transaction costs will encourage customers from low income individuals – who typically engage in smaller value transactions – to utilise formal financial services, and they will therefore become part of the formal financial services sector and be able to build up a transaction history that will in turn allow them to apply for loans and credit. In this way financial inclusion will be stimulated across a wider base.
Q: What does mHawala mean and how did the name originate?
A:Hawala means “money transfer or money exchange” in Arabic and ‘mHawala’ translates as mobile money transfer or exchange.
Q: What does the service allow customers to do?
A:The registration system creates a virtual “bank” account or “mobile wallet” for the customer that enables him/her to make bank balance enquiries, check the last four transactions on their mini statement and purchase prepaid air time top up; the last service mentioned is the killer application; meaning that it usually leads to quick uptake and is a widely required service. Customers can also make transfers to other people and the central bank has allowed inbound remittances (i.e. sending money into Afghanistan) but not outbound remittances. We are currently in the process of signing agreements with remittance companies to set up international mobile remittances into Afghanistan. We are launching cash in and out services, (customers can deposit money into their accounts at banks and a wide network of selected retail outlets throughout the country), but ultimately customers will want to withdraw some of these funds in cash – this will also be possible through an eventual envisaged 3,000 outlets throughout the country.
We are offering bill payments via mobile phone and bill delivery via mobile phone. We are currently in discussion with utility companies in Afghanistan to allow customers to pay for electricity and water through mHawala. Apart from consumer services, we are expanding our services to include salary payments to employees by private companies and the military. By mid 2012 microfinance institutions will use the service for loan disbursements and repayments.
Q:How is the agent network set up for Etisalat?
A:Etisalat has 3,500 agents who represent the company. Many of them are prepaid airtime vendors. These same agents will be used as mHawala agents and they will be targeting the customer base which they currently serve. These agents have a presence in 84 provinces throughout Afghanistan.
mHawala was launched last week, and we are in the process of recruiting, training and promoting our agent network. These agents are very important for the project to succeed and because of the important role they play, they are selected on several criteria such as good financial standing and reputation in their respective communities.
A tiered network structure made up of super dealers, franchises and agents is in the process of being established. Cash in and out and liquidity management are some of the biggest challenges that will be faced by our agent representatives. Our solution for liquidity management is to provide the agent access to a super dealer and to do the cash out through them; in the event where they do not have enough cash available.
Q: What makes mHawala unique?
A: All four major operators in Afghanistan offer mobile money services. mHawala is the most comprehensive service.The two differentiating factors are pricing and service – both the quality of service and the range of transactions to be offered. We will compete on both providing the most competitive cost as well as the widest range of services. Ultimately the competition between operators will benefit the consumer through a wider service choice and lower prices.
Q:What else did you need to consider for the successful launch of mHawala?
A:Back office, customer care and service to agents (they sell to the customers) are very important considerations. Our brand promise is convenience and customer care. We are investing heavily in training and education for staff, and on educating consumers. Afghanistan is a complex environment, with people from diverse cultures; speaking different languages, vastly unbanked and living in cash based economies. The first challenge to overcome is to get potential customers to trust the system of mobile financial service. Mobile network operators are at a slight advantage in this area because banks are viewed with some suspicion.
Q: How have you marketed mHawala?
A:Our marketing strategy has involved TV, radio and newspaper advertising; we have also ensured that when a customer walks in to an agent the staff are well trained on the mHawala service. The service is very easy to use, it has a simple menu system and is available in three languages (Dari, Pashto and English) covering the entire country.
Q: In August, USAID provided a grant totalling $2.1 million to the major MNOs in Afghanistan, including Etisalat to expand mobile money services. How important is it for NGOs and governments to provide funding to service providers to help them launch mobile money services?
A:Very important, because mobile money is a high risk investment and there are a number of failures and very few success stories internationally. By providing this incentive organisations such as USAID are mitigating some of the risk involved. Mobile money is high in terms of poor success rates internationally but it can have a large reward. I believe mobile money will be successful and make a huge impact on the lives of many in Afghanistan.