Mobile Money

 

According to an article written recently MTN is said to have traded about 16 Trillion UGX on its mobile money platform (http://www.telecompaper.com/news/mtn-uganda-mobile-money-value-increases-by-24-in-2015--1108916). 

The success of mobile money platforms are part of much bigger coming together of several related and unrelated events or happenings. Digitization or computerization, a change in the fortunes of the middle class, an age of relative stability, changes in Economies that have favored the largely agrarian class, a tendency away from traditional banks and other financial behemoths, as well as the corresponding rise of alternative small lending services. 

Digitization or computerization.

There is no continent on earth with a greater cell phone penetration and in which the citizens have access to more hand sets. This is in part due to the aggressive computerization and digitization policies that have been it into place by governments and their partnerships with Mobile Operators. The decision to privatize many of these telecom operations brought about a sea change in thinking and resulted in much greater investment into these sectors. This also brought about much needed change in the Education Sector as well as in Employment as thousands of students found themselves needed to acquire a fresh set of telecommunication related skills. Others in government identified additional linkages that would cut across sectors and created outsourcing centers and schools which developed call centers, enhanced customer care services and boosted sales and advertising strategies. 

Changes in the fortunes of the middle class.

Employment opportunities and a rise in income mean that citizenry can demand access to better services and enhanced lifestyles. A thriving and active middle class can then begin to engage directly with with an innovative business, entertainment and educational sector to create modern services which favor a group of citizens that control a lot of the cash that circulates in the Economy. 

An age of relative stability. 

The business people and investors often find it easier to invest in stable countries than they do in unstable ones unless off course they are in the business of Relief or the sale of Arms and munitions. 

Changes in Economies that have favored the largely agrarian class.

An economy that is driven by agriculture finds great benefits in payment methods that are simple to engage with and that can guarantee results for the trader, the farmer and the consumer. This works hand in hand with a well established transport system which ensures that goods get to the market within time. Other innovators saw not just the opportunity to revolutionize payment but also to add other related services that would help the farmer interact better with his colleagues (farmers' associations)

As well as with suppliers of machinery, and extension services. 

Tendency away from traditional banks.

Smarter banks on the local scene quickly realized that there were some changes taking place and decided to create smaller but more intimate settings. This took place as small lending services were taking over the business of lending (in places like Bangladesh). In addition to this new banks were starting small and expanding and realizing that the bulk of the users had a bigger preference for small operations.

The rise of alternative small lending services. 

The most natural thing to do for poor communities with limited income was to create small groups to help them save money and also to support larger group projects. Because very few of these groups so the need to leave their traditional settings, small lending platforms were born. They were really community banks run by local citizens and supported in a large part by non governmental organizations which had done the ground work necessary in meeting the citizenry. 

Concerns and threats. 

The platforms have been on the whole effective and have not been designed to operate fully as technical groups in mobile platforms. In suburbs all over the city, we have seen mobile money agents set up small kiosks where users can make payment for essential services like water, power and TV subscriptions. Others have integrated fuel payment options while others are working on enabling users to pay for their groceries. The smarter kiosk owners has therefore found himself having to expand and transform his business to favor the changing needs of his populace. Perhaps the weakness of these platforms has been in not being able to fully eliminate the large amounts of cash that are traded in these spaces. This has therefore made the agents vulnerable to attack and theft. 

Other threats have arisen from software and hardware as wells as from disgruntled employees.