Brian Richardson, the founder of Wizzit International, launched in 2004 on a pilot basis in South Africa. Currently operating in 9 emerging markets from 3 continents, and serving close to 10 million customers, Wizzit International partners with other leading financial institutions in emerging markets to create financial empowerment and inclusion. Richardson addresses an important gap in the market. He states:
“There are 7 billion people on the planet, half of which do not have access to financial
services. We look at Africa, it’s a continent of 1 billion people, and 85% do not have access to financial services. Many of the leading banks in the world do not have as part of their strategic agenda financial empowerment and financial inclusion. Their whole
models are geared toward the upper- middle income groups. Their belief is in fact that you cannot make money at the bottom end of the pyramid.”
The logic followed in launching Wizzit International is straightforward:
“People cannot get out of the poverty trap if they are not economic citizens, and you cannot be an economic citizen when your only means of participating in the economy is with cash. Cash is expensive, it is incredibly dangerous, it is highly inefficient, and we need to move people away from cash to something more electronic. But that implies that they have to have an account of some sort, ideally with a registered financial institution.”
Richardson went around the world, talking to the segment of the population he was hoping to access, asking one simple question: “why don’t you have a bank account?” Their reasons were not dissimilar: affordability (opening a bank account is expensive),
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accessibility (banks are typically located in urban centers), and availability (banks’ opening hours coincide with working hours). Richardson recognized that if he could solve those issues (that he refers to as the Three As’), he would have a chance at giving people access to basic bank accounts. After spending some time in the field, he found similar reasons why the unbanked would need a bank account. First, it provides a safe place where they can keep their money. Second, it is an easy way to access that money as and when people need it. Third, it facilitates transactionability, allowing people to readily send money to friends and family or purchase prepaid water and electricity. Fourth, building a banking track record is key to gaining access to loans or services such as micro-insurance (i.e. burial or funeral policies, emergency medical policy, insurance against crops and livestock). However, the stringent regulations of the banking industry make simple bank accounts inaccessible to the lower end of the market, often because they simply do not have the adequate paperwork. Revolted by what he considers a violation of basic human rights, Richardson asks “why stop a farm laborer earning less than 200 a month from opening a bank account because he can’t provide proof of residence”? He then fervently adds that “in a country like South Africa, where you can get killed for 20 rands, refusing the poor a safe way to carry their money, amounts to committing the crime yourself.”
Once he identified this market gap, Richardson set out to solve the problem of financial access through innovative technologies. He observed that “the poor might not have shoes but they got a phone because communication is very important.” However, the technology available at the time required to have a phase 2 compliance phone, a specific sim card and to belong to a specific network provider, none of which the poor
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can afford. Wizzit International was the first to launch a commercialized business that made access to financial services possible irrespective of the handset, the network and the simcard of their clients. Still, the social venture faced, and continues to face, challenges. One of them, understandably, is the distrust of the poor toward the banking industry. Richardson reflects that his social enterprise is fundamentally about changing people behaviors:
“How do you get people to go from cash, which they have grown very accustomed to, to electronic? I never thought in my wildest dreams that I would have to educate people about the risk, the insecurity, the danger of cash. Let’s take the example of people who live in camps or informal settlements, they keep money under their mattresses or bury it in holes around their houses, but everybody knows it because everybody does the same. So they stay awake all night protecting what little money they have. It is a crazy
situation.”
Carrying the State’s Burden: The Role of Social Entrepreneurship
Social entrepreneurs’ mission to change society is particularly relevant in a political context where developmental programs for achieving social objectives such as poverty alleviation and employment are no longer provided by the state. With joblessness rising and government resources dwindling, universities, businesses, and social enterprises are persuaded to tackle unemployment themselves. In an interview with the Chronicle of
Higher Education, ProfessorIrene Moutlana, vice-chancellor of Vaal University of
Technology and deputy chair of the South African Technology Network, says:
“unemployment has triggered a focus in higher education across the country on the notion of entrepreneurship. Universities need to produce job creators instead of job seekers. That goes hand in hand with the National Development Plan […] this means that we have to form a value chain. An idea comes in, you convert that idea into something
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commercial and then you transfer it for the upliftment of society. It is that meaningful transference that gives it a greater depth as an entrepreneurial product” (MacGregor 2015).
Susan Steinman, the then director of the Centre for Social Entrepreneurship and Social Economy (CSESE) at the University of Johannesburg, states: “the biggest creator of employment is the social sector”. She adds: “if I look at what we achieved in Soweto: all our social entrepreneurs employed more people at the same time as they were
addressing social ills. That’s fantastic. We can get people to create jobs and tackle social ills. When you create jobs, you change the world.”22 The following case study
corroborates Steinman’s assertion.