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lower costs for all actors

7.2.1 Mix of revenue streams

In order to lower the cost of accessing services, ICT

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to keep operational and service delivery costs low. Mixed revenue streams are comprised of end-user fees, FI and government payments, and fees from telecommunication or other private companies gaining clients from this service.

All projects include an end-user fee component in their model. For FINO end-users the registration cost is borne by government or FIs, but remittance transactions carry a direct cost of service. Bradesco end-users pay m-banking

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lower than full-service banking fees. The price of new life insurance schemes is embedded in clients’ phone subscriptions.

Case study list

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services have gone and she is selling an increasing amount of FINO insurances. She sells most insurance policies to women, as she has a great network of women from before she started to work at FINO.

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main advantage of FINO is that it has a basket of products and can serve several needs of its customers.

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This was indeed what the customers interviewed in the shop mentioned as well as the progress to be made.

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governments as good sources of revenue for ICT

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reduce their costs. FINO and Bradesco are both used by the governments of their respective countries to channel state payments for pensions and other state programs. In partnering with FINO, banks and FIs pay a one-time fee per new client (and commissions on deposits and withdrawals in the case of banks). In the case of MYC4, FIs that channel crowd-investors’

money share the risk with them and with MYC4, receiving interest only upon reimbursement.

In cases where projects use tele- communication platforms and mobile coverage for service delivery, it makes economic sense for telecommunication

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services as this new offer can allow them to gain new clients and reduce churn. For example, offering free insurance embedded in airtime can result in increased subscriber retention rates and increased sales of airtime,

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conditioned to remaining in the scheme for a given time or spending a minimum amount each month on communication.

7.2.2 Leveraging existing infrastructure for service delivery

Piggybacking on existing networks (both in terms of

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services limits investment costs, and has been the strategy of choice for all examples examined here. In the case of m-banking, around one billion people are unbanked but own a mobile phone, representing an untapped market for banks reachable via m-banking solutions.73 _{Using existing telecommunication}

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1) Get a new source of revenues for ICT (in particular telecommunications) companies

2) Extend customer base at low cost (compared to

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Other branchless banking solutions are also cheaper

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agents rather than building full agencies from scratch.

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$250,000, versus $2,000 to equip a local agent with the necessary software and hardware tools to conduct at least basic money transfers, deposit and withdrawal operations, and in the case of FINO for example, gather applications for insurance and loan products.74

By integrating established agents as service providers, projects reduce their cost of scaling up while at the same time building their brand by associating it with trusted persons in the community. For example, Bradesco

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M-PESA is provided by Safaricom airtime resellers. Both are now also recruiting local retailers as agents, in any case people with which customers are already familiar. MYC4 also uses existing networks of trusted local providers, usually NGOs, to screen businesses seeking loans. FINO, which did not have any network when it started, recruits members of good standing within target communities and whenever possible people who already have a small shop or an activity with frequent contacts with their community, rather than introducing foreign agents and building new retail points.

To successfully leverage existing trusted agents, projects

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their agents to educate and recruit new clients. Bradesco, FINO, M-PESA and MYC4 all compensate their agents

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agents may enjoy 3 times higher revenue from their M-PESA commission than from simply selling airtime.

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for its agents, be they full-time or part-time. In the case

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request Bradesco to recruit them as agent (rather than wait for Bradesco to come to them).

73 _{Mobile money for the unbanked: Unlocking the potential in emerging markets, McKinsey, June 2010. Available at: http://www.mckinsey.com/clientservice/Finan-} cial_Services/Knowledge_Highlights/Recent_Reports/~/media/Reports/Financial_Services/MoP8_Mobile_money_for_the_unbanked.ashx

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www.cgap.org/gm/document-1.9.44170/Technology%20to%20Reduce%20Costs%20by%20CGAP.pdf

To set up successful

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need:

1) a trusted brand that people

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2) to build a dense, liquid network of outlets where customers can reliably convert their physical cash into digital money and vice versa; 3) to invest heavily in marketing to build trust and awareness in the new scheme. Inadequate marketing has been the cause of many failures in

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Customer life cycle / End-user experience in local agent business model

7.3 Scale requires expansion beyond