Launch of the 2012 Cotton Farmer Payment Project at the Nc’wala Traditional Ceremony

Farmers clad in the traditional dress of the Ngoni people hovered around as I was handing out flyers describing Mobile Transactions’ latest e-voucher project, creating new ways to make payments to rural cotton farmers. A few passer-bys noticed the prominent Dunavant Cotton logo on the flyer and stuck out their hand to get a flyer and learn about what was going on.

My name is Chris Mwaba; I am the voucher Assistant at Mobile Transactions Zambia (MTZ), a company that I have been with since August 2010. Over the past weekend, I and my colleagues, Hans, David and Azalea left Lusaka for the Nc’wala Tradtional Ceremony in the Eastern Province of Zambia to launch the Dunavant Cotton farmer payment project for 2012. Nc’wala is a celebration of the first fruits of the harvest, taking place over the last week of February. During the ceremony a bull is slaughtered and the chief (now Mpezeni IV) ceremonially drinks some of the blood. Thousands of farmers from around the province and country, many of whom are cotton farmers, travel to witness the ceremony.

Mobile Transactions is working with Dunavant Cotton to promote a new way for farmers to receive their payments for the sale of cotton, which in Zambia is a major export crop and money-maker for small-scale farmers. Payments of cash to farmers can be risky and expensive for the company. Often farmers in the rural area have little access to traditional services to save their money. While mobile phone and branchless banking penetration increases in these rural areas, a simple system using an e-voucher scratch card, akin to a prepaid debit card is being trialled. The e-voucher is a way of savings for these farmers. At the same time we are signing up local retailers to offer discounts ranging from 5-15% on everything from agricultural inputs to school supplies. Farmers are always able to take cash off their e-voucher through a Mobile Transactions agent. The e-voucher payment is secure (can be replaced in the case of theft, loss or damage), promotes savings, and attracts discounts.

It was a Friday and it all started when Hans, David and I decided to take a tour of the main trading centre in Mutenguleni, a place in Chipata rural which hosts the Nc’wala ceremony where we even bought ourselves what I would call the “local head gears” for the Ngoni people, which are made out of animal skin. We had thousands of flyers in our truck to distribute, and I wondered what response we would get from the farmers. To our surprise, in a few minutes, our hands were almost empty. Rushing back to the truck to pick up some more flyers, it started raining and everyone rushed to shelter.

I could not believe the response that we were getting from the people, the interest they showed and the fact that they had a few minutes to spare and listen to what we had brought forth. One interesting thing I observed was that almost 90% of the farmers that I spoke to were Dunavant cotton farmers who expressed interest in the e-voucher. Ultimately, the goal is evolve the e-voucher payment into a loyalty program that rewards cotton farmers for their service. With a great start at the Nc’wala ceremony, we’re already on the way.

Crew member of a very exciting ship

My name is Juanita Schrader, about 8 months ago I became part of the accounts team of Mobile Transactions South Africa offices. I can safely say that I had no clue what I was getting myself into (I mean this in a good way LOL).

I am one of three finance administrators, the other two being Marissa Kruger and Charlton Meavers . We report to the Accountant Leshain Armstrong. In a nutshell, our duties consist of ensuring that all activities like send to banks, deposits, auto bank postings, etc are processed correctly to the banks and the system with the help of the customer care personnel Tasira Nkhata who works from the Zambia office. One of my responsibilities is to ensure that various accounts have adequate balances for these activities to happen. My other major responsibility is called the daily system and bank reconciliation. This is done daily and reconciles transactions on the banks and the system. If there are any discrepancies; then it is investigated. It is really a team effort. We work together, help each other to investigate and resolve queries and give feedback to customer care. Our work is very customer care orientated and at times can be very challenging as it would be in any other business. It is a difficult concept to grasp at times if you have not visited Zambia and seen the agents trading and doing business. When there are a challenges; we are in the spotlight and have all hands on deck to assist but when everything is smooth sailing then we give ourselves a pat on the back for a job well done.

We also provide services internally to other departments. E.g. purchase of bulk airtime, sending funds to work accounts, making payments as requested, assisting with analysis for month end processing on pastel.

This is not your ordinary 8-5 admin job. We have a very structured day and timelines for doing send to banks and checking deposits. We are involved in decision making and improving of procedure and processes which is great to know that you can make a contribution that can have an impact. It’s also pretty awesome; this is my first real job and I can truly say that these are the foundations of my career in finance. Just the other day, we imported and approved our first 1000^th automated Barclays’ batch and it felt fantastic to be part of such an achievement!

The IT Department and Accounting department are located in SA office. We recently moved into a bigger office which just goes to show we are growing .We are quite a young group of people which makes it an energetic and fun environment.

It is also a blessing to know that you have a job where you have a reason to wake up and say “oh yes I’m going to work” and not “oh work again”. So here’s to more growth personally and professionally as this ship continues on its journey to success!!

By Juanita Schrader

Finance administrator

A new type of agent

We’ve decided to try to create a new model of MTZ agent. I’m sure the idea has been done in other industries before, but it’ll be a first for us.

Outside of the Champion Agents that we directly manage, we picture that there are two types of new agents out there: those that have money but no time or inclination to manage a shop; and those that have time to manage a shop, but no money. In this post I want to tell you about our idea for the first group.

To date we’ve been approached by probably a half-dozen Zambian business men and women always asking the same thing: “I have some money, so how can I become one of your agents?” And our approach was always the same: “Here’s the contract, and here’s how much money you need, and here’s how you can check your statement, do your daily cash reconciliation, and get customer care support if you need help.”

But we’ve realized that this message is absolutely inadequate. These are businesspeople with money and multiple businesses already. They have no time. No time for customer care, or statements, or daily cash reconciliation processes. Our system isn’t difficult to master, but it does require a fair amount of ongoing oversight.

Because of these facts of the business, the end result for these potential agents has always been the same: they sign up, they put in the money, they get a manager or a niece or nephew to run the shop, then within a month or so the money is lost/stolen/unaccounted for and they close up shop.

So we thought of something different. What if all these people had to do was put in their money and we provided all the day-to-day management by training a person at head office and giving them a percentage of the revenue? We’d share the revenue earned from commission, with the outcome being the businessperson gets a steady stream of income and we get a new, liquid agent.

We’re going to try it in Kitwe, a Copperbelt mining town. For us who are always tight on cash, it’s a way to free up a lot of untapped capital and grow the liquidity of our network. But also, the businesspeople that may invest also know of other business opportunities and could open new doors for our agents. If we can generate a healthy and low-risk return for businesspeople keen to invest their money, then it could be a way for us to use the age-old owner-manager dynamic to grow our agent network much faster and further.

Graham Lettner,

Agent Manager.

e-Vouchers: Transforming Local Economies

A woman and her malnourished child walk to their local grocery shop to redeem a food voucher she received at the nearby government clinic. The grocer exchanges the voucher for a food basket containing locally produced and milled maize meal, the country’s staple food. The small-scale farmers who grew the maize bought their seeds and fertilizer from rural retailers, who were, in turn, subsidized by a local organization promoting sustainable agriculture. And all the seamless transactions in this localized economic ecosystem were made possible by a simple but transformational technology – electronic vouchers.

Zambia is a country of 12 million people in the heart of southern Africa. It is characterized by low population density, high poverty rates, and political stability. 70% of Zambians live in rural areas, 60% are engaged in agriculture, and 15% are affected by HIV/AIDS. Zambia is by all accounts one of the poorest countries in the world, ranking 150 out of 169 on the 2010 UN Human Development Index.

As such, Zambia is on the receiving end of millions of dollars of aid, and vouchers are becoming the preferred method of delivering it. Vouchers allow beneficiaries to become customers, giving them the power to choose and demand what they need from local retailers instead of receiving items that are shipped from half a world away. The idea behind vouchers works well in theory, but it has had problems on the ground. Paper vouchers result in long, bureaucratic paper trails. Retailers complain of delayed payments and donors of forgery, fraud, and a general lack of accountability.

Mobile Transactions Zambia Limited (MTZ) pioneered an e-voucher product in September 2009 as a cost-effective way for both development sector and government clients to deliver traceable subsidies to their intended recipients. The technology is simple: A scratch card with a unique serial number is given to a targeted beneficiary by a local institution, such as a clinic or farmer group.To ensure security, the vouchers are linked to individuals by their National Registration Card number. Once linked, they can be redeemed at retail agents chosen by the client. The agent processes the voucher by accessing MTZ’s online platform using a mobile phone, triggering an instant electronic payment into the agent’s MTZ account for the value of the goods given out, with a profit margin reflecting prevailing market prices. The agent can then use this electronic credit to order from suppliers, sell airtime, send money transfers, send it to a designated bank account, or access mobile banking services that MTZ’s other business units offer.

The e-voucher business model is driven by a set fee charged per e-voucher redeemed. This means that the e-voucher system is not economic at small volumes because of the management and system development costs of its delivery. Thus, MTZ has focused on improving the efficiency of its e-voucher delivery to reduce overhead costs per e-voucher and allow the company to effectively scale with more clients thus increasing total e-voucher numbers. The e-voucher business unit will be financially viable when it serves enough beneficiaries to cover costs and provide a stable profit margin.

To date, MTZ has redeemed 280,000 e-vouchers for almost 60,000 beneficiaries in Zambia. Our clients include the World Food Programme (WFP), the Food and Agriculture Organization (FAO), the Conservation Farming Unit, and CARE International. Our partners include government clinics and the Ministry of Agriculture and Cooperatives. The e-voucher system has already been replicated across sectors – both food and agricultural inputs – with future expansion planned into health (delivery of subsidized drugs, such as anti-retroviral treatment for HIV/AIDS patients) and welfare (social cash transfers targeted at the poorest 10% of the population). It has also scaled regionally, with food vouchers redeemed in Zimbabwe since June 2010 and Mozambique since March 2011.

The social and economic impact of this product is enormous. Firstly, e-vouchers irrefutably improve the cost-effectiveness of current aid projects. One of our customers has reported 40% cost savings over conventional methods of distributing aid with greatly reduced inventory reconciliation issues. At a time when aid is under fire for being ineffective and inefficient this is great news and it has been recognized as such by donors, small businesses, and beneficiaries alike.

Secondly – and most significantly - e-vouchers create a series of positive knock-on effects in the local economy and community. Aid agencies disappear into the background as local businesses become the face of product and service delivery. MTZ works almost exclusively with small businesses that are stalwart members of the community in order to ensure confidence and trust in the e-voucher. Relationships are strengthened between farmers, millers, retailers, government agencies, and the end customers as much-needed welfare is delivered to the community by the community itself. Instead of being undermined by conventional methods of development, the local economy thrives.

E-vouchers are a winning product in Zambia, but introducing them has not been without its challenges. Pricing the vouchers has been difficult from the beginning as clients did not immediately understand the size of the management and system development costs required to make the e-voucher system work. It was also difficult to maintain a steady stream of clients because of the transient nature of donor projects. It has taken time for MTZ to develop management processes that can scale-up and scale-down quickly and efficiently as voucher numbers fluctuate. However, with several proof-of-concept projects under their belt, MTZ is now developing a standard package, complete with flexible and customizable system features and back-end management practices, to take this to scale.

e-Vouchers enable aid agencies to drastically improve health, welfare, environmental, and livelihood outcomes in marginalized communities; they stimulate localized economic activity by working with local businesses and through local channels; and, they generate revenue for a company that is extending mobile banking services to those who need them most – the unbanked and unconnected. They are a cutting-edge product that will transform economies all over Africa.

This blog was submitted for the BOP competition and made it to the final round. It was written by: Thulasy Balasubramaniam and Graham Lettner

Hellenah Mwansa: Champion Agent

My job involves selecting and training 20-something Zambians to start their own money transfer franchises in different towns all across the country. We call them our Champion Agents.

Hellenah Mwansa is one of these young agents I’m very proud of. She finished our training course in April and we promptly sent her up to Ndola, 400km north of Lusaka where she had been living, with instructions to find a location, set up a portable booth that she’d pick up at a town along the way, and start transacting.

But just two weeks into her new job she fell sick. Malaria, most likely. While she went to a health clinic and began treatment almost immediately, she was still almost completely incapacitated. Bedridden for a week, maybe more. During all of this all she asked me for was $10 to buy the vitamins and fruit juice the health clinic recommended she take.

Yet this past week when I drove up to visit her and a few of our other agents, she was cheerful, smiling, and had her shop back on track. She had arranged a deal with the manager of the YMCA to rent some space from her for her shop; had hired a girl, Linda, as her store assistant; and was out for the better part of the day handing out flyers to potential customers around town.

Almost all of our new agents are 20-somethings like Hellenah. They are who our company (Mobile Transactions Zambia; MTZ) will rely on to be the backbone of our network of financial transactions in Zambia.

Graham Lettner,

Agent Manager.

Passion, Pride, Pace and Professionalism

It’s quite strange to think that less than 30 days ago I was working in a small town in Wales called Bedwas managing a large scale Welsh Government project subsidising Leadership and Management training for Small and Medium Sized businesses.Since first stepping into the old, cramped Cairo Road office I have been struck by the pace, enthusiasm and stretch of the work of Mobile Transactions. 16 working days into my short experience I have already developed and agreed a project plan aiming to pay 22,000 East Zambian Farmers with e-vouchers, braved the bus to Chipata and negotiated with almost 20 Zambian businesses.

There’s been a great deal that I have had to learn. As Brad puts it, there are no safety nets working for a start up business. Most tasks need to be undertaken independently – the processes and expert services of my corporate background simply do not exist. When I walk into a room with Zambia’s primary retailers of school books, or one of the biggest fertiliser importers, I have to rely on my own preparation and ability to present a competent and coherent proposition.

The opportunity is hugely rewarding for me and I don’t think I’m alone. I have seen all of MTZ’s people pushing themselves out of their comfort zone to develop new systems, strike new payments deals and forge a strong and stable agent network. When I return to work for Government, I hope that I will adopt this brave spirit and demand even greater hunger and accountability to do the work we do from those around me.

So what’s useful from the Welsh Government that MTZ can adopt? 16 days in, it’s a completely impossible assessment to try to make. However one issue might be that MTZ’s strengths could also be it’s weaknesses as it moves forward. Always stretching ourselves should not lead to over promising. A fast pace must not mean sacrificing support, when that is needed. Enthusiasm must not lead to burning out.

That’s why Mike’s plan for the company and the ambition to develop a coherent structure for MTZ’s work is absolutely crucial. Good governance and support structures shouldn’t stifle and can provide a framework that means that a business isn’t always out of its comfort zone. This means discipline, and will usually mean some changes. The best ideas come from all parts of businesses so there must be a space for people to share and debate them confidently and openly.

The Civil Service’s motto in the UK is Passion, Pride, Pace and Professionalism. MTZ absolutely embody these qualities. The challenge now is to enshrine these in a framework for a very bright future.

By The Welsh Civil Servant,

Tom Taylor.

Playing both sides

I was in Kenya earlier this month attending a Grassroots Business Fund regional workshop. While I was there, I took a couple extra days to skulk around Kibera market and travel out to Kisumu on Lake Victoria all in the name of seeing M-PESA agents as work. Being the most successful mobile banking market in the world, there was lots to learn from them.

In Kisumu I met Victor, PEP Intermedius’ agent manager, who graciously spent the entire morning fielding my questions and querying me with some of his own. Their operation is more fluid and established than ours, and the number of agents PEP manages (150, just 1% of all agents in Kenya) is equal to the total number of agents we have across Zambia.

What shows just how different the Kenyan mobile payments market is to Zambia’s is that PEP is just one of dozens of companies that manage agents for M-PESA. Here in Zambia, there’s only us. We manage 100% of all the agents in Zambia. In effect, we’re both PEP and M-PESA at the same time: we manage the agents and we run the mobile payments system.

It makes for a lot of work, and unfortunately less single-mindedness in our business goals, but it also offers a lot of opportunity. Instead of a tug-of-war between M-PESA and the companies managing agents, we can try to find a optimal balance between our mobile payments business system and our on-the-ground agent network. Hopefully it’s something that we’ll be able to use to our continuing advantage as the Zambian market develops.