CEO Update - Monday August 30

Hi everyone,

Mobile Transactions had another week of progress and of course a few challenges.

We successfully disbursed 78 Harmos microfinance loans through our Lusaka champion agents. Harmos is an MFI that was set up as part of World Vision's "Vision Fund" and was Mobile Transactions' first MFI partner. We are ramping up with them to process all of their Lusaka disbursements this week and then rolling out to the Copperbelt and Southern Province. We are also targeting September to launch loan repayments through our agent network.

We processed 269 Dunavant salary payments to their banked employees. We are now processing Dunavant's entire banked payroll country wide except for the Eastern Province, and expect to achievethat milestone in September.

Vouchers also had their best week ever, with 6,964 redemptions. This is related to more efficient voucher distributions from WFP implementing partners. The Conservation Farming Unit (CFU) came online with voucher redemptions thanks to Hans' hard work, and we are targeting a September 10 launch date for Food and Agriculture Organisation (FAO) input vouchers.

Both Mobile Transactions and our agents realised a 5% increase in gross profit after changing our money transfer pricing in July. Money transfer numbers were down last week as compared to the last, primarily due to our Lusaka champion agents running into liquidity constraints. Graham and his team are working hard to address this and have signed up some new cash wholesale agents to come online this week.

We signed up the Zambia Emory HIV Research Project (ZHERP) as a new payments customer at the end of last week. Mobile Transactions will be providing a payment solution for ZHERP's 140 banked staff and over 500 unbanked community health volunteers.

And perhaps the biggest news of all: the Bank of Zambia confirmed that we could go ahead with our MaKwacha agent brand! We had received initial approval from BOZ but then noticed Zain had changed their new mobile account flyers to the same name. Before we even notified the BOZ, they informed us that they have asked Zain to change their name to something else because we were using it first and had asked their permission. This shows the strength of our relationship with BOZ, and how constructive they have been regulating the emerging mobile payments industry in Zambia.

The challenge will now be to increase the liquidity of our agent network to support more payouts. Brad and I are focused on signing up new customers and driving transactions, while the agents and operations team led by Graham, Dave, and Teddy have their work cut out for them to keep pace! We have a strong agent value proposition and the agent team needs to roll up their sleeves and hit the pavement to bring on more, better agents, and ensure they are properly trained and managed.

Finally, Mobile Transactions was featured in the Corporate Social Responsibility report for NEXT, our key partner on the Dunavant project in the East. You can read about us by clicking the link below and downloading the report (see page 17).

http://www.nextplc.co.uk/nextplc/corporateresponsibility/corprespreport/

I wish everyone a focused, productive week.

Best,

Mike

Mobile Transactions pays Dunavant casual workers!

Here's an update from our Champion Agent in the East, Michael Sakala:

Mobile Transactions has been proved the fastest way of getting paid by casual workers for Dunavant in Katete.

This follows the payment made to them on the 18/08/2010 of which the actual payment reflecting on Dunavant calendar is 21/08/2010; however they started receiving liquid cash today as early as 9:50hrs, as we waited for correcting of numbers which were mixed up yesterday.

So far eighteen (18) have been paid out of twenty six (26) meaning we only have eight (8) people remaining to clear the entire group. Nothing so far has been a limiting factor and I’m proud to announce that I didn’t withdraw anything from Dunavant office to get this done as it was funded by high amounts of sending customers, what a coincidence.

There is no panic from casual workers when it comes to withdrawing cash as they are coming at their own pace, otherwise I would have finished them all today but it looks like some are working all day.

I’m happy to see some casual workers demonstrating confidence in our MaKwacha accounts, to cite examples Teddy Lubinda and Ryan Lungu, they only withdrew part of their pay leaving the larger portion for savings, this signifies realized value for holding a MaKwacha account.

What is so exciting is that the oil plant is not seasonal, hence we have this relationship with casual workers from the oil department as an ongoing thing unless Dunavant stops producing oil which is almost impossible. There is no need to persuade managers again to do this for the next payment, this has now been set.

I’m looking forward to see how we can expand the areas of our operations in Dunavant or rather identify another department of the same kind where we can come in as Mobile Transactions.

Thanks to everyone who is putting a hand to see this successful, am highly indebted and humbled for your works.

Thanks

Michael.

‘’You asked, so here is exactly what I think.........’’

Seeing that this is my first blog on this site, it is only right that I begin by introducing myself: my name is Memory Chirwa and I’m the Agent Brand Manager of Mobile Transactions in Lusaka, Zambia. We are a company that strives to achieve its mission which is to turn Africa cashless.

We recently took part in the Agriculture and Commercial Show of Zambia, which is the country’s premier show held in the capital city, Lusaka. It runs for five days from the last Thursday in July to the first Monday of August each year. It offers a platform for regional and international cultural exchange, and exhibitors at the show have included companies from many countries so it’s a big affair for companies and families.

For five days straight, my team and I kept saying the same things over and over again to over 500 different people who visited our stand. Now as dreadful as that might sound, we were more than happy to do it,

as we all had one goal in mind which was to create awareness about our awesome services and learn as much as we could from the patrons. The amazing thing is once we asked for the general public’s opinion of our company and the services that we offer, their attitude was “You asked, so here is exactly what I think...” Out poured suggestions, questions, criticisms and lots of praise. We were told to our faces to extend the number of Champion Agents to all provincial capitals, to advertise more, and even the names of some problematic Agents. Some of the questions we were asked were, “what do you do? How can I be part of you? Why should I trust you with my money? How do you control your Agents to ensure that they are doing the right thing?

Our Chilubi Island Agent who is located in far off the beaten track received a lot of praise for being able to do transactions in such a remote area. We also got attention for our low transaction fees which attracted show goers to send money and sign up on our mobile Makwacha account. Our brand also got huge thumbs up and from all of this feedback we compiled a report that was used to come up with a lot of action plans which we are currently implementing.

The feedback was overwhelming and I believe the effect of the exhibition remains to be seen in the coming weeks. But more than anything the Agriculture Show taught me that people love to be listened to and if you just ask and give an ear, you can be amazed at what you can actually learn. Needles to say we learnt a lot.

-Memory.

CEO Update

Hi everyone,

My name is Mike Quinn and I’m CEO of Mobile Transactions in Lusaka, Zambia. We are on a mission to turn Africa cashless by connecting organizations of all sizes to the mass market using mobile technology and a country-wide agent network. Our products and services cover money transfers, social cash transfers, electronic vouchers for food and agricultural subsidies, microfinance loan disbursements and repayments, and salary payments to the unbanked and unconnected.

This will be the first of a weekly CEO update I will post here on both business progress and setbacks. I look forward to following the discussion.

Mobile Transactions has continued to make progress in August, although much of the focus has been on consolidating our business in preparation for a big push to become cash flow positive on transaction revenues. We have continued to make great strides as a business, but disproportionately off the back of our system development team in Cape Town. The immediate challenge to our team in Zambia is to improve our implementation and client management, while generating new business to see us into the black.

The past week has seen the completion of three foundational pieces of work that will help us achieve this goal:

First, Natalie, Leanne, Santiago, and Simon from Oxford’s Said Business School delivered a very thorough presentation that provided an implementation framework up until the end of 2010. Their presentation focused on two parts: 1) improving operations and analysis of our agent network, and 2) launching our bulk payments product with tailored value propositions to focused market segments. They struck the right balance

between strategic insight and practical recommendations, and if we follow their plan I have no doubt we will see results.

Second, Sara, our very own “legal department” and intern from the Grassroots Business Fund finished up six weeks of helping us get “investment ready”.

Sara added huge value from day one by drafting new contracts for all of our staff, preparing standard agreements for our voucher and bulk payments products, reviewing and submitting formal comments on proposed e-money regulations from the Bank of Zambia, and doing the background work on a corporate structure. Sara was a model of what “technical assistance” can and should be – a unique skill-set combined with a fantastic attitude and an ability to roll up her sleeves and get things done.

Last, but certainly not least, Ben, a volunteer with Engineers Without Borders Canada who has been living in Katete for the past 4 months, delivered a summary presentation on our farmer payment project with Dunavant. While we did not make as many payments as we planned (around 3,000), we learned many lessons that will enable us to achieve full scale in 2011. Notably, our payment system was successfully integrated into Dunavant’s outgrower system and adopted in the field, and 8 Dunavant sheds were set up as Mobile Transactions agents. We were hindered by a late start and a disappointing cotton crop, but Ben was instrumental in achieving some significant wins.

We are sad to see everyone go, but are very appreciative of the tremendous contribution they have all made to Mobile Transactions.

On the downside, we had to replace one of our Champion agents in Lusaka for performance related issues. This was disappointing for many reasons, but it is a reality in a start-up business and many lessons were learned. Graham and his agent team will be implementing improved controls and agent management structures as a result of this setback.

Looking ahead, we will be implementing a new organizational structure that will bring us more clarity and focus. Dave will take on increased responsibility in operations as his role expands to CFO / COO. He will manage Graham, Hans, and Claudius who will focus exclusively on agents, voucher projects, and NGO / microfinance payments respectively. This will free up my and Brad’s time to do what we do best – sell our products to customers and sell our business to investors.

Best,

Mike