GSMA Mobile for Development Impact publishes Zoona case study

GSMA Mobile for Development Impact supports the digital empowerment of people in emerging markets through its Mobile for Development resource. It is a central platform of data, analysis and insight used to inform investment and design decisions for mobile services. Check out what they have to say about Zoona by viewing the full case study here.

Extending reach: Mobile money in rural areas

This month, Zoona is mentioned in Jennifer Frydrych and Hege Aschim's report on the progression of Mobile Money in rural areas. Key findings show that Zoona's success is largely due to nurturing and growing relationships with local emerging entrepreneurs. Read the full article here

Zoona attends the Global Youth Economic Opportunities Summit

More than 74 million young people worldwide are unemployed.  This massive number presents both a challenge and an opportunity for the private companies, non-profits, governments, academics, and funders who are focused on creating opportunities for youth globally.  This week, Zoona joined 450+ of those most interested in creating sustainable change for youth at the Global Youth Economic Opportunities Summit in Washington, D.C.

The Summit was a great opportunity to learn how Zoona’s support for emerging entrepreneurs in Africa connects with the larger picture of support to youth entrepreneurs globally.   At Zoona, we have created at least 750 new jobs in Zambia through our agent network, and recently partnered with the National Youth Council of Malawi to recruit and train over 80 young people to manage Zoona agent locations in Malawi.

Our agents are empowered to manage their own business while receiving financing, marketing, and training support from Zoona.  Training is critical to their success; yet, it’s also a challenge, and to meet this challenge we are constantly learning, updating and modifying our training program.  Therefore, we were interested in much of the work presented at the conference on enterprise development, including the Enterprise Your Life approach to building life skills presented by IFAD, Making Cents, and Silatech.   This approach highlighted how important life skills are for youth in business.  For example, if a young person doesn’t think that she can say no to adults, she won’t say no when an adult asks her to buy something on credit, even if she would prefer not to take this risk with her business.   Considering these type of life skills, as well as considering how young women and men may respond differently to the demands of running a business, help us to build a comprehensive approach to our training program.

As Zoona rapidly expands, we will continue to integrate lessons from the wider industry as we create more and more opportunities for young people in terms of both employment and ownership.  We’re particularly excited to learn more at the Nike Foundation/Unreasonable Institute Girl Effect Accelerator next month.

For more on how Zoona is empowering youth through our agent network, I highly encourage you to listen to our agent tell you in their words by checking out these testimonials. 

Zoona has been invited to the world's first accelerator program dedicated to benefit millions of girls in poverty

Zoona has been selected to the Girl Effect Accelerator, the world’s first accelerator dedicated to benefiting girls in poverty. The program is being launched as a partnership between The Nike Foundation and Unreasonable Group. Beginning on October 31st, just outside of San Francisco, this exclusive 2-week program will bring together 10 companies that are positioned to impact the lives of millions of adolescent girls living in poverty with world-class mentors, strategic financing, and an access to a global network of support.

“Today, less than two cents of every international development dollar goes to girls – the very people who could do most to end poverty,” says Shaifali Puri, executive director of global innovation at the Nike Foundation. “As long as girls remain invisible, the world misses out on a tremendous opportunity for change.”

Zoona has been selected to participate because the Girl Effect Accelerator selection committee is convinced that Zoona represents one of the 10 most promising startups in the world positioned to empower and impact girls across emerging markets in Africa.

“We aren’t working with your typical Silicon Valley startup in this program,” says Daniel Epstein, who is directing the Girl Effect Accelerator and is the founder of the Unreasonable Institute and Unreasonable Group. “The 10 selected ventures currently operate in over 30 countries and averaged over $2 million in revenue last year off of customers living on less than $2 a day.” According to Epstein, “We are hedging our bets on true “black swans:” startups who have significant market traction, are working in the fastest emerging markets of our time, and are positioned to measurably benefit millions of girls in poverty. The team at Zoona is exactly the type of venture we are privileged to be working with.”

During the program, the entrepreneurs will be meeting with 20 renowned mentors including Jessica Jackley, co-founder of Kiva.org, George Kembel, founder of the Stanford d.school, Seth Godin, serial entrepreneur and author, and Paul Polak who has uplifted over 20 million people from poverty. 

“We are launching the Girl Effect Accelerator as a real-world experiment to better understand the impact that entrepreneurs, investors, and business can bring to girls in poverty,” says Puri. “Today there are over 250 million girls living in poverty. Every year, more than $120Bn is spent in international development assistance, yet this system has yet to produce the game-changing results we all desire for girls and the world. This program is designed to bring new problem solvers to the table: entrepreneurs.”

According to Epstein, “The Girl Effect Accelerator aims to spark a conversation around how business investors, and entrepreneurs can put a positive dent on history. Zoona serves as a prime example of a venture that is solving problems we didn’t think were solvable, in markets most don’t yet consider to be markets, with technologies we didn’t know existed – profitably. Each of these selected companies shares a common eagerness to experiment in what it means to measurably benefit millions of girls in poverty.” 

The accelerator will conclude with a Culminating Event at the Palace of Fine Arts in San Francisco on November 11th. And if you are an investor and you have questioned why entrepreneurs aren’t solving harder and more meaningful problems, you may be interested in attending the private investor gathering on November 12th.

For more information about The Girl Effect Accelerator, and to sign up for the culminating event on November 11th and the private investor gathering on November 12th please visit: http://girleffectaccelerator.com/

About the Girl Effect
The Girl Effect is a movement focused on the unique potential of adolescent girls to end poverty for themselves, their families, their communities, their countries and the world. Created by the Nike Foundation, in collaboration with the NoVo Foundation, United Nations Foundation and Coalition for Adolescent Girls, The Girl Effect is fuelled by hundreds of thousands of girl champions who recognize the untapped potential of adolescent girls living in poverty.

About Unreasonable Group
The vision behind Unreasonable Group found its roots at the Unreasonable Institute, an international accelerator for early stage entrepreneurs who leverage business to tackle major social and environmental challenges that Daniel Epstein founded in the summer of 2010. Epstein later founded The Unreasonable Group with the goal of launching a portfolio of companies that will together support the next generation of entrepreneurs aimed at leveraging profit to tackle seemingly intractable social and environmental problems.

About Nike Foundation
The Nike Foundation leverages the power of insights, innovation and inspiration to stop the cycle of intergenerational poverty. As a company, Nike believes in the power of human potential. At the Nike Foundation, we invest exclusively in what we see as the greatest source of untapped human potential in the world today: adolescent girls.

10 Selected Companies

1. Bridge International Academies: The world’s largest and fastest growing chain of schools. Educating over 100,000 children for an average of $6 a month.
2. Eco-Fuel Africa: Converting agricultural waster into clean, inexpensive, cooking fuel for Africans. Supporting over 500 women entrepreneurs and ensuring thousands of girls stay in school.
3. Embrace: Empowering mothers who are not able to access traditional healthcare. First product is the world’s most affordable ‘infant warmer.’ More than 20,000 mothers in poverty have already benefited from this life-saving technology.
4. Eneza: Fastest growing mobile education app in Africa.
5. Greenlight Planet: Sold over 2 million solar home lights to off-grid families, and continuing to skyrocket distribution and reach.
6. Jayashree Industries: Making radically affordable sanitary pads to prevent health complications and school dropout amongst girls. Over 1,500 women owned franchises.
7. Paga: #1 mobile payments service in Nigeria. Over 1.8 million users.
8. Off-Grid Electric: Using mobile phones for a pay-as-you-go service to electricity for families in extreme poverty. Electrifying over 1,000 homes with solar each month.
9. Soko: Giving disadvantaged women and girl artisans in Africa the ability to sell directly to international customers through their mobile phones.
10. Zoona:  Fastest growing and #1 mobile money operator in Zambia with a mission to help businesses grow.

The Zoona story: Empowering MSMES via Mobile Money Transfer in Zambia

In 2007, I experienced a turning point in my life. I was completing a theoretical master’s degree in Development Management from the London School of Economics following three years of volunteering in Ghana and Zambia with Engineers Without Borders Canada. I was hungry to get back to Africa as a social entrepreneur, but deep down I felt that I lacked the experience and expertise in business I would need to have the impact I craved. A friend referred me to the Skoll Centre for Social Entrepreneurship at Oxford’s Said Business School, and the moment I opened their webpage I knew I wanted to be there. I applied and was extremely fortunate to be selected as a Skoll Scholar.

The year at Oxford was game changing in so many ways. I shook hands with the visiting President of Ghana in my first month, became friends with some of the most accomplished and talented people I had ever met, built a business network to draw on in the future, and filled my brain with knowledge on topics such as venture capital, organizational design, and social enterprise business models. I also got engaged to my wonderful wife Isabelle, thanks to all of the Oxford fancy balls I took her to!

I also came up with an idea. I would start a business connecting real entrepreneurs in Africa with impact-focused venture capital funds in Europe and North America. I made a business card with the name “African Enterprise Partners” and the logo of a baobab tree and started handing it out at every opportunity. One of my professors of a social enterprise class, Kim Alter, helped me refine the idea into a pitch and introduced me to the Grassroots Business Fund (GBF). Shortly after finishing my MBA, I was back on a plane to Zambia on a GBF consulting contract in search of my first investment deal.

My very first day back in Zambia, I was introduced to two entrepreneurs who also happened to be brothers. Brett Magrath sat quietly while Brad sold me on their start-up mobile payments business that was about to launch called “Mobile Transactions”. They had had built a mobile payment platform from scratch and wanted to empower micro and small businesses in Zambia to process mobile money transfers for the 85% of Zambian consumers that don’t have bank accounts. They were motivated by making money, but the social mission was central to their vision.

I spent the next two months emphatically selling the investment opportunity to GBF, which closed when the Fund boldly invested $200,000 of convertible debt into a business with only three months of revenues. They asked me to source new deals for them but my mind was made up that I was going to work day and night with Brad and Brett to make our business successful. And we had BIG dreams right from the beginning. When I stood in front of both brothers at our first ever strategy meeting and asked them what our vision was, Brad immediately replied, "Breakfast with Bill Gates". We decided we should tone it down and be more realistic so we settled on a "Cashless Africa."

For the first three years we were constantly out of cash. I tapped into my Oxford network and recruited my MBA classmate Keith Davies to join the team and manage our finances while I went out to raise more investment. In early 2012, we closed what was the first ever international venture capital round in a Zambian start-up. The Omidyar Network, Accion Frontier Investments Group, and Sarona Asset Management Fund put in nearly $4 million of equity, the proceeds of which have helped to put the company on steroids. 

We rebranded to "Zoona", which means, "It’s Real" in a local Zambian language and is one of our core values. We have built a customer base of 500 agent outlets that service 500,000 unique consumers and process $25 million per month in transaction value. And we are growing rapidly: our headcount has increased from 44 people to 75 in the first half of 2014 alone as we gear up for expansion into new markets.The early days were exciting and we always thought we were on the verge of taking off. I remember how exhilarating it was handing out fliers in front of the government-owned post office in downtown Lusaka, which had a monopoly on the money transfer industry in Zambia, when Brad was placed under “citizen’s arrest” by the manager for attempting to steal their customers. So we set up one of our first agents 20 meters away. Five years on, that outlet now processes over $400,000 per month in transactions and is owned by a 24 year old woman named Misozi who operates an additional eight outlets, employs 14 people and earns over $9,000 per month in commissions. The social mission has become reality.

Our biggest challenge now is to prove we can do this at scale. Our vision is to build a billion dollar pan- African business that proves entrepreneurship can have social roots that make a big difference to people’s lives, while also making money. Zoona’s core purpose is to help small businesses grow. We want to become the best in the world at providing business solutions to micro, small, and medium enterprises in Africa that unlock their latent potential. Our mobile payments platform has evolved from money transfers to other transaction types, including payments from retailers to suppliers. We also provide affordable working capital finance and business management tools to our agents so that they can grow their businesses sustainably. Many of our agents are people under 30 years old who are first time entrepreneurs themselves and are creating jobs, servicing their communities, and helping their economy grow.

As Steve Jobs once famously said, "We’re here to put a dent in the universe. Otherwise, why else even be here?" My job at Zoona is to make sure we do just that.

Best,

Mike Quinn

Group CEO, Zoona

Follow me on twitter @ZoonaMike

Moving Beyond M-Pesa: Innovations In Financial Inclusion

Everyone has now heard about the success of M-Pesa in Kenya.  With over 11.6 million active users, 79,000 agent outlets, and $1.1 billion in real time payments each month, M-Pesa has been a game changer in the quest for ubiquitous financial inclusion.

M-Pesa has been so successful that mobile network operators (MNOs) have rolled out replicated models around the world based on the assumption that they can copy and paste M-Pesa’s success in other markets. In Africa, there are now 42.4 million active mobile money users with Airtel, MTN, Vodacom, and Tigo joining Safaricom with their own branded mobile money accounts and agent networks. Some have started to gain traction in certain markets, but the elephant in the room is that the vast majority of mobile money accounts are still dormant. GSMA estimated in June 2013 that only 43.1% of registered mobile money users in Africa had done a transaction on their account in the past 90 days, which was positively skewed from the global average of 29.9% by the inclusion of M-Pesa. Furthermore, another GSMA case study of an MNO in an African market found that only 13% of registered users were using their accounts frequently, with 4% of registered users generating 43% of the service’s revenues.

This begs an interesting question: are mobile network operators destined to be the “power stations” of mobile money as was the case with M-Pesa and is often assumed? I’m not convinced they will be – at least not everywhere (and maybe not in most places). MNOs are simply too big, too set in their ways, and make too much money off their core voice services to put in the proper time and attention to successfully build the mobile money infrastructure from scratch. Even when they try, they don’t seem to be that good at it – the lack of liquidity and poor customer service from MNO mobile money agents leaves much to be desired.

Who else can do it then? The obvious alternative is the banks. Equity Bank in Kenya is the poster child in this space, having made a commendable push towards financial inclusion by building an agent network to compete with M-Pesa’s and extend appropriate financial services to previously unbanked rural and urban customers. Equity is now looking to add “mobile” to their core “banking” offering by becoming a Mobile Virtual Network Operator (MVNO) in partnership with Airtel.

But besides Equity Bank, I would argue that banking the unbanked is just not in bankers’ DNA. Banks have been around for a long time, yet 2.5 billion people in lower and middle-income countries remain unbanked. And many of those that are banked don’t have any money in their accounts, despite being counted as “financially included”. 

So who else is there? Luckily there are some new kids on the block: new groups of entrepreneurial start-up companies are stepping up to the plate. These companies are small, agile, and aren’t hamstrung by the organizational constraints and traditional business models of MNOs and banks. They are focused on developing solutions for customer segments that are underserved or are not being served at all. And crucially, they are attracting investment and going to scale.

One grouping consists of service models mainly concentrated in East Africa that are plugging into all those mobile money accounts to create demand to use them. M-Kopa and Off-Grid:Electric allow consumers to use their mobile money accounts to purchase electricity to power stand-alone devices in their homes. Kopo Kopo enables merchants to accept mobile money to purchase goods at their shops. Many more of these companies are in the garage right now and will emerge in the coming years.

Another grouping consists of companies like Zoona that are working in markets where mobile money has yet to take root. We help businesses grow by providing mobile payment and financial services to micro, small, and medium enterprises (MSMEs). MSMEs in Africa are typically financially excluded or underserved, despite being key drivers of employment and economic growth. We are neither an MNO nor a bank, yet we issue mobile money and provide working capital finance to 500 MSME customers in Zambia. Each month, our MSME customers generate over $20 million in over-the-counter money transfers from a base of 500,000 unique consumers plus $5 million in mobile supplier payments to FMCG suppliers such as SABMiller. Furthermore, we focus on helping our MSME customers make money off of our services so they keep using them, open new outlets, hire new people, and generate more transactions. We also work closely with the regulator to engage them in what we do as we share common goals of financial inclusion and building a sustainable industry.

In sum, we at Zoona are building our own mobile money infrastructure and plan to invite MNOs, banks, and the new service models above to plug in and provide value-added services to our fast growing customer base. We believe that companies like ours that are independent and agnostic of MNOs and banks have an important role to play in the future of this budding industry.

What does the future of mobile money look like? In some markets, the M-Pesa model driven by MNOs will win with other services plugging in to create demand. But in many others, it will take companies like Zoona to build the infrastructure for the mobile money ecosystem to emerge. M-Pesa will be written into the history books as the catalyst for the industry, but in the future it will be one of many.

Best,

Mike Quinn

Group CEO
, Zoona
Follow me on Twitter at @ZoonaMike

2013: Zoona’s Breakout Year!

One year ago, I wrote a blog about how 2013 was going to be Zoona’s breakout year. We had spent most of 2012 securing our financing, getting the right people in the right seats on the Zoona bus, and focusing on a few key goals to put us on a path to success.

And what a breakout year it was!

To highlight but a few of our achievements in 2013:

• We processed our 1 millionth Zoona money transfer since we launched in April 2009
• Our agents and distributors processed 2.2 million cash in and out transactions valued at over $142 million
• We injected over $500k in working capital to micro & small enterprises
• We paid out over $1.4 million in commissions to our network of 200+ Zoona agents
• We became cash flow positive!!!
• We closed our first straight debt facility
• We launched a partnership with Airtel Money in Zambia and integrated with their payment platform
• We deepened our partnership with Zambian Breweries and are now processing a significant share of their payments
• We released a new website, www.ilovezoona.com 
• We appointed Lelemba Phiri as our Managing Director in Zambia as a strong signal that our Zambian entity can now stand on its own two feet

These are considerable achievements that would not have been possible without tremendous effort from every member of the Zoona family: our customers, employees, board members, investors, partners, and colleagues.

However, despite this progress we have much more work to do to achieve our vision of a world of Cashless Growing Businesses…everywhere! I am reminded of my favorite quote from the late, great Nelson Mandela:
“After climbing a great hill, one only finds that there are many more hills to climb.”

I see three hills on the horizon for Zoona in 2014. First, we have much work to do in Zambia to fully integrate Airtel Money into our agent service offering.  We want to activate 1 million Airtel Money mobile wallet users, and provide a guaranteed “cash in / out” service to these customers. This will involve scaling up our agent network significantly to meet the anticipated demand.

Second, we want to further scale our payment and working capital services to Zambian Breweries’ cross-country network of beverage distributors and the 25,000 small retailers below them. Our vision is to create a completely cashless distribution channel in Zambia as a proof of concept that we can scale to other value chains elsewhere.

Third, we are now looking beyond Zambia and a key priority for 2014 will be to test our model in new markets. Our dream has always been to build a pan-African business, and it is time to make this a reality.

As much as I am looking forward to a break after an exhausting year, I am more excited than ever to get back to work in January. The Zoona story is just getting started, and 2014 is going to be a big test to see if we can elevate our business to the next level.

Thanks to everyone for your continued support and I wish you all the happiest of holidays.

Best,

Mike Quinn

Group CEO
, Zoona
Follow me on Twitter at @ZoonaMike