Rural folk can bank on tech products

2010-04-17 10:17

Technology is helping to change the way people relate to their

­money, moving it from under the mattress into the virtual world.

This development has encouraged the local financial services

­industry and transformation advocates to sit up and take note.

“This is the best tool in financial services since the introduction

of the mobile phone,” says Modise Motloba, who is the facilitator of the

Financial Services Charter.

Motloba is ­responsible for ensuring that all ­signatories to the

charter find ­common ground.

“But it must be noted that regulation is limiting the kinds of

products that the technology can deliver to the people,” he says.

Mobile technology can ­deliver ­only transactional services such as

deposits and withdrawals.

“Financial services providers cannot offer mobile loan products

until systems and regulation are standardised across countries. My guess is that

regional trading blocs such as the SADC (South African Development Community)

will lead the ­effort to harmonise regulation. The political will is likely to

be the ­biggest challenge,” says Motloba.

The financial sector has not ­capitalised fully on the extensive

utilisation of mobile telephones in the country, says Cas Coovadia, the managing

director of the Banking Association of South Africa. He commends partnerships

between banks and mobile phone operators for extending ­financial services to a

broader spectrum of people.

Standard Bank and Nedbank recently launched ­mobile money services.

A payment gateway service, also known as cellphone money, aims to ­improve

access to financial services for the unbanked and to make ­banking cheaper and

safer.

Nedbank has partnered with ­Vodacom to launch M-Pesa in South

Africa.

M-Pesa is a mobile banking service that enables even unbanked

customers to transfer money from person to person using a cellphone.

It has been successful in countries where there is limited access

to banking ­services, such as Kenya, Tanzania and Afghanistan, where it has a

combined customer base of 10 million users.

Standard Bank has introduced new cellphone payment technology

called Instant Money, in partnership with retailing group Spar.

The service will enable consumers to pay by phone for groceries and

to send money to any person in South Africa who owns a cellphone.

“At present financial services are not always available in rural

areas, mainly because of the expense of rolling out banks and services in less

affluent places.

“This has meant that most people in rural areas operate on a cash

­basis,” says Standard Bank SA chief executive Sim Tshabalala.

Coovadia says innovative technology contributes towards the

critical goal of the Financial Services Charter, which is to provide people in

rural areas with easy ­access to ­financial services.

“The benefits of mobile phone ­access to financial services should

not be limited to the charter,” says Coovadia. “Ongoing innovation will lead to

a broader range of services delivered via this channel.”

Motloba says the security of the mobile money service is high,

making a psychological shift and educational push the main requirements to woo

more people to the service.



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