Last week I was at the Gates Foundation’s Global Savings Forum. I participated on a panel which included Bill Gates. It covered “New Partnerships for Technology-Enabled Financial Inclusion”. The interest from Bill and Melinda Gates was personal – they had witnessed how people living on $2 a day or less around the world need an easy, safe and affordable place to save and build financial security for their future. Bill and Melinda knew that to make global financial inclusion a reality, they would need many organizations working together from both public and private sectors – therefore the Global Savings Forum was established.
Not a surprise that 3 of the 7 panelists with Bill:, Michael Joseph (Safaricom CEO); Dr. James Mwangi (CEO Equity Bank) ;and myself, are directly involved with mobile payments in Kenya. Kenya is the Silicon Valley of Mobile Money – where 14 Million of the 39 Million Kenyans have mobile money and use it in their daily lives.
Bill set the tone by making it clear that “technology should be able to help the poor participate in the greater economy”. Michael Joseph emphasized the importance of the mobile carrier – who has distribution that is key to reach, and customer trust that is key to adoption. Dr. Mwangi believes mobile is changing banking in a big way and the partnerships between banks and mobile carriers bring scale and cost efficiency. Interestingly Equity Bank has partnerships with at least three mobile carriers in Kenya – including Safaricom(mPesa) and YU (YUCash by Obopay).
Equity and Safaricom talked about their partnership around a co-branded savings product in Kenya. “Strategically working with Safaricom was a no brainer. This is one of the best decisions Equity Bank made!”, Dr. Mwangi told the group. Michael Josephs agreed. Yet it was clear that the two of them had to be heavily involved in forging the terms of the agreement over many many coffee meetings.
I advocated for an open collaborative model, and emphasized that scale will come from a rich ecosystem of partners. A question from the audience was – “who should get it started then?” My answer was that there is no right answer except whoever starts it needs to be bold and be a market maker. Then build an ecosystem around what they are doing. Safaricom did that in Kenya.
In general, we find that our partners have been successful because they recognize the importance of being an early movers and taking the market making role. More and more they understand early that it is an ecosystem they are building and move quickly to recruit local partners who share their desire to scale.
We see this happening everywhere we work in the world. We are partnering with mobile handset manufacturers, non-bank financial providers, and retailersIt is a whole new ecosystem unfolding around mobile money. This ecosystem creates greater reach, a fuller range of offerings, and encourages innovation in the mobile money space.
Certainly, there is a tremendous need for these solutions. Globally 5 billion people have phones, but only 1.5 billion have good access to financial services. Those people still depend on cash, a costly alternative where studies have shown that as much as 20% of the cash is lost or stolen. This impacts families, small businesses, surrounding communities, and hampers economic developmentIt was clear from this meeting that Bill, and especially Melinda, have a real commitment to create technology-enabled savings forthose who need it most. And that commitment will certainly accelerate financial inclusion around the world. Bringing together key players from all over the world is certainly a great beginning. It was clear that the Gates will keep a focus on the very bottom of the pyramid – on those with the greatest need. As you know from these posts, it’s a passion of mine and one of the clear goals for Obopay. I was honored to be part of their first Global Savings Forum.