Mobile banking takes rural Zambia by storm

PEOPLE transacting at a mobile money booth in Petauke. PICTURES: JACK ZIMBA

THERE is a feature that is fast becoming ubiquitous on Zambia’s streets, street corners, market places and other open spaces – mobile banking booths.
One small stretch of busy road in Petauke district in Eastern Province, is littered with several green, yellow and red booths that, apart from serving their well-intended purpose, now stand as an eyesore on the landscape.
But the residents themselves don’t see the booths as an eyesore, but a source of convenience.
Every so often, someone makes a beeline for one of the booths and, with a few entries on the mobile phone, withdraw some money or send money somewhere.
The concept is changing the lives of many rural dwellers, who previously had no access to banks.
Ever since the concept of money transactions using the mobile phone was introduced in Zambia, it has been spreading like wild fire, reaching far-flung places that regular banks – limited by the four walls – have found hard to reach.
Zambia still has a huge unbanked population – about 60 percent – according to the Ministry of Finance.
The ministry, through the National Financial Inclusion Strategy adopted in 2017, aims to improve access to financial services by 2022.
One of the objectives of the strategy is to develop “Innovative and diverse financial products and services that meet customers’ needs leading to the percentage of adults with at least a transaction account growing from 36 to 70 percent by 2022.”
No doubt the mobile phone is now bridging this gap.
According to the Zambia Information and Communications Technology Authority (ZICTA) Zambia, with an estimated 16 million population, had 13,438,539 mobile phone subscribers in 2017.
Although the Authority does not indicate how many of these phone users are in the rural areas, many rural dwellers now have access to mobile phone network, thanks to improvement in the network spread.
MTN Zambia, which has the largest footprint, covers about 44.1 percent across the country.
The improvement of the network coverage has bolstered the rise of the mobile money business in rural Zambia to reach mostly the unbanked population.
Mobile banking has proved attractive to rural dwellers where regular banks are far few and too far between.
What makes mobile money transactions even more attractive to rural dwellers is that it has minimal or even zero transaction costs and no queues or forms to fill.
The concept has also cut transportation costs for many rural dwellers who previously had to travel long distances to access banking services.
Patrick Banda is a trade development representative for MTN in Katete and oversees mobile money business in the whole district, including the neighbouring Sinda district.
Mr Banda oversees the operation of 54 booths in Katete and Sinda.
“They are all very active, but we want to put up more booths because the demand is still very high,” he says.
Most of the booths are concentrated in the busy trading areas and along busy streets, but Mr Banda’s plan is to have at least one booth in every chiefdom and in the peripheries.
“We want to reduce the queues at the kiosks,” he said.
He adds: “These services are helping people a lot in terms of bill payment, you know electricity has now reached the rural areas, so people need these services to pay their bills.”
Mr Banda’s target is to put up at least 100 booths in the district to meet the demand.
“We want to make sure that this service reaches everyone,” he says.
He says many people are opting to use mobile money transfers to pay bills, or send money because they are convenient to use and are more accessible than regular banks.
For example, Katete has only two regular banks, with four automated teller machines (ATMs) while there are over 50 booths where people can deposit and withdraw money.
One cotton company in the province now uses the mobile banking to pay its workers, rather than depositing the workers’ salaries into regular bank accounts.
“Those workers no longer go to the bank on pay day, they just walk to a mobile money booth. The workers are very happy,” he says.
Mr Banda says a better network is a huge advantage in the business.
The agents operate with a base capital of K5,000 daily.
Business in this region, which is agro-based, peaks from May when farmers begin to harvest and sell their crops. It is also the best time for the agents to make more money.
MTN has also partnered with another company called Ready Pay to loan out solar systems to the villagers, who pay back the loan within two years using mobile money.
Many villagers have benefitted from the loan scheme and have lit up their houses with solar lamps.
Apart from making money transfer much easier, the concept has also become a source of income for many young people like Deborah Njovu, who dreams of earning enough money to go to college.
Deborah wants to become a police officer.
Her booth is at a busy bus station and every day, she handles about 100 transactions. Deborah’s target is to earn a commission of at least K150 every day.
She usually hits her target.
Last month, she made about K3,200 in commissions. She is happy with the money she makes.
Deborah is not the only one happy with her earnings.
David Banda opened his booth in May.
He paid K1,000 to Airtel to be registered as an agent, and pays the local authority K590 for the licence to operate the booth.
“Business is good, even when business is slow, one is still able to get something,” he says.
Mr Banda plans to raise enough money to go to college to fulfill his dream of becoming a teacher.
He handles between 40 and 50 transactions every day despite the many booths within a small radius.
Joty Chama is in charge of 40 MTN booths between Petauke and Luangwa, a distance of 200km.
“We always tell our agents to open early in order to keep up with the competition,” he says.
The concept of mobile banking is also helping small time businesses.
Richard Zulu has been running a business selling shoes and handbags in Petauke for 15 years, but he has never had an account with a regular bank.
Instead, Mr Zulu used to keep his money at home until mobile banking reached the district.
He says mobile money banking has helped him to run his business more efficiently.
“It is easier for me to keep my money with MTN mobile money because it is easy to make withdrawers. I don’t have to fill in any forms,” he says.
According to ZICTA, every year, over seven billion SMS are exchanged, no doubt mobile money transactions now account for good share of that.
Today, about 19 million SMSs will be exchanged among subscribers, some of them will involve money. Money will leave one mobile phone to another mobile phone.

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