Two weeks ago, Telecom Malagasy (Telma) in partnership with the bank BFV-SG (part of the Société Générale banking group) launched “MVola”, the first mobile money service in Madagascar. With MVola, Telma joins the ever-growing group of African mobile operators that seek new revenue streams by offering m-money services to a population that remains largely unbanked.
The Mvola service will enable the Malagasy people to safely transfer money using their Telma mobile phone. The service is open to all Telma’s users. All they need to do to start using MVola is to open an account. It is a quick process, whereby the Telma customer needs to present his or her I.D. and sign the MVola subscription contract with one of the 250 registered dealers anywhere in Madagascar. An MVola account can be opened with a minimum deposit on as low as 100 Ariary (US¢5) – the maximum is up to 5 million Ariary (about US$2,500).
As soon as an initial deposit is made, MVola customers can send money (Vola) from their Telma mobile phone to any recipient, irrespective of whether or not the beneficiary being a Telma Mobile customer. This flexibility is appealing as it extents the reach of the service to subscribers of competitor mobile operators Orange and Zain. MVola customers can also top up their airtime account or pay Telma fixed or mobile phone bills, through their mobile phone anywhere in Madagascar. According to Patrick Pisal Hamida, “this new mobile money service enables Telma to strengthen its position of most innovative operator in a strong growth potential country”.
While the initial deposit and the top-ups of a MVola account are free of charge, the money transfer attracts a fee that varies according to the amount transferred and whether the receiver holds an MVola account or not. For example, a 5,000 Ariary transfer (about US$2.50) to an MVola receiver will cost 250 Ariary (about US¢13). The same transfer to a non-MVola receiver will attract a fee of 750 Ariary (about US¢37). On the other hand, cashing out this amount from a registered dealer will cost a further 350 ariary (about US¢17) to an MVola customer but will be free for a none MVola customer. The bigger the transfer, the more attractive the fee becomes.
A dedicated network of 250 MVola agents has been set up, and includes Telma branches, Moov Agencies, and Telma Kioska franchisees as partners from the start of the service, as well as 49 Tiavo cashier’s desks (the first micro-finance institution for the South East of Madagascar) and 66 Jovenna service stations. The mobile transfer platform has been supplied by Utiba, a Singapore-based company specialised in mobile transaction systems, which has already provided Telma with its calling credits top-up application.
According to Telma’s CEO, the general feedback, two weeks after its launch, is very positive and encouraging. Taking the success of Safaricom’s M-Pesa mobile service in Kenya as a gauge, Patrick Pisal Hamida excepts that Telma’s MVola service will have 3 million users in 3 years time. On an island where 97% of the population remains unbanked, this target doesn’t sound too unrealistic. Furthermore, the new mobile transfer service has been welcomed by the Ministry of Finance and Budget, the Ministry of ICT, the Governor of Madagascar’s Central Bank and the IMF representative who see it as a step forward to strengthen the development of the country’s banking sector.
The mobile operator is also keen to introduce in the near future additional services like the payment of salaries or utility bills, international remittance and e-commerce transactions. However, according to Telma’s CEO, there are currently gaps in the local legislation with regard to SMS payments that will need to be addressed first. When it comes for example to prove that a payment has been made or received, a bank statement is an enforceable document but a SMS message not yet.
With so many M-money services launched by mobile operators (MTN, Orange, Zain, etc) in the last twelve to eighteen months, is it the case that they are becoming the next-generation African bankers?