Mfs Africa at the Forefront of Financial Innovation

Last week Orange Madagascar and MFS Africa announced the launch of their joint remittance service Orange Money Transfert International (OMTI), which enables online customers from just about any country to send money to a mobile phone in Madagascar. Senders register on the portal and effect transfers using traditional bank cards such as Visa or MasterCard. Funds are credited to Orange Money accounts and receivers can withdraw cash, all or in part, at any Orange Money agent in Madagascar.
The service is accessed online through www.orange.mg/transfertinternational. The launch of OMTI is an example of the pioneering role that MFS Africa is playing in using mobile technology to reshape the retail financial industry in Africa and potentially beyond.
Traditionally, remittances to Madagascar, primarily from Europe, are charged at price levels that make small-value transfers difficult to justify for many of the Madagascar diaspora. In our pre-design market analysis together with Orange Madagascar, we found prices ranging from 10-15% of the remittance value, with inconvenient delivery means, delays, and sparse cash-out locations. The new service is offered without transfer fee until the end of 2012 and thereafter announced at 5 EUR per transfer. This is a significant paradigm shift on remittance pricing while the new service offers greater convenience to both senders and receivers.
MFS Africa was founded in 2009 with the idea to provide simple and relevant financial services for all mobile users. We focus on few financial services for which we know demand is proven, re-engineer the services to optimize for cost-effective distribution and administration through mobile phones. We then partner with Mobile Network Operators and/or Financial Institutions to make the services available to their mobile (money) clients. Beside international money transfer, our portfolio currently includes insurance products (notably the world-first miLife in Ghana in partnership with MTN, Microensure, UT Life and Hollard Insurance) and credit products (KwikAdvance, a mobile-based short term loan product available in Cameroon and Ghana).
We have been asked many times by partners, industry practitioners and our clients a like: Why are you doing this? Why do you care? Our answer has invariably been – because we MFS Africa care about under-privileged people in Africa and beyond.
When we say we care, we don’t mean feeling sorry for the under-privileged or writing cheques to charity. No. We care in the sense that we believe it is up to us to do something about it; some lasting change to improve people’s lives for good, not just for today, next week or a couple of months ahead.  It is that common sense of ‘Doing Something About It’ that brought the team together from more than 10 different countries including (and expanding): Benin, Brazil, Cameroon, Cote d’Ivoire, DRC, France, Ghana, India, Nigeria, Malawi, South Africa, The Netherlands and Sweden.
Our ‘Do Something About It’ at MFS Africa is to make financial services easier to access, simpler to use and more affordable for ordinary folks. Financial services have a multiplier effect – a good insurance product shields people from life’s storms; improved money transfer services makes it easier for diaspora members to support their relatives at home; using a mobile phone to pay for things online unlocks trade potential within and across borders, not to mention that it stimulates the growth of local web companies to employ people; easier to access and simpler-functioning credit services are oil in the complex machinery of the millions salaried and ‘survival entrepreneurs’ across Africa.
To achieve this we combine our cutting-edge technology with smarter process engineering – basically re-arranging a set of actions to optimize the outcome for a particular situation – and in so doing we solve two of the most important problems that financial services providers face in Africa: expand reach and lower cost.
Our typical design process involve picking a service (say a hospital protection plan), unpack it to understand the key building blocks, identifies what we can take out, add, re-mold, reduce or augment to lower its delivery cost and expand its reach. We then repackage the service and optimize for distribution through mobile phones. In pretty much all cases, mobile technology is at heart of our answer. We actually start with the mobile in mind – let the trend be your friend as we like to say – The result: an ‘old’ financial services (such as remittances) “innovated” into a new and improved version.

We love mobile phones. Unashamedly.

The same way the internet has put the power in the hands of ordinary people and given them access to all kinds of services in the developed world, mobile phones put power in the hands of emerging market consumers and give them access to all sorts of things. After Safaricom launched their M-Pesa in 2007, the mobile money revolution has swept over Africa. Now more than 60 mobile money platforms have been deployed in Africa giving millions of mobile phones users access to a basic bank account and associated services on their phone. Where the internet has driven down costs for many businesses in the developing world, mobile money deployments can do and is doing the same for financial services in Africa. For us at MFS Africa we draw the parallel between these two revolutions and borrow lot of lessons from the internet age. A key one being that open standards tend to always prevail.

Besides considerably lowering the cost of remittances, a service like OMTI (and a similar one MTNMMO.COM that we operate in partnership with the MTN Group) represents our attempt to connect the old and establish world of card/bank payments to the new and emerging world of mobile money. What effectively OMTI does is allowing a payment from a bank card to a mobile money account. This alone opens up a world of possibilities. And we intend to explore them all, one by one. So stay tuned for more…