Using data to drive financial and economic inclusion


Sandy Rheeder, CIO at Mukuru discusses economic disparities and solutions for closing the gap.

In this exclusive Q&A with CIO South Africa, Sandy dives deep into the challenges South Africa faces in terms of financial inclusion, and some of the solutions Mukuru is employing.

Q: Can you provide details on how partnerships have helped Mukuru's efforts in financial inclusion?

A: We’ve partnered extensively with WhatsApp to provide our financial services platform to WhatsApp users across Africa. WhatsApp already accounts for nearly 50 percent of the transaction volume that goes through our platform.

We also partner extensively with banks and mobile money operators across Africa given how a lot of our money transfer services are sent to people’s wallets and bank accounts.

Q: How does Mukuru incorporate feedback from customers into its decision-making processes?

A: We connect feedback from customers on all our self-service channels and contact centre after every interaction. Using that data, we feed back to our Customer Journey department through a Voice of Customers report.

Q: How scalable is Mukuru’s approach in Botswana across other African countries? Are there plans to expand such initiatives to other regions?

A: Mukuru is a cloud-hosted platform business, so we can leverage the scalability of the cloud to quickly deliver and customise for specific in-country services. For example, valid forms of identity differ from country to country, but we can easily configure our solution to fit into the regulatory environment.

We can scale rapidly through our partnerships with cloud services like AWS. In addition, we can scale into new countries because we have designed our system to cater for country configurations.

In terms of local customer service and understanding the local environment, Mukuru truly feels that this is essential. Therefore, we build local presence in a market territory as we expand.

Q: Financial inclusion efforts often focus on short-term impact. Does Mukuru have a long-term strategy for sustaining and expanding its financial inclusion initiatives beyond immediate needs, such as those arising from crises like the Covid-19 pandemic?

A: We are passionate about financial inclusion. We give our customers the ability to access our services on the simplest of 2G devices and do not force them to have a digital store of value if cash is their core need.

We are the bridge between cash and digital transactions. Mukuru wants people to control their digital environments without forcing them to adopt wallets until it makes sense to do so, and customers can see the true value in that.

The pandemic was a catalyst for a lot of people to get into the formal economy as they had no opportunity to send cash cross-border during the lockdown. Coming into the formal sector for the first time, they are more than likely to stick with a provider who offers them services based on where they are in their financial inclusion journey.

Q: Does Mukuru collaborate with traditional banks or financial institutions to bridge the gap between cash and digital economies?

A: The biggest collaboration for us is to partner directly with banks and mobile wallet providers as destination points for a remittance. These same partners are also key cash payout points for us in many countries.

Q: Can you provide specific metrics or KPIs used to measure the impact of Mukuru's financial inclusion initiatives?

A: In South Africa, we have helped many of our customers transition to a digital store of value through our Mukuru Card product. Our card product has grown its active user base by over 40 percent in the last two years. Many of these users would have had no access to formal financial services before.

The card allows our customers to transition from cash-based payments into the digital financial realm. Mukuru Card point of sale transactions have increased more than 50 percent in the last year alone, which indicates a strong preference for non-cash transactions. Online payments have grown by 104 percent year-on-year, which shows the appetite for ecommerce transactions amongst our user base. The proportion of customers sending and receiving international money transfers from their cards has also increased considerably over the last year.

In relation to our Enterprise Payments, which allows aid organisations or businesses to leverage off the Mukuru network to distribute payments to recipients, when comparing the first four months of the product, September to December 2021, to the same period in 2022, the platform had established 60 percent growth in transactions.

Q: What role does Mukuru play in improving the financial literacy of its customers?

A: We have a financial literacy module on our mobile device menus to educate our customers in this regard. We help teach our Mukuru Card customers about the importance of keeping their PIN secure, how to create it, and not to share it with anyone. This definitely requires a shift in mindset from our customers who are used to cash.

We also adopt an agent-based approach to signing up new customers and explain these things to people when they get a new Mukuru Card. Educating within the community through this agent approach is really important.

Q: How does Mukuru overcome the challenges or limitations faced in collecting data from customers, especially in areas with limited connectivity or infrastructure?

A: USSD is an important channel for us as it is available to most customers. We try to design our menu structure to collect data and get it through as quickly as possible, so we can deliver on our value proposition.

We also put apps into our agents’ hands so they can capture data for customers who might not even have a device and are unable to capture the data themselves.

Q: What strategies or technologies does the company use to facilitate cross-border transactions efficiently and affordably for its customers?

A: Customers create cross-border payments easily using multiple platforms like WhatsApp, USSD, our app, the contact centre, and our agents on the ground. We can then honour that transaction in cash through the thousands of access points we have created by partnering with the retail network to accept cash for these transactions.

We also try to roll out more products so our customers can use Mukuru Card to send directly to the Mukuru Wallet to reduce cash costs. Mukuru remains at a competitive price point both within formal and informal sectors, and we factor the full cost of receiving a remittance into the price.

Q: How does Mukuru ensure the sustainability of data-driven initiatives beyond external funding sources like FCDO grants?

A: We partnered with organisations like FinMark Trust to support the gathering of data to help change the regulatory environment. When we work in particular engagements, we also look at helping to grow financial inclusion so people can go through an onboarding process much easier.

Q: Why are you personally invested in financial and economic inclusion?

A: So many people are only constrained by opportunity. If we can bring opportunity to these people, then the world is their oyster. We must be involved in closing the financial inclusion gap. African consumers are resilient and always make a plan even in the harshest of conditions. If we can help them to do this more easily, that is all that matters.

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