Why Africa needs to protect our mobile money agents amidst COVID-19
Mobile money agents serve a vital role in markets across the African continent. They ensure the healthy flow of money throughout their respective economies and fill an essential role as liquidity providers. During times of crisis, such as the COVID-19 pandemic, these agents serve as frontline workers, providing multiple mobile money services to individuals. The scale and impact of mobile money cannot be understated. In 2019 alone, according to GSMA, $456 billion was transacted on mobile money rails in Africa. 64% ($293.4B) of that was transacted in East Africa alone.
The report goes on to share: “The number of agent outlets has almost tripled over the past five years, and the reach of a mobile money agent is now seven times that of ATMs and 20 times that of bank branches.”
So how do the mobile agents work? Let’s start with a quick mobile money 101:
- What is a mobile money account?
Mobile money is a form of electronic money that enables you to conduct digital payments from your mobile phone. - What is a mobile money agent?
A mobile money agent acts as a retail extension of a telco’s mobile money operation. Their main purpose is to support cash-in / cash-out transactions as well as a few other digital transfers. They operate in franchise models and earn commissions paid by the Telcos that are dependent on the value and volume of money transacted. - Where do you get a mobile money account?
Your SIM card (provided by the mobile operator) — essentially becomes your bank account and your phone number becomes your account number. - How do I add money to my account?
(After you have a registered mobile money account) and you want to add money or withdraw money from your account, you head to an agent, hand them cash, and then you will get a text message on your phone saying you have ‘cashed-in’ the value you submitted to the agent. - How do I withdraw money from my account and what is the cost?
It can get quite expensive, we built a cost-calculator for Tanzania and Uganda where you can review costs for transactions here. - How do I transact using mobile money?
The most popular way of transacting is by dialing a long USSD menu. A majority of transactions are peer to peer transactions in Africa. A popular use case is to ‘send money home.’
When money is received by the other party, it is very common that the money will get cashed out at the closest agent near the recipient. This is because most of the African continent lacks a well-integrated merchant network to close the loop on digital transactions.
Backstory — why agents in the first place?
April 18th this year marked two years since we released the NALA app on the Google Play Store. For those unfamiliar, NALA is a mobile money application that brings together your financial accounts and helps you make transactions through your existing mobile money services all from one application. Being able to access all your accounts in one place enables people to make better decisions on budgeting and how they spend money. NALA works without an internet connection and with no additional fees.
For us, this has been quite a journey with over 200,000+ installs across two different markets; Tanzania and Uganda, without a single launch event in either. We have faced a lot of challenges, had wins and losses all around, however, we are so grateful for all the support we have been getting.
As a way of saying thank you, while celebrating two years of NALA, and in light of the current COVID-19 pandemic, we decided to do something different. Agents have an important role in Africa by helping circulate money in our communities, now more than ever.
We understand many industries have been impacted by this pandemic and the financial sector is one of them. In Tanzania, like other markets, cash-in, and cash-out (CICO) networks of bank branches, ATMs, and agents are essential in the financial sector. Mobile money agents are the most diverse in that group, with some of them being fully dedicated to the business of financial services, and others, juggling several business activities at the same time.
According to the Tanzania Communications Regulatory Authority (TCRA) 2020 quarterly statistics report, there are more than 26 million active mobile money subscriptions as of March 2020. Most of the mobile money subscribers have in one way or the other; gone to a mobile money agent to either cash in or cash out.
Given the state of COVID-19 cases growing in Africa, it’s important for each and every one of us to take the necessary measures to protect ourselves and help protect others when possible. With this in mind, we felt the need to help the community by reaching out to mobile money agents in Dar es Salaam.
With the help of NALA family (NALA users) members who donated to our cause, we went out and distributed hand sanitizers, face masks, and gloves to different mobile money agents in some of the more vulnerable neighborhoods in Dar es Salaam. With these, they can protect themselves and others by minimizing the risks of exposure to the virus.
This giveaway has shown us that there is still more to be done, and that coming together as a society in helping those around us is a great way of making it happen.
What we learned ✍️
- We need more education around how to protect yourself: We observed the amount of cash traded within a few minutes and the number of people coming back and forth to the agents was pretty high. Most of the cash was exchanged within hands and sometimes preceded by a handshake or a grasp. Often, both parties unphased by the pandemic.
- Affordability of protection: “I’m looking to survive, so financially, buying a mask or sanitizer; is not at the top of my purchase list.” This is a word for word what one of the agents told us. There is a great need to help mobile money agents since most can’t afford to buy face masks, sanitizers, or gloves to protect themselves.
- Massive room for collaboration: We were surprised when the agents consistently mentioned that not one person the mobile operators had reached out to them to check in on them offering to help protect them. With that note, there’s massive room for collaboration. As a community, we can take a step in helping in any way we can to collectively protect agents.
While our work on this has helped a number of mobile money agents, there are still thousands of agents who still need help in this crisis. See figure 3 from GSMA below. Being the backbone of the economy for many countries in Africa. We need to protect them. Though our work will protect some agents, we need your help in protecting the rest of them.
In 2019, the density of the agent network reached an average of 228 active mobile money agents per 100,000 adults, tripling since 2014. Meanwhile, the density of commercial bank branches in the same markets did not change substantially between 2014 and 2018, averaging 11 per 100,000 adults. GSMA, 2019 — State of the Industry report.
Thank you 🙏
Finally, we would like to give our sincere gratitude and thanks to all who had a part to play in this giveaway. From those who helped financially, who gave their time and efforts without forgetting the mobile money agents that we had a chance to meet, we are thankful. With your help, we were able to do a little that we could to be able to protect our communities against COVID-19. Protect yourself and help protect those around you. Stay safe!
It’s up to us as a community to play a part in helping in any way we can.
If you are inspired to support this cause, please email mamanala@nala.money and we would love to speak with you.
As always, stay informed about all things NALA by following our social media channels; Twitter, Instagram, Facebook, LinkedIn, and YouTube. If you haven’t already, download or update your NALA app here.
