[the monitor] Picture those days when you had to spend Shs10,000 on bus fare to deliver just Shs20,000 to a relative. Or imagine the long queues in the banking halls when you want to pay utility bills or your child's school fees.
The advent of mobile money, a platform which allows people to use their mobile phones like wallets to transfer money, pay for goods and services and conduct banking services, has started to have a transformative effect at a faster pace than previously envisaged.
The massive uptake of the mobile commerce platform as opposed to traditional banks can be explained by the rapid growth of mobile phone penetration, creating a fertile ground for service.
With a population of about 32 million people, Uganda has over 10 million mobile phone subscribers and only about three million bank account holders. The platform took advantage of the extensive reach of mobile phones to improve financial access and bring a good number of people into the formal banking system. The service rides on Zain's Zap, Uganda telecom's M-sente and MTN's Mobile money.
Mr Brandon Semanda, the Zain Uganda marketing manager says the telecom has about 140, 000 active clients using Zap and over 1.4 million customers with enabled sim cards. Whereas Uganda Telecom's M-sente has a subscription of about 29, 510 as of August 8, 2010.
The convenient, flexible, low cost and instantaneous nature of the platform has led to its swift popularity among Uganda's banked, underserved and unbanked population. Mobile money acts as a mobile wallet allowing users to utilise their mobile phone in much the same way as a bank account debit card.
Using the mobile phone as a bank account, it does not only reduce the need to carry cash, but also enables users to purchase airtime, pay utility bills including water, electricity and DSTV services, pay school fees, pay for merchandise, send money from the comfort of one's office or home.
Zap moves an estimate of over Shs2 billion monthly and the average amount sent per transaction is between Shs50, 000-Shs500, 000.
Mr Mark Kaheru, Uganda telecom's relations manager says as of August 8, M-sente moved an average of Shs75 million per week, an average of Shs43 million was withdrawn per week and airtime worth Shs2.5 million purchased.
The platform has been taken up by many people, especially the unbanked as a substitute of a savings account, which enables them to deal with unexpected expenses such as medical treatment.
The maximum transfer amount per day is, however, Shs1 million and the maximum balance one can hold on the account is Shs1 million. Thus, sending money using mobile money is much cheaper and faster compared to the slow and costly transfers via banks, traditional money sending agents.
Players say the novel product that provides the most comprehensive and accessible package of mobile commerce is slowly changing Uganda's socio - economic landscape.
Mr Kaheru says the platform has made business transaction easier and that there is more money flowing in from upcountry districts to Kampala to purchase goods and agriculture equipments thereby increasing trade. "People no longer need to board buses to come to Kampala to trade, they simply send money using phones to someone they trust here who buys and sends the goods back to the person," Mr Kaheru adds.
The low rate of sending and receiving money saves money that would have been used in bus fare and the huge transaction charges and time that would have been spent on the way or in the long queues there by allowing people to concentrate on their businesses for increased profits.
Zap subscribers pay between Shs250 and Shs5,000 to send and receive finances of between Shs1-Shs1 million. None-registered users pay between Shs200 and Shs2, 000 for sending and Shs1, 000 and Shs5, 000 for withdrawals. MTN's registered users pay Shs800 to send any amount of money irrespective to any part of the country and between Shs700 and Shs9, 000 to receive cash depending on the amount.
Non-registered users and those using other networks pay upon receiving a withdrawing charge, which varies between Shs1,000 and Shs19, 000. "The impact of mobile money services may be minimal now but in a few years, a huge impact will be seen," Mr Semanda said. Through the service, Zain has created jobs to over 4,500 Zap agents across the country.
Users are also able to keep track and manage their finances through handsets for instance checking account balances, changing passwords, nick-names and getting bank information and reports.With Zap, one is also able to purchase airtime at no cost.
Mobile Money Revolution Changing Financial Sector
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