More about the Mzanzi Accounts

David Porteous (Bankable Frontiers) gave a very good presentation on the Mzansoi account scheme at the recent MMU summit. Although I am quite familiar with the scheme, it once again enforced a number of lessons regarding the roll-out of transformational banking. I do not have all the statistics at my fingertips, but let me summarise the scheme and then I will make some conclusions.

The Mzansi account scheme is a special type of account developed by all the major South African banks and launched at the same time by all during about 2003/2004 timeframe. The vision with this scheme was to provide a low cost bank account on a non-competitive basis that would ensure access to more people to the banking system. The program was very successful with large numbers of bank accounts being opened and the co-brand becoming well-known. However, the usage profile was quite low with one-time cash-withdrawals the primary transaction. It is also my understanding that although average revenue per account per month is about $1.50, most (all?) banks run this scheme at a loss.

What is the conclusions for mobile banking?

• First it is possible to launch transformational bank accounts (with full KYC compliance) and ensure massive take-up: especially if a need exists and proper marketing support is given.
• It is possible to generate revenue from these accounts at a level that can drive a business case, providing costs can be reduced to acceptable levels.
  
• It is important to provide additional utility (like bill payments, money transfer, airtime purchase etc.) to ensure improved loyalty and to generate additional revenue. These services can only be provided by means of mobile phones.

The Mzansi "experiment" in South Africa serves as a great case study for transformational banking and is more evidence of the need that exists at the bottom of the pyramid.