Mobile payments are poised to redefine the fibre of society

Sanlam is a major South African financial services company. Listed on the JSE, the company has interests in insurance, asset management and health and operate in many emerging markets. Sanlam was one of first investors in Fundamo and I have got to know them well. I found many parallels with the founding of Sanlam in the 1920's and the start of the mobile payment industry.

Sanlam was started as a co-operatibe insurance company, with products designed for the poor and a distribution model utilising local representatives. These representatives sold the Sanlam products in rural areas, but also provided client services and support. This created the opportunity for many people in rural areas to start businesses as representatives (agents) that contributed to the development of the region. The Sanlam products encouraged saving, with many secondary benefits and lastly, the assets raised through these long-term savings products were invested in local industry. In this way much infrastructure was built and large and famous South African companies were founded with investments collected through the premiums of relatively poor people.

I find many similarities with the current roll-outs of mobile money for the unbanked in emerging markets:

• The distribution of the product through agents in rutral areas 
• Getting subscribers to effectively save by changing their financial behaviour
• Converting cash into electronic assets that can be invested in industry.

Considering the impact that Sanlam had on the South African economy, the potential of mobile money to redefine the fibre of society seems very plausable.