Mobile banking push will open doors for world’s underbanked
The creator of the Imani has big goals for the mobile bank.
Heidi Stephens-Metz said the development of mobile technology makes it possible to provide safe and secure banking services which can help alleviate poverty in the developing world.
That makes it possible to provide services for a one percent flat fee anywhere in the world via a push system.
The market is huge, Ms. Stephens-Metz said.
“Docebo predicts the mobile telecom market in Africa alone is forecast to grow to $234 billion by 2020.”
Ms. Stephens-Metz explained Imani, which means “trust” in Swahili, combines two passions.
The first is her desire to provide lasting solutions to global issues. Her parents founded Mercy Ships, a non-profit delivering medical services to countries in need aboard ships anchored near shore.
“I got to live in many different cultures and I saw first-hand the needs in those places,” Ms. Stephens-Metz explained.
The second is technology. After returning to the United States to obtain her MBA, Ms. Stephens-Metz was fortunate to have several unique experiences with technology in the finance space.
While with Arthur Andersen she worked on ways to help the United States government track alternative energy usage.
“Technology provided the answer and helped the government in a math-based way,” she explained.
The next challenge was to help Lloyds of London transition from a ledger to an online format.
“It was disruptive,” Ms. Stephens-Metz recalled. “There was a huge cost savings and it was a fun challenge.”
There is a common irony shared between people in low income brackets in America and the developing world. While many struggle to obtain life necessities, most have mobile phones. They offer desperately needed control to people who have little of it in their lives.
In America that means reliable social contact for a more transient population. On most of this continent, its adaptation for core uses is only beginning.
In Africa mobile technology provides core services which are enabling some of the world’s poorest people to leapfrog generations of development. For agriculture it means getting timely weather reports so farmers can optimally manage their crops. Health organizations send education and vaccination times via text. Relief organizations announce food distribution electronically.
Mobile’s potential is being recognized by a growing audience, Ms. Stephens-Metz said.
“Last August, the President of Ghana announced their goal is to be a cashless society within three years. The timing is right.”
“It is a stepping stone. My hope is people will grow in financial maturity and move to a traditional bank account.” – Heidi Stephens-Metz
Existing options are financially crippling and contribute to a continental unbanked rate of 83 percent, Ms. Stephens-Metz said. Imani has received two patents with more on the way for its payment system. That technology is what allows Imani to charge the one percent fee.
That compares to rates between 20 and 43percent levied by existing providers. Most people find it hard enough to live, never mind save anything, and when the only existing savings options take more than one third off the top, most do not bother.
There are other drawbacks too. Because many Africans live in remote areas, they have to travel hours, often on foot, to the nearest banks to make payments and deposits. Devalued currencies mean they have to carry bags of cash to make the smallest transactions.
“In Guinea, the largest denomination bill is worth 20 U.S. cents, Ms. Stephens-Metz said. “These people have a target on their backs.”
Because those payments occur on a regular schedule, people making the trip are susceptible to robbery, Ms. Stephens-Metz explained. The process also brings health worries, as some men making the deposits may consort with prostitutes on the trip and bring diseases into the home and community, she added.
The benefits spread well beyond Africa, Ms. Stephens-Metz explained. Syrian refugees are forced to carry cash with them on an arduous journey, leaving them vulnerable to theft. Access to a low cost service which includes currency conversion is more secure and allows for an easier trip and a better acclimatization once they reach their destination. Currency conversions are free, she added.
Those who don’t leave the third world benefit from their loved ones who move abroad and send money back home, Ms. Stephens-Metz said. While a few extra dollars here may mean one less vent double latte at Starbucks, in Africa it could mean school fees or food.
Imani can assist with the fight against corruption, Ms. Stephens-Metz said. She explained the International Monetary Fund places strict requirements on aid recipients and that includes fighting corruption. Because Imani creates an electronic money trail, it allows countries to sow both their funders and citizenry where money gets spent. For example, Imani can be used to pay federal employees after they sign a protocol with the government.
That partnership can extend to local banks, where people can make withdrawals from ATMs. The process can also be simplified to involve mobile companies and street vendors.
Imani is not a means to an end, Ms. Stephens-Metz said.
“It is a stepping stone. My hope is people will grow in financial maturity and move to a traditional bank account.”