By Taonga Sabola:
For more than four years, Amosi Juma, has been selling second hand clothes on the streets on Blantyre.
Day in, day out he walks past seven banks along Malawi’s Wall Street, the Victoria Avenue, to sell clothes which he buys at wholesale price in Limbe.
On average, he sells six pairs of trousers a day which he purchases at an average price of K2,000 each and resell at around K3,500 per pair, realising an average profit of K9,000 a day, translating to K270,000 per month.
Despite making a considerably high amount of money, Juma does not own a bank account.
To him, the seven banks in Victoria Avenue are just like any other building in town. He has no business to do with them.
“Iiiiii bwana zama biggy zimenezo. Tangozisiyani. … Zofunika ma biggy ngati inuyo zimenezo [banking is for people with huge sums of money. It is for people like you not us],” Juma says when asked why he does not own a bank account.
He argues that it does not make sense for him to stand in the queue and spend an hour to deposit and withdraw small amounts of money in banking halls.
“Ife koma Mpamba kapena Airtel Money basi osati zinazi zamabwanazi. Zachanguchangu basi. Kutapa kapena kusiya pompopompo. Ndithuditu biggy [we use Mpamba or Airtel Money. It’s fast and easier. Banking is for big boys],” he says.
Some 30 km South of Ntcheu Boma lives Benson Sambani. He used to own a bank account when he lived in Blantyre a couple of years ago but abandoned it because of distance to banks from his base.
“When I moved to Ntcheu, I had to travel a total of 60 km to and from the bank just to make a deposit or a withdrawal. That’s when I opted for something for me and that’s mobile money.
“With mobile money, I am still able to save and make withdrawals but this time around I do it close to home which is convenient,” Sambani says.
He adds that, in addition, the coming in of mobile money has eased payment of other services such as television subscription.
“Again, we are able to access short term small loans with ease, unlike in commercial banks where it is a hussle. So with all these benefits, who needs their banks anyway?” Sambani asks.
According to the Reserve Bank of Malawi (RBM) the total number of mobile money subscribers stood at 5.6 million as at the end of 2018.
This is compared to 2.5 million bank accounts as at December 2018, according to RBM Governor, Dalitso Kabambe.
A bulk of the account holders uses the bank accounts to receive salaries and wages.
According to RBM National Payment Systems report for 2018, as at December 2018 Malawi had a total of 39,434 mobile money agents reflecting efforts by service providers to increase access points for their services across the country.
“However, the distribution of these agents remains heavily skewed towards urban and semi-urban areas as 77 percent of them are in urban and semi-urban areas whereas only 23 percent are based in rural areas.
“With the majority of the country’s total population based in the rural areas, there is need for concerted efforts by all stakeholders to increase deployment of access points in rural areas so that more people have access to secure and affordable payments channels,” RBM says.
In terms of usage, mobile money services were dominated by cash ins and cash outs and airtime top ups.
“However, it is pleasing to note that business-to-business (B2B) transactions contributed a sizeable 23.1 percent of the total value of mobile money payment transaction during the period under review.
“This suggests that in addition to individuals, businesses are also adopting mobile money for payment of goods and services and they tend to have a higher average value per transaction than individuals,” the report says.
Speaking during a recent interaction with business journalists in Blantyre, TNM Head of Mobile Money, Chikhulupiliro Mphatso, noted that mobile money schemes have a number of benefits which bring about convenience to customers.
Mphatso said with agents spread across the country, subscribers could make deposits and withdrawals at their doorsteps.
“In addition, to buying airtime and paying bills, TNM’s Mpamba scheme provides a platform where customers could invest through its Mpamba-Fesa partnership with Old Mutual,” he said.
Economics Association of Malawi Executive Director, Maleka Thula, said while the mobile money movement has registered significant strides over the past four years, they need not to be seen as providing competition to banks.
“This might not be competition per say but complementarity of the financial players. This rather allows those that might have otherwise not kept money in accounts have a way of keeping money.
“Accounts are considered more rigid and do not offer the flexibility these services offer to users. What banks should do is match such services with their own product offerings like mobile money to capture a market now confirmed receptive to financial inclusion,” Thula said.
Bankers Association of Malawi Chief Executive Officer, Violet Santhe, said the future of banks is not threatened by mobile money schemes.
Santhe said banks provide many services, including big loans which mobile money schemes cannot provide.
She said banking is a very regulated industry unlike the mobile money business.
“Unlike mobile money where you just go walk in, produce your identity card and open a wallet, banks need more information in line with know -your-customer requirements by RBM.
While acknowledging that the mobile money revolution has taken the country by storm, Santhe said commercial banks have in recent times embarked on efforts to link mobile money platforms with formal bank accounts where people can move money from one account to the other.
“Again many banks have mobile banking platforms which provide the much-needed convenience to customers,” Santhe said.
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