Innovating With Technology: Mobile Money In Rwanda
What did clients need?
Urwego Opportunity Bank of Rwanda (UOB, serving 284,000 clients) provides loans and other financial services that help Rwanda’s predominantly rural and agriculture-based population to cover their daily household cashflow needs despite variable seasonal income. Farmers use UOB loans to fund inputs like seeds and fertiliser, as well as to cover the costs of transportation and storage after harvest.
When reviewing the needs of clients at the start of 2013, UOB found that demand for loans and other financial services was restricted because repayments and group meetings took clients away from their farms or businesses on a regular basis. There were also significant security issues affecting group loan clients who needed to travel with cash to make repayments at branches.
mHose brought security for all of us. Before anyone could pass by you, count your payment and grab the money and run away. It meant big losses to all of us. In addition, using mHose, I no longer lose time waiting in line to be served by a teller. Nowadays, I pay everything through mHose while serving my clients. For example, when I am paying my bills I can also serve four client or more at the same time - that's money. mHose is a God-sent service."Verdiane Mukarukaka, Market Vendor, UOB client, Rwanda
How did we respond?
UOB responded to this need by launching its mobile phone banking service, mHose, in partnership with Visa. Mobile money allows clients to manage their accounts, pay their loans, send and receive money, pay their bills and deposit and withdraw money from a network of agents. The reduction in the cost of delivery is up to 80%, meaning that more people living in poverty can be reached with a wider range of services.
But after the launch of mHose, UOB research showed that clients were not using the new service to save. So UOB redesigned the mHose savings product to better meet clients’ needs by reducing withdrawal charges and increasing interest rates.
Earlier this year, UOB also launched a new, flexible savings product with popular mobile financial services provider Tigo Cash. This savings account allows Tigo Cash customers to open an account with UOB and transfer money between their Tigo Cash wallet and their UOB wallet. This allows them to be able to earn interest on their balance (as UOB is a bank and Tigo Cash is not).
UOB also offers microinsurance products exclusively through mobile banking, making these financial tools more accessible to clients. As an added incentive, UOB offers its clients the opportunity to earn life insurance for themselves and their family members based on the balance in their mHose accounts.
UOB is building a reputation for not just introducing new products and services to meet demand in the market, but also for collecting and analysing client feedback and acting on that feedback to adapt products and services that give clients what they need to move out of poverty.