<incom> WIZZIT

[Geert Lovink]

http://www.worldchanging.com/archives/004591.html

Robert S. Katz is a Research Analyst with the Washington, D.C.-based 
World Resources Institute and editor of NextBillion.net -- Development 
Through Enterprise. His current research documents unmet human needs in 
low-income communities and identifies the corresponding market power of 
the poor.

Driving to a show at Wolftrap this past Friday, a story on NPR’s 
Marketplace prompted me to turn up the volume – the national business 
media was covering WIZZIT, a South African cell phone banking firm. The 
concept of mobile phones is Mail and Guardian calls a “cult status” in 
poor townships. Marketplace’s Gretchen Wilson describes how it works:

“[A customer] can make deposits at a bank or at any post office. They 
scan his debit card, take the cash, and then immediately credit his 
account. He gets a text message to prove it. Then he uses commands on 
his cell phone to check his balance, transfer money - even pay his 
electricity bill. He uses his debit card to buy things or to withdraw 
cash.”

According to WIZZIT chairman Brian Richardson, there are 16 million 
unbanked people in South Africa – a challenge to development, sure, but 
also a potentially huge untapped market. WIZZIT isn’t the only firm to 
recognize the latent potential of the BOP financial services market: 
banking majors Standard and FSB, as well as cell phone giant MTN, 
actively vie for BOP customers.

What seems to set WIZZIT apart from its competition is a combination of 
low fees (there are no minimum balances and per-transfer charges are 
cheap) and excellent customer service.

The business model makes sense – Marketplace reports that 35 percent of 
the 16 million unbanked (5.6 million people) own their own cell phone. 
Critics might argue that poor people are ill-suited to use debit cards, 
and having credit might bury some in debt. Economists tell a different 
story: better access to phones spurs economic growth, while access to 
financial services unlocks “dead capital.”

There are, of course, issues. WIZZIT has about 40,000 customers today, 
and aims for 100,000 by year’s end. But they’re only adding about 3,000 
new customers per month – which makes 100,000 an optimistic goal. 
Furthermore, CGAP documents a myriad of barriers preventing BOP 
customers from getting cash into the electronic system.

Despite these challenges, hearing WIZZIT on the radio was music to my 
ears – it proves that entrepreneurs can succeed by targeting the BOP 
market. Marketplace has the full text as well as the audio online – 
check it out.