1 Payments in Mozambique April 2016
2 Agenda Mozambique a FinScope overview Payments Access
According to FinScope 2014 there are 14.43 million adults aged 16 or more in the country; 5 are under the age of 35, typically regarded as the youth segment 3 GENDER (Adults 16+) AGE (Adults 16+) RURAL / URBAN (Adults 16+) 61 + 1,015,015 7% Unspecified 365,124 16-17 1,124,215 8% Female 7,504,596 5 Male 6,927,319 48% 35-60 5,278,251 37% 18-20 1,639,596 1 21-34 5,009,715 35% Rural 9,677,133 67% Urban 4,754,782 3
Overall, the education level in Mozambique is low with about 6 of adults having a primary school education or less; 16% did not know their level of education. Young people are generally better educated but the majority have not completed secondary education 4 HIGHEST LEVEL OF EDUCATION (Adults 16+) HIGHEST LEVEL OF EDUCATION* (Age distribution of adults 16+) Doesn't know Did not go to school Literacy 787 1,253 2,345 Percentage 16% 5% 9% 100% 90% 80% 70% 60% 118 143 15 3 26 58 124 256 337 706 82 432 725 11 1,030 21 105 195 370 762 278 22 39 57 16 Primary (Grades 1-5) Primary (Grades 6-7) Secondary (Grades 8-10) Secondary (Grades 11-12) Technician (Elementary / Basic / Medium) Superior 4,554 3 2,580 18% 1,771 1 841 6% 263 35 0. 0 2,000 4,000 6,000 Thousands 50% 272 438 1,010 40% 366 1,953 30% 1,371 20% 324 425 187 10% 392 487 75 62 16 72 281 355 0% 50 16-17 18-20 21-34 35-60 61 + Age groups Did not go to school Literacy Primary (Grades 1-5) Primary (Grades 6-7) Secondary (Grades 8-10) Secondary (Grades 11-12) Technician Superior Doesn't know * Those who did not specify their age are not shown on the chart
5 Women are slightly more likely than men to have a literacy certificate and less likely to have qualifications post secondary school HIGHEST LEVEL OF EDUCATION (Males 16+, 6,927,319) HIGHEST LEVEL OF EDUCATION (Females 16+, 7,504,596) % of males % of females Doesn't know 893 1 Doesn't know 1,452 19% Did not go to school 435 6% Did not go to school 352 5% Literacy 474 7% Literacy 779 10% Primary (Grades 1-5) 2,283 3 Primary (Grades 1-5) 2,272 30% Primary (Grades 6-7) 1,295 19% Primary (Grades 6-7) 1,286 17% Secondary (Grades 8-10) 934 1 Secondary (Grades 8-10) 837 1 Secondary (Grades 11-12) 402 6% Secondary (Grades 11-12) 440 6% Technician (Elementary / Basic / Medium) 190 Technician (Elementary / Basic / Medium) 73 Superior 21 0. Superior 14 0. 0 1,000 2,000 3,000 0 1,000 2,000 3,000 Thousands Thousands
Thousands 6 The gender gap in education is more noticeable in older segments HIGHEST LEVEL OF EDUCATION* (Age distribution of males 16+) HIGHEST LEVEL OF EDUCATION* (Age distribution of females 16+) 100% 80% 60% 40% 20% 0% 47 39 21 7 3 19 60 117 170 157 173 216 351 154 428 280 375 119 62 7 75 12 196 100 15 13 245 30 597 469 998 261 195 105 120 22 18 11 31 131 220 34 16-17 18-20 21-34 35-60 61 + Age groups 50 71 104 6 9 65 39 151 208 83 272 292 56 40 5 41 150 135 16 16-17 18-20 21-34 35-60 61 + Did not go to school Literacy Primary (Grades 1-5) Primary (Grades 6-7) Secondary (Grades 8-10) Secondary (Grades 11-12) Technician Superior Doesn't know 100% 80% 60% 40% 20% 0% 139 102 180 284 426 20 236 374 582 774 5 Age groups 654 30 95 124 294 955 10 159 10 37 6 105 * Those who did not specify their age are not shown on the chart
Two thirds of adults earn less than 5 000 MT a month (roughly $100 USD). Seventeen per cent of respondents could not or would not provide income data. There is no question on household income in the survey 7 PERSONAL MONTHLY INCOME (Adults 16+, 14,431,915) 500 001 MT or more 300 001-500 000 MT 200 001-300 000 MT 100 001-200 000 MT 50 001-100 000 MT 25 001-50 000 MT 1 4 4 4 33 200 5 001-25 000 MT 2,205 Less than 5 000 MT 9,362 No income 220 Don't know 1,770 Refused 627 0 2,000 4,000 6,000 8,000 10,000 Thousands
8 Adults in rural areas have, on average, lower incomes than those living in urban areas PERSONAL MONTHLY INCOME (Adults 16+) URBAN RURAL 100 001 MT or more 0. 100 001 MT or more 0.0% 50 001-100 000 MT 0. 50 001-100 000 MT 0. 25 001-50 000 MT 25 001-50 000 MT 5 001-25 000 MT 20% 5 001-25 000 MT 1 Less than 5 000 MT 6 Less than 5 000 MT ~$100 66% No income No income Don't know 10% Don't know 1 Refused Refused 5%
9 Women have, on average, lower incomes than men PERSONAL MONTHLY INCOME (Adults 16+) MALE FEMALE 100 001 MT or more 0. 100 001 MT or more 0. 50 001-100 000 MT 0. 50 001-100 000 MT 0. 25 001-50 000 MT 25 001-50 000 MT 5 001-25 000 MT 18% 5 001-25 000 MT 1 Less than 5 000 MT 6 Less than 5 000 MT 68% No income No income Don't know 1 Don't know 1 Refused Refused
Thousands The most common income source is from the sale of agricultural products yet it is a regular source of income for only 18% of earners. Wages or salaries are the most regular type of income source 10 REGULARITY OF INCOME BY INCOME SOURCE (Adults 16+) 7,000 6,000 5,958 9 86% 100% 80% 5,000 69% 4,000 5 5 5 60% 3,000 2,000 1,000 18% 2,699 2,317 3 1,472 1,171 26% 25% 40% 20% 346 343 244 208 129 0 Selling agricultural crops Own business Biscato (piece Wage or salary Depends on a work) household member who gives you money for your expenses Selling livestock Fishing Pension and/or other government grants Sale of products collected from nature unprocessed Cash or goods sent by a relative from another country or zone 0% Number of people % of number who receive income regularly (at least once a month) Note: Regular Income is defined as income received daily, weekly, or monthly (applies only to those actually receiving that type of income). The following income sources are not shown on the chart: Other (255,000), Rentals (88,000), Aid agency or NGO (17,000), Provides financial services to its community, for-profit (6,000)
Wages or salaries and income from own businesses are more common main sources of income for urban adults, while income from the sale of agricultural crops is most prevalent in rural areas 11 MAIN SOURCE OF INCOME (Adults 16+) URBAN RURAL Depend on a household member to pay for expenses 2 2 Own business 17% 1 Wages or salary 17% Biscato (piece work) 1 10% Depend on a household member to give money to use 1 Selling agricultural crops 10% 39% Pension and/or other government grants Fishing (includes processing) Other No income
A higher proportion of women than men depend on a household member to pay for their expenses directly or to give them money to pay for their own expenses 12 MAIN SOURCE OF INCOME (Adults 16+) MALE FEMALE Selling agricultural crops 3 28% Depend on a household member to pay for expenses 17% 28% Own business 16% 15% Biscato (piece work) Wages or salary 1 1 6% 9% Depend on a household member to give money to use 9% Fishing (includes processing) Pension and/or other government grants Selling natural products collected Other No income
Urban Rural 13 Aside from income source and regularity, location also has a critical impact on access Providing financial services (5,502; 50%; 100%) 100% Rental income (60,838; 77%; 75%) 59% 4 Selling agricultural crops (4,227,300; 18%; 1 ) Biscato (piece work) (1,487,742; 38%; 38%) 7% 68% 3 Salary / Wage (1,196,291; 9; 67%) 9 Fishing (240,531; 5; 27%) 96% 19% Own business (2,208,356; 67%; 37%) Selling livestock (49,920; 28%; 1) 8 96% 97% 99% Selling natural products collected (133,410; 35%; 10%) No bank account Bank account Percentage who receive income (main source) at least monthly *Size of charts scaled to size of segments. **Adults who do receive this source of main income were included in the base First percentage is receive income at least monthly and second percentage is proportion that are urban
5.2 million adults living in rural areas say they receive an income from farming (that is, income from selling agricultural crops or income from selling livestock); 7 of them say farming is their main source of income 14 SOURCE OF INCOME FROM FARMING (Adults 16+, Rural areas) ANY INCOME FROM FARMING 5,179,550 adults (7 say this is their main income source) MAIN INCOME FROM FARMING 3,789,559 adults* * 17 respondents ( of adult s whose main source of income is from farming) don t mention farming as an income source
For those individuals living in rural areas that receive an income from farming, but it is not their main source of income, 40% say they receive income from own businesses and 18% from piece work 15 ANY OTHER SOURCES OF INCOME FOR FARMERS (Rural areas, Earn income from farming* but it is not their main source of income, 1,467,120 adults 16+) Own business 40% Biscato (piece work) 18% Depends on a member of the household to pay its expenses 16% Wage or salary Fishing Depends on a household member who gives you money for your expenses Other Pension reform 6% Income from own business (that is, selfemployment) in the questionnaire is phrased Income from own business (such as trading including the buying and re-selling of crops, processed products such as Rhale, livestock or fish, providing service, making/manufacturing, e.g. beer brewing, charcoal, handicraft) Income from rentals Receive money, food or other property of an agency or NGO Help 0. * Selling agricultural crops or livestock Note: Income from agricultural crops / livestock is not shown on the chart
Percentage of segment For those adults who earn salaries/wages, government is the dominant employer in rural areas while private companies are the dominant employer in urban areas 16 100% Urban (Adults 16+, 958,729) SOURCE OF INCOME (Salary or Wage) Rural (Adults 16+, 512,842) 5% 5% 6% 9% 80% 60% 40% 50% 40% 20% 50% 37% 0% Salaries/wages: Urban Salaries/wages: Rural Business, NGO or other employer Government Family/ Friends Other
17 There are 219,000 women earning a salary or wage from a business, NGO or other employer, with 6 of them living in urban areas PERSONAL MONTHLY INCOME (Receive salary or wage from business, NGO or other employer, 663,957 adults) URBAN (475,248 adults) RURAL (188,710 adults) Refused 5 24 Refused 10 25 001 MT or more 8 21 25 001 MT or more 5 001-25 000 MT 49 109 5 001-25 000 MT 7 19 Less than 5 000 MT 72 177 Less than 5 000 MT 64 86 Don't know 9 Don't know 3 0 50 100 150 200 0 50 100 150 200 Thousands Female Male Thousands
18 After transport, clothing and medical expenses are the most frequently reported expenditure categories EXPENDITURE ITEMS* (Adults 16+, 14,431,915) Chapa/bus fares Clothing (including capulana) Doctors/medicines from a pharmacy, clinic or hospital Phone (contract or prepaid) Cleaning products for the home Barraca Beauty salon / parlor Donations to organizations / religious groups Fuel (gasoline / diesel) Bar Taxi (not chapa) Wages of workers Food at restaurant Disco / nightclub Pension Hotel 1 1 8% 6% 0% 2 3 38% 4 49% 5 Health insurance as a key need? Is this chronic or acute care? There are many diseases: HIV-AIDS, malaria and now is the time for cholera A MFI client in Machava Illness is perceived to have the greatest financial impact: Regardless of occupation, illness was considered to have greatest financial impact by most of the groups (75%). FGD summary Question: In order to help us understand what type of life you lead, we have selected some different ways in which people spend money. During the past month did you spend money on any of the following? Questionnaire listed specific expenses, with education, rent, etc. not being included
19 Poor harvest as well as theft, fire or destruction of household or property are the most frequently cited risks to finances PERCEIVED RISKS (Adults 16+) Poor harvest 49% Theft, fire or destruction of household/property 49% Death of main wage-earner 47% Illness or accident so that main wage-earner can no longer work 40% Flood destroying house or property 3 Serious illness or accident of a member of the household 3 Loss of job of main wage-earner 2 Pay or contribute to a funeral 1 Theft, fire or destruction of car/vehicle 8%
While theft, fire or destruction of household or property as well as the death of the main wage-earner are frequently cited risks for both urban and rural adults, for adults living in rural areas poor harvest is top of mind 20 PERCEIVED RISKS (Adults 16+) URBAN RURAL Theft, fire or destruction of household/property 50% 48% Death of main wage-earner 46% 47% Illness or accident so that main wage-earner can no longer work 4 40% Serious illness or accident of a member of the household 3 3 Flood destroying house or property 3 35% Loss of job of main wage-earner 3 20% Poor harvest 29% 59% Theft, fire or destruction of car/vehicle 10% 8% Pay or contribute to a funeral 9% 1
Anticipated use of precautionary savings is relatively limited, with credit and liquidation of assets far more common in the event of an expenditure shock. Insurance is barely mentioned, even for the small proportion who cite damage to vehicles as a risk 21 COPING MECHANISMS (What adults would do if they were faced with the following circumstances*) POOR HARVEST THEFT, FIRE OR DESTRUCTION OF HOUSEHOLD/PROPERTY Sell something 36% Sell something 35% Borrow money 2 Borrow money 2 Don't know 18% Other 17% Other 16% Don't know 16% Use savings 10% Use savings 1 Cut down on household expenses 9% Cut down on household expenses 10% Claim insurance 0% Claim insurance FLOOD DESTROYING HOUSE/PROPERTY THEFT, FIRE OR DESTRUCTION OF CAR/VEHICLE Sell something 38% Sell something 28% Other 2 Don't know 2 Borrow money 18% Borrow money 20% Don't know 16% Use savings 18% Use savings 10% Other 1 Cut down on household expenses 6% Cut down on household expenses 10% Claim insurance Claim insurance 5% * Adults that reported the event as a risk
Anticipated use of precautionary savings is relatively limited, with credit and liquidation of assets far more common in the event of an expenditure shock. Insurance is barely mentioned, even for the small proportion who cite damage to vehicles as a risk 22 COPING MECHANISMS (What adults would do if they were faced with the following circumstances*) DEATH OF MAIN WAGE-EARNER ILLNESS OF ACCIDENT OF MAIN WAGE-EARNER Don't know 29% Sell something 28% Sell something 2 Borrow money 2 Borrow money 2 Don't know 20% Other 1 Other 1 Cut down on household expenses 9% Cut down on household expenses 1 Use savings 8% Use savings 1 Claim insurance Claim insurance LOSS OF JOB OF MAIN WAGE-EARNER PAY OR CONTRIBUTE TO A FUNERAL Don't know 28% Sell something 27% Sell something 25% Don't know 2 Borrow money 17% Borrow money 19% Other 16% Use savings 18% Use savings 10% Other 1 Cut down on household expenses 9% Cut down on household expenses 7% Claim insurance 0% Claim insurance * Adults that reported the event as a risk
23 Awareness of financial terms is very low overall, with the exception of a bank, where more than half the adult population understand the term AWARENESS / KNOWLEDGE OF FINANCIAL TERMS (Adults 16+) Heard of this and know what this means Heard of this but does not know what it means Never heard of this ATM 26% 15% 59% Bank 55% 30% 15% Bank branch 30% 19% 50% Bank charges / Service fees 7% 10% 8 Bank loan 27% 2 5 Collateral 19% 1 66% Debit card 17% 1 68% Exchange rate 1 1 75% Guarantor 9% 1 79% Instalments 8% 1 80% Insurance 1 16% 69% Interest rate 25% 17% 57% Internet banking 7% 1 80% Micro credit 9% 15% 75% Mobile bank 9% 16% 75% POS (point of sale) 9% 1 79% Savings account 20% 20% 60% Electronic money 5% 10% 8 mkesh / Mpesa / cellphone banking 1 18% 69% Note: No response is not included in the chart
24 Awareness of financial terms is higher for urban adults than for those living in rural areas AWARENESS / KNOWLEDGE OF FINANCIAL TERMS (Adults 16+) Heard of this and know what this means URBAN Heard of this but does not know what it means Never heard of this Heard of this and know what this means RURAL Heard of this but does not know what it means Never heard of this ATM 5 18% 30% 1 1 7 Bank 79% 16% 5% 4 37% 20% Bank branch 57% 19% 2 17% 19% 6 Bank charges / Service fees 15% 17% 67% 6% 90% Bank loan 49% 25% 25% 16% 19% 6 Collateral 37% 19% 4 1 1 78% Debit card 35% 19% 45% 9% 1 80% Exchange rate 2 2 5 5% 7% 87% Guarantor 17% 20% 6 5% 7% 88% Instalments 18% 20% 6 8% 89% Insurance 3 26% 4 6% 1 8 Interest rate 4 2 3 17% 1 69% Internet banking 18% 2 59% 7% 90% Micro credit 2 2 55% 1 85% Mobile bank 20% 25% 5 1 85% POS (point of sale) 20% 18% 6 8% 88% Savings account 40% 27% 3 1 16% 7 Electronic money 1 19% 68% 6% 9 mkesh / Mpesa / cellphone banking 3 30% 38% 1 8 Note: No response is not included in the chart
The most common source of financial information and advice is from family and friends. However, a large proportion of adults say they would not ask for help 25 SOURCES OF FINANCIAL INFORMATION, EDUCATION OR ADVICE (Adults 16+) PREFERRED SOURCE ACTUAL SOURCE Family and friends Bank Community leader Community radio Church Television School / University Broker / financial advisor 7% 6% 5% 1 2 29% 3 8% 6% 17% 17% 2 Social services department of the government Coworkers Spouse Newspaper Internet Xitique group 0% Other Employer 0% 0% An NGO 0% 0% Don't know 15% Would not ask anyone for help / Don't get it 16% 4
26 The majority of adults do not know what type of financial training they would want access to FINANCIAL TRAINING DESIRED (Adults 16+) Don't know Knowing my rights and my responsibilities when I ask for a loan How to obtain credit / loan Choosing the best investment products The loan amount that I can pay Where to get help or information on how to manage my loans How to educate my children on financial matters How can I ask how many loans or pay Choosing a financial institution How to calculate the interest charged Which fees beyond interest rates may be applied / charged to any loan or agreement How to convert foreign currency into national currency Ensuring my life How to get a copy of my personal credit record / loans I would not want to learn anything Other 20% 16% 15% 1 1 10% 9% 8% 8% 5% 39% Note: The question is phrased as If you had the opportunity to have training, what would you like to learn to get or improve your relationship with suppliers / providers of financial services? (Spontaneous multiple response)
27 Thirty per cent of adults would like information on how to invest and 30% would also like information on how to save INFORMATION REQUIRED FOR MANAGING MONEY (Adults 16+) Don't know How to invest How to save 3 30% 30% How to obtain a loan 20% How to budget 1 How to use financial products How to choose financial products Advantages / disadvantages, terms and conditions of financial products Do not need help or information to manage my finances Which financial products are available to me 10% 8% 8% 7% 6% Other 0% Note: The question is phrased as What type of information regarding aspects of managing money do you require? (Spontaneous multiple response)
28 Aside from bicycles and solar panels, household ownership of assets is higher in urban areas HOUSEHOLD ASSETS* (Adults 16+) URBAN RURAL Mobile / Smartphone 75% 39% TV 5 9% Radio 50% 47% DVD player 4 1 Fridge / freezer 36% Hifi System 3 1 Bicycle 28% 45% Motorcycle / Motorbike 15% 15% Computer Car (motor) or van 1 1 Solar panel 15% Landline phone Mill Tractor 0. 0. 0. * List provided
29 While cell phone penetration is higher than other media forms, internet usage appears limited HAVE ACCESS TO TECHNOLOGY (Adults 16+) REGULAR USE OF TECHNOLOGY* (Adults16+) Normal mobile phone (own / work) National television 37% 49% Normal mobile phone (own / work) 4 Someone else's cell phone Access to Satellite TV 10% 29% National television 2 Smartphone (own / work) 9% Smartphone (own / work) 6% Computer at home Someone else's computer Satellite TV 6% Computer at the internet cafe Internet / email at the internet cafe Someone else's cell phone 5% Public phone / public cell phone Someone else's telephone Computer at home Internet / e-mail at home Use someone else's internet / e-mail Internet / e-mail at home * Regularly is defined as at least once a week
30 According to FinScope, cell phone penetration appears to be low. Can this be verified with data from the regulator? ADULTS WITH ACCESS TO A CELL PHONE* (% of adults, by province) Tete: 3 Niassa: 5 Cabo Delgado: 77% Nampula: 4 < 20 Zambezia: 5 20-39 Manica: 6 Sofala: 56% 40-59 60-79 Gaza: 86% Maputo Provincia: 85% Inhambane: 80% Maputo Cidade: 9 80-89 90 + * Access to a cell phone includes: Normal mobile phone own or from work / Smartphone own or from work / Someone else s cell phone
31 Product usage can be summarised in the form of an access strand The access strand defines the proportion of people that say they have a bank account and places them in the bank segment It then places all those that say they do not have a bank account but have a formal other services (e.g. from a microfinance institution) into another segment It then places all those that do not have a bank account, do not have a formal other product, but have an informal product into another segment Those left over are considered not to use any formal or informal services
32 Financial access strand: continued = Banked = Formally Included = Financially Served = Financially Excluded
The percentage of the population that is financially served has almost doubled between 2009 and 2014. Usage of both formal and informal mechanisms has grown 33 Financially Served 2 FINANCIAL ACCESS STRAND (Adults 16+) Formally Included* 1 Financially Excluded 2009 1 10% 78% Financially Served 40% Formally Included 2 Financially Excluded 2014 20% 16% 60% 0% 20% 40% 60% 80% 100% % Adults 16+ Banked Other formal financial services Informal financial services Excluded Source: FinScope Mozambique Synthesis Report 2015 * In 2009 there were no respondents in other formal financial services category
34 There are 614 commercial bank branches in Mozambique and 42 micro banks across the country COMMERCIAL BANKS: BRANCHES MICRO BANKS: BRANCHES Niassa 18 Cabo Delgado 29 Niassa 3 Cabo Delgado 4 Tete 40 Nampula 67 Tete 2 Nampula 5 Zambezia 28 Zambezia 1 Manica 28 Manica 2 Sofala 53 Sofala 3 1-24 1-4 Gaza 33 Inhambane 34 25-49 50-74 Gaza 3 Inhambane 4 5-9 10 + Maputo Provincia 72 Maputo Cidade 212 75-99 100 + Maputo Provincia 5 Maputo Cidade 10 Source: Banco de Moçambique: COMUNICADO Nº 02/2016 Síntese da Situação Financeira na Quinzena de 16 a 31 de Janeiro de 2016
35 There are 340 micro credit institutions and just 9 credit cooperatives across the country MICRO CREDIT INSTITUTIONS CREDIT COOPERATIVES Niassa 4 Cabo Delgado 6 Niassa 0 Cabo Delgado 1 Tete 5 Nampula 9 Tete 1 Nampula 2 Zambezia 10 Zambezia 0 Manica 1 Manica 0 Sofala 9 Sofala 0 1-4 0 Gaza 15 Inhambane 12 5-9 10-14 Gaza 1 Inhambane 0 1 2 Maputo Cidade & Maputo Provincia 269 15-19 20 + Maputo Provincia 0 Maputo Cidade 4 4 Source: Banco de Moçambique: COMUNICADO Nº 02/2016 Síntese da Situação Financeira na Quinzena de 16 a 31 de Janeiro de 2016 Note: Micro credit providers are licensed but might not necessarily be operating
36 The survey provides information on time taken to various financial infrastructure. Unfortunately a large number of individuals (mostly those who do not have a bank account) did not provide an answer but rather said they don t travel there or don t know where it is TIME OF TRAVEL TO NEAREST BANK BRANCH OR MOBILE BANK (Adults 16+) HAVE A BANK ACCOUNT (2,031,823 adults 16+) DON T HAVE A BANK ACCOUNT (12,400,092 adults 16+) Never travels there / Does not know where it is 6% Never travels there / Does not know where it is 27% 50% More than 3 hours 2 More than 3 hours 1 2 hours to 3 hours 1 2 hours to 3 hours 6% 1h 30 minutes to 2 hours 10% 1h 30 minutes to 2 hours 7% 1 hour to 1h 30 minutes 16% 1 hour to 1h 30 minutes 7% 10% 31 minutes to an 1 hour 15% 9% 31 minutes to an 1 hour 7% 1 21 to 30 minutes 1 18% 21 to 30 minutes 5% 1 11 to 20 minutes 35% 11 to 20 minutes 18% Less than 10 minutes 2 Less than 10 minutes 1 Rural Urban
37 As with time taken to travel to a bank branch or mobile bank, access to other financial institution offices is fairly limited for individuals living in rural areas TIME OF TRAVEL TO NEAREST OFFICE OF ANY OTHER FINANCIAL INSTITUTION (Adults 16+) HAVE A BANK ACCOUNT (2,031,823 adults 16+) DON T HAVE A BANK ACCOUNT (12,400,092 adults 16+) Never travels there / Does not know where it is 1 Never travels there / Does not know where it is 3 5 More than 3 hours 2 More than 3 hours 10% 2 hours to 3 hours 1 2 hours to 3 hours 6% 1h 30 minutes to 2 hours 7% 1h 30 minutes to 2 hours 7% 1 hour to 1h 30 minutes 17% 1 hour to 1h 30 minutes 7% 7% 31 minutes to an 1 hour 15% 9% 31 minutes to an 1 hour 7% 1 21 to 30 minutes 10% 18% 21 to 30 minutes 5% 1 11 to 20 minutes 36% 11 to 20 minutes 17% Less than 10 minutes 2 Less than 10 minutes 8% Rural Urban
38 The same pattern is evident with regards to time taken to reach an ATM TIME OF TRAVEL TO NEAREST ATM (Adults 16+) HAVE A BANK ACCOUNT (2,031,823 adults 16+) DON T HAVE A BANK ACCOUNT (12,400,092 adults 16+) Never travels there / Does not know where it is 7% Never travels there / Does not know where it is 3 56% More than 3 hours 2 More than 3 hours 10% 2 hours to 3 hours 1 2 hours to 3 hours 6% 1h 30 minutes to 2 hours 10% 1h 30 minutes to 2 hours 7% 1 hour to 1h 30 minutes 17% 1 hour to 1h 30 minutes 31 minutes to an 1 hour 15% 8% 31 minutes to an 1 hour 10% 1 21 to 30 minutes 10% 20% 21 to 30 minutes 1 11 to 20 minutes 35% 11 to 20 minutes 18% Less than 10 minutes 2 Less than 10 minutes 10% Rural Urban
39 The time taken to reach nearby markets is significantly shorter for individuals living in both urban and rural areas TIME OF TRAVEL TO NEAREST MARKET (Adults 16+) HAVE A BANK ACCOUNT (2,031,823 adults 16+) DON T HAVE A BANK ACCOUNT (12,400,092 adults 16+) Never travels there / Does not know where it is Never travels there / Does not know where it is 9% 8% More than 3 hours More than 3 hours 0% 2 hours to 3 hours 7% 2 hours to 3 hours 5% 1h 30 minutes to 2 hours 5% 0% 1h 30 minutes to 2 hours 6% 1 hour to 1h 30 minutes 10% 1 hour to 1h 30 minutes 6% 31 minutes to an 1 hour 6% 15% 31 minutes to an 1 hour 10% 7% 21 to 30 minutes 7% 1 21 to 30 minutes 9% 1 11 to 20 minutes 2 35% 11 to 20 minutes 26% 3 Less than 10 minutes 29% 40% Less than 10 minutes 27% 3 Rural Urban
Because the market is diverse we have chosen to focus on a few segments to guide the analysis. Five illustrative market segments were identified based on their ease of each for formal product providers. Note that these segments are mutually exclusive and hierarchical but not collectively exhaustive 40 All adults 16+ 14.43 million Salaried urban YES 698 620 (5%) NO Salaried rural YES 353 823 () NO Self-employed urban viable YES 608 899 () NO Other adults 7.24 million Young and educated urban YES 372 774 () Young and educated NO rural* YES 82 471 () NO Rural farmers YES 5 072 041 (35%) * Sample size for the young and educated rural segment is 25 observations and therefore no further analysis can be done on this segment
41 Segment overview ILLUSTRATIVE MARKET SEGMENTS (Adults 16+) SALARIED URBAN SALARIED RURAL SELF-EMPLOYED URBAN VIABLE 698 620 (5%) 353 823 () 608 899 () Main source of income is salary or wage from a company or government Live in urban areas % of the segment females: 3 Main source of income is salary or wage from a company or government Live in rural areas % of the segment females: 50% Main source of income is from own business Receive income at least monthly Live in urban areas % of the segment females: 5 YOUNG AND EDUCATED URBAN YOUNG AND EDUCATED RURAL RURAL FARMERS 372 774 () 82 471 () 5 072 041 (35%) Age 18 35 Have at least a secondary school education, and/or qualified as a Technician or Superior Live in urban areas % of the segment females: 55% Age 18 35 Have at least a secondary school education, and/or qualified as a Technician or Superior Live in rural areas % of the segment females: 38% Earn any income from farming (selling agricultural crops / livestock) Live in rural areas % of the segment females: 50%
42 A more detailed demographic overview of the rural farmers segment is provided below PROVINCIAL DISTRIBUTION RURAL FARMERS SEGMENT (5,072,041 adults 16+) PERSONAL INCOME HOUSEHOLD ASSETS Refused 5% Mill: Tractor: Car: Tete 7% Niassa 1 Zambezia 26% Cabo Delgado 1 Nampula 2 25 001 MT or more 5 001-25 000 MT Less than 5 000 MT Don't know 15% 1 67% TV: 6% Cellphone: 36% Radio: 49% Manica 7% Sofala 1 WORKING STATUS HOUSEHOLD INVOLVEMENT IN AGRICULTURE: PURPOSE OF FARMING Maputo Provincia Gaza Maputo Cidade 0% Inhambane - 5% - 9% 10% - 1 15% + Occasional 25% Seasonal 48% Full-time 2 Part-time 6% Own consumption only Own consumption mainly Both selling and consumption Mainly for selling Only for selling 10% 0% 8
43 Agenda Mozambique a FinScope overview Payments Access
Twelve per cent of adults have sent money in the past year while 16% have received money in the past year. A higher proportion of women have received money from someone than men over the same period 44 ADULTS WHO HAVE SENT OR RECEIVED MONEY IN THE PAST 12 MONTHS (Adults 16+) Sent money in past 12 months Received money in past 12 months 30% 30% 2 20% 18% 20% 10% 1 9% 1 9% 10% 1 9% 1 1 0% Total Urban Rural Male Female 0% 5% Total Urban Rural Male Female Someone living elsewhere in Mozambique Someone who lives in another country
The salaried urban segment comprises the highest proportion of adults who have sent money to someone while the young and educated urban segment has the highest proportion of recipients of the segments 45 ADULTS WHO HAVE SENT OR RECEIVED MONEY IN THE PAST 12 MONTHS (By segment) Sent money in past 12 months Received money in past 12 months Salaried urban 48% 3 Salaried rural 37% 1 Self-employed urban viable 2 20% Young and educated urban 27% 45% Rural farmers small scale 8% 8%
46 One in eight adults have sent money to someone in the past 12 months, with the majority using a bank to facilitate the transfer SENT MONEY TO SOMEONE IN PAST 12 MONTHS (Adults 16+) MONEY TRANSFER CHANNELS (Sent money) Bank 6 Through a relative or friend 3 Taxi, bus, other vehicle for a fee 9% No, 88% Yes, 1 Other Mpesa / m-kesh Post Office 0. Moneygram or Western Union 0. % of segment
The salaried urban and self-employed urban viable segments mostly send money via the bank, while for rural farmers the most common method of transfer is via family or friends 47 SALARIED URBAN MONEY TRANSFER CHANNELS (Sent money) SELF-EMPLOYED URBAN VIABLE RURAL FARMERS % of segment that have sent money (48%) (2) (8%) Bank 9 88% 27% Through a relative or friend 6% 9% 7 Other Taxi, bus, other vehicle for a fee 8% Mpesa / m-kesh 0% 0% Moneygram or Western Union 0% 0% Post Office 0% 0% Note: Sample sizes for the remaining segments are too small for further analysis
While sending money via family or friends dominates the method of sending money for rural farmers, more of them feel that the bank is reliable or comfortable 48 SALARIED URBAN CHANNEL FEEL IS RELIABLE/COMFORTABLE (Sent money) SELF-EMPLOYED URBAN VIABLE RURAL FARMERS % of segment that have sent money (48%) (2) (8%) Bank 100% 96% 9 Through a relative or friend 69% Mpesa / m-kesh 0% 0% Moneygram or Western Union 0% 0% Taxi, bus, other vehicle for a fee 0% 7% Post Office 0% 0% Note: Sample sizes for the remaining segments are too small for further analysis
49 A sizeable proportion of those who send money do so regularly although the majority seem to send money infrequently FREQUENCY OF SENDING MONEY TO ANOTHER PERSON (Sent money) Total market 5% 2 1 15% 46% Salaried urban 6% 30% 17% 45% Self-employed urban viable 15% 20% 56% Rural farmers 5% 16% 1 3 3 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Weekly Monthly Seasonally Only once a year Irregularly
50 Sending money for general household expenses tops the main reasons for sending money, followed by money for education purposes MAIN REASONS FOR SENDING MONEY (Sent money) URBAN RURAL General household expenses 45% 40% Education 36% 3 Food 27% 29% Health related 17% 1 Emergency 5% Special event (e.g. wedding, funeral, graduation, etc.) Other Purchase durable household goods (including transport) Investment
51 More than 40% of adults that receive money transfers do so into a bank account RECEIVED MONEY FROM SOMEONE IN PAST 12 MONTHS (Adults 16+) MONEY TRANSFER CHANNELS (Received money) Bank Relative or friend 38% 4 Taxi, bus, other vehicle for a fee 18% No, 8 Yes, 16% Other Kawena Moneygram or Western Union Mpesa / m-kesh Post office 0% TEBA office 0% % of segment
While a bank account is the most common method of receiving money for the segments in urban areas, rural farmers receive money predominantly via a relative or friend 52 MONEY TRANSFER CHANNELS (Received money) SALARIED URBAN SELF-EMPLOYED URBAN VIABLE YOUNG AND EDUCATED URBAN RURAL FARMERS % of segment received money (3) (20%) (45%) (8%) Bank 8 6 7 2 Relative or friend 9% 2 15% 67% Taxi, bus, other vehicle for a fee 16% 1 10% Moneygram or Western Union 0% 0% 0% Other Post office 0% 0% 0% TEBA office 0% 0% 0% Kawena 0% 0% 0% Note: Sample size for the salaried rural recipient population is too small for further analysis Note: None of the segments say they received money via Mpesa / m-kesh
53 The majority of those who receive money do so infrequently FREQUENCY OF RECEIVING MONEY FROM ANOTHER PERSON (Received money) Total market 16% 1 17% 5 Salaried urban 6% 2 7% 59% Self-employed urban viable 16% 7% 1 6 Young and educated urban 28% 8% 8% 5 Rural farmers 9% 1 30% 47% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Weekly Monthly Seasonally Only once a year Irregularly
54 While general household expenses tops the list for receiving money, a higher proportion of recipients in urban areas say they receive the money for education purposes while a higher proportion of recipients in rural areas say they receive the money for food MAIN REASONS FOR RECEIVING MONEY (Received money) URBAN RURAL General household expenses 58% 55% Food 26% 37% Education 26% 1 Health Related 1 1 Emergency 1 7% Purchase durable household goods (including transport) 7% 5% Other 5% Investment Special event (e.g. wedding, funeral, graduation, etc.) 7%
55 Adults who send money have a higher personal income then those who receive money Total market PERSONAL MONTHLY INCOME (Adults 16+) Sent money Received money Size of segment 14 431 915 1 775 213 2 253 568 Refused 100 001 MT or more 0% 0% 0% 50 001-100 000 MT 0% 0% 25 001-50 000 MT 5 001-25 000 MT 15% 40% 2 Less than 5 000 MT 65% 50% 66% No income Don't know 1 6%
They are also more likely to have access to cell phones and to have a bank account (49% of those who send money have a bank account compared to 3 of those who receive money) 56 ACCESS AND USAGE OF CELL PHONE TECHNOLOGY (Adults 16+) Total market Sent money Received money Size of segment 14 431 915 1 775 213 2 253 568 Have access to cell phone / smartphone (own or company) 5 8 7 Regular use of cell phone / smartphone (own or company) 45% 80% 68% Have access to someone else's cell phone 29% 4 4 Regular use of someone else's cell phone 5% 10% 8% Note: Regular use is defined as at least once a week
Keeping money safe is regarded as the primary purpose of having a bank account. Its other functional purposes are important but to a noticeably lower extent even for those who have bank accounts 57 ADVANTAGES OF USING A BANK ACCOUNT (Adults 16+) HAVE A BANK ACCOUNT DON T HAVE A BANK ACCOUNT Money is safe from theft 7 50% Easy way of receiving money from others 5 18% Salaries can be deposited by employers 46% 1 Safe way of receiving money from others Easy way of sending money to others Safe way of sending money to others Helps you to get access to loans 3 26% 20% 19% 9% 1 8% 1 You earn interest on savings 10% 9% Other None - no advantages 10% Don't know 29%
Banks are generally seen as the least risky way of sending and receiving money while informal methods such as taxis or buses and through family or friends are considered the riskiest 58 PERCEPTIONS OF SENDING AND RECEIVING MONEY (Adults 16+) THE MOST RISKY THE LEAST RISKY Total adults 5% 3 3 25% 46% 7% 2 2 5% Salaried urban 37% 45% 7% 8 7% 5% Salaried rural 10% 3 48% 79% 19% Self-employed urban viable 7% 40% 3 18% 6 6% 18% 1 Young and educated urban 6% 10% 45% 27% 1 75% 1 8% Rural farmers 6% 30% 27% 3 3 5% 30% 30% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Through a bank At the Post Office Via Moneygram or Western Union Via taxi, bus, other vehicle for a fee Through a relative or friend Other
Most segments consider banks to be the least expensive method of sending and receiving money. However, most rural farmers consider family or friends the least expensive method 59 PERCEPTIONS OF SENDING AND RECEIVING MONEY (Adults 16+) THE MOST EXPENSIVE THE LEAST EXPENSIVE Total adults 7% 7% 9% 4 9% 27% 3 5% 35% 2 Salaried urban 15% 17% 39% 9% 16% 7 15% 9% Salaried rural 5% 16% 7% 5 18% 6 1 2 Self-employed urban viable 7% 10% 4 1 2 59% 20% 1 Young and educated urban 1 1 15% 37% 5% 17% 55% 2 1 Rural farmers 8% 6% 4 8% 3 2 39% 3 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Through a bank At the Post Office Via Moneygram or Western Union Via taxi, bus, other vehicle for a fee Through a relative or friend Other
60 Bank accounts are considered the fastest way of sending and receiving money while using family or friends is seen as the slowest PERCEPTIONS OF SENDING AND RECEIVING MONEY (Adults 16+) THE SLOWEST THE FASTEST Total adults 15% 17% 36% 27% 5 1 10% 2 Salaried urban 35% 15% 4 6% 87% Salaried rural 5% 16% 2 45% 9% 77% 1 7% 5% Self-employed urban viable 20% 25% 39% 1 77% 8% 9% Young and educated urban 29% 18% 3 17% 7 7% 1 Rural farmers 10% 1 36% 36% 40% 20% 10% 29% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Through a bank At the Post Office Via Moneygram or Western Union Via taxi, bus, other vehicle for a fee Through a relative or friend Other
61 Sending and receiving money via a bank account is generally seen as the easiest method, with the exception of rural farmers PERCEPTIONS OF SENDING AND RECEIVING MONEY (Adults 16+) THE HARDEST THE EASIEST Total adults 8% 6% 7% 3 1 35% 4 28% 2 Salaried urban 15% 9% 30% 19% 26% 80% 9% 5% Salaried rural 6% 9% 46% 2 1 67% 16% 6% Self-employed urban viable 5% 1 38% 18% 2 66% 16% 1 Young and educated urban 15% 1 3 1 2 67% 1 1 Rural farmers 10% 3 9% 4 28% 3 3 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Through a bank At the Post Office Via Moneygram or Western Union Via taxi, bus, other vehicle for a fee Through a relative or friend Other
Aside from using a traditional bank account to send and receive money, people can also make use of mobile money. Penetration is low at of adults 62 MOBILE MONEY SERVICE PROVIDER (Use a mobile money account own or someone else s account, 473 507 adults 16+) Both mkesh and Mpesa 60 761 adults 1 of mobile money users 0. of the market Mcel - mkesh 290 979 adults 6 of mobile money users 2.0% of the market Vodacom - Mpesa 243 290 adults 5 of mobile money users 1.7% of the market Note: Data from Banco de Moçambique indicates the total number of Mobile Banking subscribers as 1.65 million in 2015 however there is no indication of the level of activity of these subscribers
63 What does it mean for individuals to have a mobile money account? While around 361,000 adults indicate they are registered mobile money users, a lower 262,000 say they have a mobile money account on their mobile phone. Just 176,000 said yes to both these statements MOBILE MONEY USAGE (Adults 16+) Access and usage of mobile money: Are you a registered mobile money user on any mobile network? Usage of cell phone / smartphone: You have an mkesh or Mpesa account 360 976 (2.5%) 261 679 (1.8%) 176 032 (1.) Personally registered for a mobile money account OR have a mobile money account on their phone: 446 623 adults 16+
64 The salaried urban and young educated urban market segments have the highest penetration of mobile money usage USAGE OF MOBILE MONEY (Adults 16+, By segment) Total Segment Total adults 18% 79% 14 431 915 Salaried urban 2 4 36% 698 620 Salaried rural 16% 80% 353 823 Self-employed urban viable 6% 3 60% 608 899 Young and educated urban 2 36% 4 372 774 0. Rural farmers 10% 89% 5 072 041 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Know about mobile money and use a mobile money account (own or someone else's) Know about mobile money but don't use an account Don't know about mobile money
Awareness of the terms mkesh / Mpesa / cell phone banking is generally low across the market, with the exception of the salaried urban and young and educated urban segments 65 100% AWARENESS / KNOWLEDGE OF FINANCIAL TERMS (Adults 16+) mkesh / Mpesa / cellphone banking 1 1 80% 60% 40% 69% 67% 7 2 4 3 3 39% 35% 89% 20% 0% 18% 18% 17% 1 15% 1 6 2 28% Total Male Female Salaried urban Salaried rural Self-employed urban viable 5 Young and educated urban 9% Rural farmers Heard of this and know what this means Never heard of this Heard of this but does not know what it means No response
Four out of five adults do not know about mobile money; of those who do around 16% make use of a mobile money (or of the total adult population) 66 DO YOU KNOW ABOUT "MOBILE MONEY", I.E. RELATED TO MPESA / MKESH? (Adults 16+) USAGE OF MOBILE MONEY (Adults 16+) 112,531 (0.8% of adults) Currently using another person s mobile money account No 11,420,22 0 79% Yes 3,011,695 2 360,976 (2.5% of adults) Registered mobile money user on any mobile network Total: 473 507 Note: Of the approximately 262,000 adults who say they have an mkesh or Mpesa account on their cell phone / smartphone, around 41,000 (16%) say they don t know about mobile money
For those adults who are currently making use of mobile money services, convenience and affordability were the most common reasons cited for using the service 67 REASONS FOR USING MOBILE MONEY SERVICES (Adults 16+, Use a mobile money account own or someone else s account) It is convenient (takes less time) 4 It is cheap 3 Suitable for clearing bills 2 It is the only one accessible in the area 19% Other 1
While adoption of mobile money in other markets has been driven by P2P remittances, those who currently make use of mobile money services in Mozambique mostly do so to purchase airtime 68 TRANSACTIONS NORMALLY CONDUCTED AT THE MOBILE MONEY POINT (Adults 16+, Use a mobile money account own or someone else s account) Purchase of airtime 7 Utility payments (water, electricity) Cash transfers Cash withdrawals Cash deposits To send money To receive money 3 25% 20% 19% 19% 1 Payment for goods and services Other Currently not using it 8% 6%
Most mobile money users have relatively quick access their nearest mobile money point (85% took less than 30 minutes to get there), and for the majority the service itself took less than 15 minutes to conduct 69 MOBILE MONEY SERVICES: TIMES TAKEN (Adults 16+, Use a mobile money account own or someone else s account) THE LAST TIME YOU VISITED A MOBILE MONEY SERVICE PROVIDER, HOW MUCH TIME DID YOU SPEND TO GET THE SERVICE? HOW LONG DID IT TAKE YOU TO GET THERE? More than an 1 hour 7% More than 3 hours 2 hours to 3 hours 30 to 60 minutes 1 h 30 minutes to 2 hours 15 to 30 minutes 9% 1 hour to 1 h 30 minutes 31 minutes to 1 hour 7% 5 to 15 minutes 26% 21 to 30 minutes 10% 11 to 20 minutes 39% Less than 5 minutes 56% Less than 10 minutes 35%
70 Awareness appears to be the key factor in not utilising mobile money services REASONS FOR NOT USING MOBILE MONEY SERVICES (Adults 16+, Know about mobile money but do not use an account) I don't have enough information about it I have not thought about it There are no mobile money providers in my area I don t have money to send or receive Don't have a cell phone I am not educated (can't use) Nothing Other I can't afford costs of mobile Don't trust telecom companies Don't have a SIM card I don't meet the legal requirements 2 17% 15% 1 1 8% 5% 58% Note: Response other (5%) and those with less than are not shown on the chart
71 Agenda Mozambique a FinScope overview Payments Access
The Access Frontier Methodology developed by David Porteous enables an identification and quantification of access barriers. It segments those who do not yet use a product into various market zones 72 Currently has / uses the product Too poor Market redistribution zone Total market Does not have access to the product Excluded by design Market development zone Does not have / use the product Excluded by default Has access to the product but does not use it Does not want the product Market enablement zone Potential users Source: Based on a paper entitled The Access Frontier as an Approach and Tool in Making Markets Work for the Poor by David Porteous
73 This presentation uses the FinScope data to explore access to the mobile money account of Vodacom M-Pesa Basic product description M-Pesa is a mobile financial service that allows you transfer and withdraw money, pay bills as well as buy airtime (vouchers), Credelec, Jackpot and pay different services, from your mobile phone Customer education through ATL (television, radio, social media) and BTL (promoters are allocated to agents to educate and sign up new customers) Requirements To open the account, the customer needs to visit an authorised M-Pesa agent in person Minimum age 16 Must have an active Vodacom Mozambique SIM to register for M-Pesa service Limited to one account per customer, irrespective of number of Vodacom SIMs are held Tier 1 account: Valid identification document (such as ID document, passport, military card, voters card, drivers licence, refugee card, DIRE) Tier 2 account: KYC requirements (identification and proof of address), fill in Vodacom subscriber registration form Need a standard Vodacom SIM card and a cell phone (any type) No minimum deposit required to open the account, however as part of their customer education programme will receive a guided service trial at the registering agent if deposit MT 20 Source: http://www.vm.co.mz/en/individual/m-pesa
74 This presentation uses the FinScope data to explore access to the mobile money account of Vodacom M-Pesa Service channels M-Pesa is available in every province with over 9,000 active agents, however there are some districts which are not covered Agents can be found in areas where there are business activities, including markets Deposits made at any authorised M-Pesa agent Withdrawals made at any authorised M-Pesa agent or Ponto 24 ATMs Transfers are done via the account using USSD can send to a registered or unregistered person, need to know their cell phone number and the amount to send they can then withdraw the money on their end If the recipient is not a registered customer, they do not pay withdrawal fees (the sender pays the transaction fee) Can also: Buy airtime, buy Credelec, buy Jackpot, pay bills (e.g. TV, water, Vodacom Post Paid, EDM Post Paid, UEM fees) Source: http://www.vm.co.mz/en/individual/m-pesa
75 This presentation uses the FinScope data to explore access to the mobile money account of Vodacom M-Pesa Fees and pricing Monthly fees: None Minimum balance requirement: None Interest paid: None Penalty charges: None Balance enquiry / Statement: Free Deposits: Free (minimum deposit amount of MT 20) Withdrawals (agents or ATMs): 20 100 (fee: 3) 101 1,000 (8) 1,001 2,000 (12) 2,001 5,000 (15) 5,001 10,000 (50) 10,001 25,000 (70) Maximum withdrawal amounts (annual): Tier 1: 65,000 Tier 2: 1,900,000 Sending to a non-registered customer: 5 100 (fee: 3) 101 1,000 (15) 1,001 2,000 (20) 2,001 5,000 (25) 5,001 10,000 (80) 10,001 25,000 (100) Sending to a registered customer: 5 25,000 (fee: 1) Source: http://www.vm.co.mz/en/individual/m-pesa
76 Access Frontier Methodology: Step 1 Define the total market Currently has / uses the product Too poor Market redistribution zone Total market Does not have access to the product Excluded by design Market development zone Does not have / use the product Excluded by default Has access to the product but does not use it Does not want the product Market enablement zone Potential users Source: Based on a paper entitled The Access Frontier as an Approach and Tool in Making Markets Work for the Poor by David Porteous
According to FinScope 2014 there are 14.43 million adults aged 16 or more in the country. The minimum age to open an M-Pesa account is 16 and therefore all adults can be included in the analysis 77 AGE (Adults 16+) 61 + 1,015,015 7% Unspecified 365,124 16-17 1,124,215 8% 18-20 1,639,596 1 35-60 5,278,251 37% 21-34 5,009,715 35%
78 Access Frontier Methodology: Step 2 Define the current market Currently has / uses the product Too poor Market redistribution zone Total market Adults 16+ 14 431 915 Does not have access to the product Excluded by design Market development zone Does not have / use the product Excluded by default Has access to the product but does not use it Does not want the product Market enablement zone Potential users Source: Based on a paper entitled The Access Frontier as an Approach and Tool in Making Markets Work for the Poor by David Porteous
There are just under 361,000 adults that are personally registered for a mobile money service with a mobile phone company (2.5% of adults). Presumably if an individual has access to an mkesh account they would not also require access to an Mpesa account 79 MOBILE MONEY SERVICE PROVIDER (Personally registered for a mobile money account, 360 976 adults 16+) Both mkesh and Mpesa 48 247adults 1 of mobile money account holders 0. of the market Mcel - mkesh 215 168 adults 60% of mobile money account holders 1.5% of the market Vodacom - Mpesa 194 055 adults 5 of mobile money account holders 1. of the market
80 Access Frontier Methodology: Step 3 Identify those in the market redistribution zone - There are no indicators available in the survey data relating to poverty and deprivation, therefore no redistribution zone has been identified Currently has / uses the product Too poor Market redistribution zone 360 976 Total market Adults 16+ 14 431 915 Does not have access to the product Excluded by design Market development zone Does not have / use the product Excluded by default 14 070 939 Has access to the product but does not use it Does not want the product Market enablement zone Potential users Source: Based on a paper entitled The Access Frontier as an Approach and Tool in Making Markets Work for the Poor by David Porteous
81 Access Frontier Methodology: Step 4 Explore the potential market Currently has / uses the product Too poor Market redistribution zone 360 976 No data Total market Adults 16+ 14 431 915 Does not have access to the product Excluded by design Market development zone Does not have / use the product Excluded by default 14 070 939 Has access to the product but does not use it Does not want the product Market enablement zone Potential users Source: Based on a paper entitled The Access Frontier as an Approach and Tool in Making Markets Work for the Poor by David Porteous
82 What would an individual need to send and receive money using Mpesa? WHAT WOULD YOU NEED TO USE MPESA? DOCUMENTATION AFFORDABILITY PHYSICAL ACCESS COMMUNICATION AWARENESS Identification such as an identity card, national registration card or passport Proof of address required to register for Tier 2 account Usage costs depend on the sender deposits into the account and the amount transferred Required to travel to a participating agent The sender requires a cell phone to transfer funds The receiver requires some form of communication to acquire the reference number for withdrawal Awareness of mobile money products and services
83 Documentation WHAT WOULD YOU NEED TO USE MPESA? DOCUMENTATION AFFORDABILITY PHYSICAL ACCESS COMMUNICATION AWARENESS Identification such as an identity card, national registration card or passport Proof of address required to register for Tier 2 account Usage costs depend on the sender deposits into the account and the amount transferred Required to travel to a participating agent The sender requires a cell phone to transfer funds The receiver requires some form of communication to acquire the reference number for withdrawal Awareness of mobile money products and services
Identification such as an identity card or passport is required to register for an account. In order to both send and receive money using this service, an individual must be able to provide identification to the agent 84 DOCUMENTS HAVE IN OWN NAME (Adults 16+, Not personally registered for a mobile money account) Identity document (BI / DIRE) 50% None of the above 49% The electricity bill 5% Passport Water bill Title deed of house / building To register for a Tier 2 account, an individual would also need a proof of address Salary or payslip
85 Affordability WHAT WOULD YOU NEED TO USE MPESA? DOCUMENTATION AFFORDABILITY PHYSICAL ACCESS COMMUNICATION AWARENESS Identification such as an identity card, national registration card or passport Proof of address required to register for Tier 2 account Usage costs depend on the sender deposits into the account and the amount transferred Required to travel to a participating agent The sender requires a cell phone to transfer funds The receiver requires some form of communication to acquire the reference number for withdrawal Awareness of mobile money products and services
86 It is difficult to know up to what percentage of the transfer amount an individual is willing to or even can afford. For the purposes of this analysis, an individual cannot use the service if he or she has no money to send (that is, no personal income). The receiver does not have this constraint PERSONAL MONTHLY INCOME (Adults 16+, Not personally registered for a mobile money account) Refused 100 001 MT or more 0% 50 001-100 000 MT 0% 25 001-50 000 MT 5 001-25 000 MT 15% Less than 5 000 MT 65% No income Don't know 1 0% 10% 20% 30% 40% 50% 60% 70%
87 Physical access WHAT WOULD YOU NEED TO USE MPESA? DOCUMENTATION AFFORDABILITY PHYSICAL ACCESS COMMUNICATION AWARENESS Identification such as an identity card, national registration card or passport Proof of address required to register for Tier 2 account Usage costs depend on the sender deposits into the account and the amount transferred Required to travel to a participating agent The sender requires a cell phone to transfer funds The receiver requires some form of communication to acquire the reference number for withdrawal Awareness of mobile money products and services
M-Pesa is available in every province with over 9,000 active agents. There are some districts which are not covered, however district-level data is not available in the survey MANICA Bárué Chimoio (City) Gondola Gondola (Inchope) Manica (District) Sussundenga Vanduzi LOCATION OF MPESA AGENTS ACROSS MOZAMBIQUE TETE Angonia Cahora-Bassa Changara Furancungo Macanga Moatize Tete (City) NIASSA Cuamba Lichinga (City) CABO DELGADO Chiúre Mecufi Montepuez Pemba (City) NAMPULA Angoche Meconta Mogovolas Murrupula Nacala - Porto Nacala - Velha Nampula (City) Nampula (Rapale) Ribáuè 88 MAPUTO PROVINCIA Boane Magude Manhiça Marracuene Matola (City) Matutuine Moamba Namaacha GAZA Bilene-Macia Chibuto Chókwè Guijá Manjacaze - Dingane Xai-Xai MAPUTO CIDADE SOFALA Beira (City) Búzi Caia Dondo Dondo (Mafambisse) Gorongosa Nhamatanda ZAMBEZIA Alto Molócuè Gurúè Mocuba Nicoadala Quelimane (City) INHAMBANE Homoine Inhambane (City) Inharrime Inhassoro Jangamo Massinga Maxixe Maxixe (City) Morrumbene Panda Vilanculo Zavala Source: http://www.vm.co.mz/en/individual/m-pesa
As an alternative we can explore access to markets that could be used to cash in and out. For purposes of this analysis, both the sender and receiver are considered to have access if they live within an hour of their nearest market 89 METHOD AND TIME OF TRAVEL TO NEAREST MARKET (Adults 16+, Not personally registered for a mobile money account) HOW WOULD YOU GET THERE? HOW LONG WOULD IT TAKE? Never travels there / Does not know where it is 9% 7% N/A More than 3 hours 8% 6% 0% Public transport - bus, bicycle, taxi etc. Other transport you or household owns such as bicycle, ox cart etc. Own or household's motor vehicle or motorcycle 1 8% 1 9% 6% 2 hours to 3 hours 1h 30 minutes to 2 hours 1 hour to 1h 30 minutes 31 minutes to an 1 hour 21 to 30 minutes 5% 6% 6% 10% 7% 9% 1 Walk 60% 7 11 to 20 minutes Less than 10 minutes 26% 3 27% 36% 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% Rural Urban * Other type of transport is less than for both urban and rural and is not shown on the chart
90 Communication WHAT WOULD YOU NEED TO USE MPESA? DOCUMENTATION AFFORDABILITY PHYSICAL ACCESS COMMUNICATION AWARENESS Identification such as an identity card, national registration card or passport Proof of address required to register for Tier 2 account Usage costs depend on the sender deposits into the account and the amount transferred Required to travel to a participating agent The sender requires a cell phone to transfer funds The receiver requires some form of communication to acquire the reference number for withdrawal Awareness of mobile money products and services
The sender requires access to a cell phone in order to send funds. This can be their own cell phone, a cell phone from work, or someone else s cell phone 91 HAVE ACCESS TO TECHNOLOGY (Adults 16+, Not personally registered for a mobile money account) Normal mobile phone own or from work 48% Someone else's cell phone 29% Smartphone (i.e. with internet access) own or work 8% Note: Selected responses are shown on the chart
There needs to be some form of communication between both the sender and receiver in order to have necessary information (amount sent and reference number). An individual is considered to have access to communications if they have access to a cell phone / smartphone, home or public phone, the internet or email 92 HAVE ACCESS TO TECHNOLOGY (Adults 16+, Not personally registered for a mobile money account) Normal mobile phone (own / work) 48% Someone else's cell phone 29% Smartphone (own / work) 8% Public phone / public cell phone Internet / email at the internet cafe Someone else's telephone Internet / email at home Internet / email of another person Telephone at home Note: Selected responses are shown on the chart
93 Awareness WHAT WOULD YOU NEED TO USE MPESA? DOCUMENTATION AFFORDABILITY PHYSICAL ACCESS COMMUNICATION AWARENESS Identification such as an identity card, national registration card or passport Proof of address required to register for Tier 2 account Usage costs depend on the sender deposits into the account and the amount transferred Required to travel to a participating agent The sender requires a cell phone to transfer funds The receiver requires some form of communication to acquire the reference number for withdrawal Awareness of mobile money products and services
94 Awareness of mobile money is generally low across the market. One in five adults in the potential market say they know about mobile money. Arguably, receivers do not have this constraint as the sender should let them know when, where and how to collect AWARENESS / KNOWLEDGE OF MOBILE MONEY (Adults 16+, Not personally registered for a mobile money account) Financial literacy: mkesh / Mpesa / cellphone banking Never heard of this 7 No response 0.5% Heard of this and know what this means 1 Heard of this but does not know what it means 18% Mobile money: Do you know about mobile money i.e. related to Mpesa / mkesh? No 8 Yes 19%
95 Awareness of the service is highest in Maputo City where 59% of the potential market say they know about mobile money. Awareness is higher in urban centres where 35% of the potential market know about mobile money while this proportion is only 1 in rural areas DO YOU KNOW ABOUT MOBILE MONEY I.E. RELATED TO MPESA / MKESH? (Adults 16+, Not personally registered for a mobile money account) Tete: 9% Niassa: Cabo Delgado: 1 Nampula: < 10 Zambezia: 3 10-19 Manica: Sofala: 2 20-29 30-39 Gaza: 8% Maputo Provincia: 46% Inhambane: 20% Maputo Cidade: 59% 40-49 50 +
96 We can use these indicators to populate a frontier WHAT WOULD YOU NEED TO USE MPESA? DOCUMENTATION AFFORDABILITY PHYSICAL ACCESS COMMUNICATION AWARENESS Identification such as an identity card, national registration card or passport Proof of address required to register for Tier 2 account Usage costs depend on the sender deposits into the account and the amount transferred Required to travel to a participating agent The sender requires a cell phone to transfer funds The receiver requires some form of communication to acquire the reference number for withdrawal Awareness of mobile money products and services
97 Access frontier for an Mpesa mobile money account Personally registered for a mobile money account No identification card or passport 7 002 716 360 976 Cannot afford No personal income 216 500 Total market Adults 16+ Does not have access to the product No physical access 3 211 583 Market development zone 14 431 915 No cellphone 5 700 651 12 638 205 Not registered for a mobile money account Do not know about mobile money 11 420 220 14 070 939 Has access to the product (potential users) Have access and already have a bank account Have access and don't have a bank account 717 264 715 469 Market enablement zone 1 432 733
98 The frontier can be summarised as a strand ACCESS STRAND FOR MPESA: ALL ADULTS Total Market All adults 16+ 5% 5% 88% 14 431 915 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Currently has a mobile money account Have access and already have a bank account Have access and don't have a bank account Cannot access
If we consider the access frontier by removing the constraint that might not be binding (i.e. awareness) the addressable market increases from 1.43 million to 4.09 million adults 99 ACCESS STRAND FOR MPESA: ALL ADULTS Total Market All adults 16+ 19% 10% 69% 14 431 915 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Currently has a mobile money account Have access and already have a bank account Have access and don't have a bank account Cannot access
We can use all of the constraints identified to populate frontiers for the market segments. Awareness of mobile money is the largest barrier for all segments Total market Adults 16+ SU 698 620 SR 353 823 SEUV 608 899 YEU 372 774 Personally registered for a mobile money account SU 136 759 SR 13 631 SEUV 21 646 YEU 61 764 RF 6 049 Not registered for a mobile money account Does not have access to the product Cannot afford No personal income 0 No physical access No cellphone Do not know about mobile money Development zone: Salaried urban 47 094 19 331 253 630 299 776 Salaried rural 0 105 791 71 578 282 138 304 802 SE urban viable 0 71 705 60 684 363 669 414 913 Young and educated urban 7 968 18 049 44 919 160 971 191 968 0 100 Rural farmers No identification card or passport 33 123 62 252 114 566 11 650 2 976 465 1 245 804 2 628 009 4 537 722 4 925 174 RF 5 072 041 Has access to the product but does not use it Have access and already have a bank account Have access and don't have a bank account 230 132 27 234 81 670 76 568 21 408 31 953 8 156 90 671 42 475 119 410 Enablement zone: 262 085 35 390 172 340 119 043 140 818
101 Those segments living in rural areas are the hardest to reach ACCESS STRAND FOR MPESA: MARKET SEGMENTS Total Segment Salaried urban 20% 5% 3 4 698 620 Salaried rural 8% 86% 353 823 Self-employed urban viable 15% 1 68% 608 899 Young and educated urban 17% 1 2 5 372 774 0. 0. Rural farmers 97% 5 072 041 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Currently has a mobile money account Have access and already have a bank account Have access and don't have a bank account Cannot access
102 Access strands removing the non-binding constraint (i.e. awareness) ACCESS STRAND FOR MPESA: MARKET SEGMENTS Total Segment Salaried urban 20% 1 55% 1 698 620 Salaried rural 16% 27% 5 353 823 Self-employed urban viable 36% 29% 3 608 899 Young and educated urban 17% 30% 3 2 372 774 0. 1.7% Rural farmers 16% 8 5 072 041 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Currently has a mobile money account Have access and already have a bank account Have access and don't have a bank account Cannot access
Now consider access to a traditional bank account. The rural farmers are the hardest segment to reach because of a number of key constraints such as lack of identification and awareness, and physical access constraints 103 ACCESS STRAND FOR PERSONAL BANK ACCOUNT: MARKET SEGMENTS Total Segment Salaried urban 79% 1 6% 698 620 Salaried rural 50% 1 3 353 823 Self-employed urban viable 36% 3 3 608 899 Young and educated urban 4 2 30% 372 774 Rural farmers 1 85% 5 072 041 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Have a bank account Have access but don't use Don't want a bank account Cannot access a bank account
104 Access strands removing the non-binding constraints (i.e. awareness and trust) ACCESS STRAND FOR PERSONAL BANK ACCOUNT: MARKET SEGMENTS Total Segment Salaried urban 79% 1 5% 698 620 Salaried rural 50% 20% 28% 353 823 Self-employed urban viable 36% 38% 2 608 899 Young and educated urban 4 25% 5% 26% 372 774 Rural farmers 20% 7 5 072 041 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Have a bank account Have access but don't use Don't want a bank account Cannot access a bank account
105 Is sending / receiving remittances the primary purpose of a mobile money account? While improving the physical footprint significantly aids access for the receivers, awareness is still a major barrier to the adoption of mobile money services for the senders Personally registered for a mobile money account No identification card or passport Sender 7 002 716 Recipient 360 976 Cannot afford No personal income 216 500 N/A Total market Adults 16+ 14 431 915 Does not have access to the product No physical access No cellphone 3 211 583 5 700 651 N/A Not registered for a mobile money account 14 070 939 No communication channel 5 651 905 Do not know about mobile money 11 420 220 N/A Market development zone 12 638 205 9 924 379 Has access to the product but does not use it Potential users (Enablement zone) 1 432 733 4 146 559
106 The frontiers can be summarised as a strand ACCESS STRAND FOR MPESA (Total market: 14 431 915 adults 16+) Total Market Recipient 29% 69% 14 431 915 Sender 10% 88% 14 431 915 0% 20% 40% 60% 80% 100% Currently has a mobile money account Has access but does not use Cannot access
107 We can use all of the constraints identified to populate frontiers for the market segments first for the senders Personally registered for a mobile money account SU 136 759 Salaried urban Salaried rural SE urban viable Young and educated urban Rural farmers No identification card or passport 33 123 62 252 114 566 11 650 2 976 465 Total market Adults 16+ SU 698 620 SR 353 823 SEUV 608 899 YEU 372 774 SR 13 631 SEUV 21 646 YEU 61 764 RF 6 049 Not registered for a mobile money account Does not have access to the product Cannot afford No personal income 0 No physical access No cellphone Do not know about mobile money 47 094 19 331 253 630 0 105 791 71 578 282 138 0 71 705 60 684 363 669 7 968 18 049 44 919 160 971 0 1 245 804 2 628 009 No communication channel 16 654 71 578 56 340 40 793 2 608 960 4 537 722 RF 5 072 041 Development zone: 299 776 304 802 414 913 191 968 4 925 174 Has access to the product but does not use it Potential users (Enablement zone) 262 085 35 390 172 340 119 043 140 818
108 Those segments living in rural areas are the hardest to reach ACCESS STRAND FOR MPESA: SENDER Total Segment Salaried urban 20% 38% 4 698 620 Salaried rural 10% 86% 353 823 Self-employed urban viable 28% 68% 608 899 Young and educated urban 17% 3 5 372 774 0. Rural farmers 97% 5 072 041 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Currently has a mobile money account Has access but does not use Cannot access
109 The affordability and awareness constraints do not apply to the recipients Personally registered for a mobile money account Salaried urban Salaried rural SE urban viable Young and educated urban Rural farmers SU 136 759 No identification card or passport 33 123 62 252 114 566 11 650 2 976 465 Total market Adults 16+ SU 698 620 SR 353 823 SEUV 608 899 YEU 372 774 SR 13 631 SEUV 21 646 YEU 61 764 RF 6 049 Not registered for a mobile money account Does not have access to the product No physical access No communication channel Development zone: 47 094 105 791 71 705 18 049 1 245 804 16 654 71 578 56 340 40 793 2 608 960 91 490 187 780 192 574 70 491 4 176 359 RF 5 072 041 Has access to the product but does not use it Potential users (Enablement zone) 470 371 152 412 394 679 240 519 889 634
110 Those segments living in rural areas are the hardest to reach for the recipients as well ACCESS STRAND FOR MPESA: RECIPIENT Total Segment Salaried urban 20% 67% 1 698 620 Salaried rural 4 5 353 823 Self-employed urban viable 65% 3 608 899 Young and educated urban 17% 65% 19% 372 774 0. Rural farmers 18% 8 5 072 041 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Currently has a mobile money account Has access but does not use Cannot access
111 Agenda Mozambique a FinScope overview Payments Access
112 ANALYSIS OF FINSCOPE DATA PREPARATION OF PRESENTATIONS SELECTION OF PRODUCTS GATHERING OF PRODUCT SPECIFICATIONS Illana Melzer illana@eighty20.co.za www.eighty20.co.za +27 21 460 0440 Henriqueta Hunguana hhunguana@icc.co.mz www.icc.co.mz +258 82 305 6877