One of the enterprises that IFC has been working with in Cambodia is WING, a subsidiary of the Australia and New Zealand Banking Group (ANZ). In late January, WING launched a mobile payments business that targets unbanked customers. Last week, I had the opportunity to visit WING’s offices, meet their team, participate in their rollout, and travel to remote areas to visit agent locations. I was impressed by the high energy and creativity of WING’s staff, their incredible progress in a relatively short period of time, their willingness to adapt to new lessons quickly, and the unique aspects of their solution.
WING’s USSD-based service will allow customers to save, make purchases, transfer money to both WING and non-WING users, and perform a range of other financial services – all through mobile phones. Since WING account numbers do not have to be tied to a customer’s mobile phone number, the service is also available to people who do not own phones. In a country like Cambodia, this feature is extremely important because a large percentage of the population still does not own mobile phones but have easy access via family and friends.
Prior to designing their product, WING performed extensive market research to ensure that they understood the target market and its financial needs. The resultant service was developed in response to those findings. Product development occurred over a 9-month period during which the company performed iterative testing and redesign, mapping their solution closer and closer to the needs of the market.
IFC Cambodia played an integral role in the design and implementation phases of WING. Together, IFC and ANZ funded experts who performed market research, developed customer use cases, honed the business plans and financial models, developed a merchant strategy, and established a sales and marketing plan. The companies also worked together with the National Bank of Cambodia to ensure that WING’s approach would meet with their approval.
Garment workers and microfinance institutions (MFIs) are among the market segments WING has targeted. There are more than 300,000 garment workers in Cambodia, who send half of their salary ($20 - $30) home at a cost of $2. Thus, they are paying up to 10% of the amount in transaction fees. WING will provide the same service at a significantly lower cost.
WING’s approach to MFIs is particularly interesting to me because I think many MFIs have been struggling to understand the value proposition of mobile money for their businesses and for their customers. In Cambodia, WING has partnered with VisionFund, a World Vision initiative. VisionFund has a very clear, phased strategy related to WING services. First, VisionFund branches will serve as cash-in/cash-out points for WING customers that live in their proximity.
Second, VisionFund is very interested in community development and in providing a greater range of financial services to the people living around their branches. The organisation has a particular interest in increasing savings, so they plan to use WING as a way to help the local population – even those who are not their customers – to save. In addition to the cash-in/cash-out function they will provide, VisionFund is also positioning itself as a “WING Pilot,” which is an individual – or in this case an organisation – that actively recruits new WING customers. For each customer that is acquired, the WING Pilots receive a commission. In its first week as a WING Pilot, VisionFund acquired 200 new customers.
Third, WING will provide VisionFund with the ability to disburse loans and collect payments electronically. Since VisionFund’s primary lending mechanism is through a group-lending model, this means that they will allow their customers to pay back loans outside of the group. Members will still gather once a month, but instead of using the time to collect all the loan payments the group will deal only with delinquencies. The time saved will be used for financial literacy training and other community-empowerment activities.
And, finally, VisionFund sees the opportunity to provide their customers with other information, such as market data, via their phones. To encourage uptake, VisionFund will be working with Cambodia’s Village Phone project to provide loans so some of their customers can purchase phones. In this way, at least a few people in each village will own phones, which other community members can use to access their WING accounts.
As WING takes root in Cambodia, ANZ will be looking to other countries where it can replicate its model.
IFC’s Access to Finance program works with financial institutions and regulators to strengthen the financial sector, deepen financial intermediation and outreach, with the objective to increase the private sector’s access to finance.
With a view to successfully introduce branchless banking services to the unbanked, low-income customers in Cambodia, IFC and Wing entered into a cooperation agreement under which IFC provided technical assistance to Wing on a 50-50 cost sharing basis. With technical assistance from IFC, Wing developed a customer care center, a merchant network, and a strategy for technology uptake. IFC and WING also agreed to look into jointly conducting a financial literacy campaign on mobile banking.
In addition, IFC has been facilitating a dialogue with the National Bank of Cambodia (NBC) to make sure the central bank is comfortable with the official introduction of the solution. IFC will continue to work with NBC on an improved regulatory environment.
Next week, I will be in Papua New Guinea with colleagues from IFC and UNDP. Together, we will be investigating options for a cash-in/cash-out distribution network. In addition, we will be researching the current way that money moves in the country. Expect a post about our findings soon.