WIZZIT--Your Bank in Your Pocket: Affordable financial services for all. Banking the unbanked of the World.

Congratulations! This Entry has been selected as a finalist.

WIZZIT--Your Bank in Your Pocket: Affordable financial services for all. Banking the unbanked of the World.

South AfricaSouth Africa
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
Scaling
Budget: 
$1 million - $5 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

WIZZIT - your bank in your pocket. Financial access for all. Banking the unbanked of the world. Making Economic Citizens for the World

About Project

Problem: What problem is this project trying to address?

In the world today, 7 billion people, the World Bank estimates that 5 billion do not have access to financial services. It is very difficult if not impossible to become an economic citizen without access to even a simple bank account where money can be saved and simple transactions can be concluded. Increasingly the bottom of the pyramid are victims of crime because of their total dependence on cash. Traditional Banks have struggled to get the business model to work in servicing this segment of the market and the solution lies in “bringing the bank to the people” as against the traditional paradigm of getting the people to come to the bank.

Solution: What is the proposed solution? Please be specific!

The product offering is a fully functional transactional bank account that uses mobile phones for making real-time person-to-person payments, transfers and pre-paid purchases, and a “Maestro” branded debit card (MasterCard product) for making payments in the formal retail environment. (In Eastern Europe and some of the African countries we have launched with a Visa Electron debit card.)Financial inclusion we believe is a process and we launched with transactional banking and giving people a safe place to keep their money. Our vision was to increase our financial services offering in line with the needs of our market. This includes offering: Micro Insurance Savings products( study underway with possible launch late 2012), Personal Loans, MSME loans. (Micro and small enterprise lending).
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

WIZZIT has a vision to bank the unbanked of the world utilizing mobile technology. Commencing with transactional banking we are in a position to build and grow with our customers the full spectrum of financial services including access to loans/credit, savings and investment products as well as micro insurance. As part of our commitment to the financially excluded, we are busy piloting a Micro finance initiative aimed at providing finance to the SMME market. This has gone incredibly well in South Africa and we are ready to ramp this up and roll it out more aggressively. Not only does the SME benefit from access to finance but they in turn become agents of the WIZZIT bank accounts which they market to their customers and in doing so create a financial eco system. Our vision is to use the South African market as a blue print and test bed for the WIZZIT model and then to take the proven models to other emerging markets. Our partners in these markets are banks and deposit taking micro finance institutions. The partner bank will offer the state of the art innovative Mobile Banking to their existing customers as well as taking the WIZZIT model and using this to gain access to an untapped market being the un and underbanked segment of the market. Using the traditional bank model of brick and mortar has proven to be too expensive to bring effective and affordable financial services to the financially excluded segment of the market.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

The space has become increasingly competitive and confused with enormous Hype not being supported by real meaningful results. Traditional banks are trying with Mobile Banking but the low margins do not meet their revenue expectations. Mobile Network Operators have certainly made the most noise and caused the most confusion. They are involved in mobile payments (primarily money transfer) and NOT Mobile Banking or financial inclusion. Increasingly there is Regulatory pressure on their model and modus operandi. The Card Associations with their global brand awareness, systems and standards it would appear that Visa and MasterCard are best poised to capitalise on Mobile Banking (with a financial inclusion focus.)
Team

Founding Story

WIZZIT was created in early 2002 through a ‘challenge’ posed by Cyril Ramaphosa through a statement ‘you don’t know how difficult it is for the average South African to open a bank account’. This challenge was simply to find a workable solution to bank the unbanked. Cyril further stated that people cannot become economic citizens if they don’t start with a basic bank account. We strongly believe today that one of the pillars in reducing global poverty is to make economic citizens of all.
About You
Organization:
WIZZIT
About You
First Name

Brian

Last Name

Richardson

About Your Organization
Organization Name

WIZZIT

Organization Country

, XX

Country where this project is creating social impact

, XX

How long has your organization been operating?

More than 5 years

Has the organization received awards or honors? Please tell us about them

>President Bill Clinton invitation to address the Clinton Global Initiative on the WIZZIT model as a means to bank a billion
>World Bank-International Best Practice model to bank the unbanked-IFC a 10% equity investment in WIZZIT
>CGap-Gates Foundation Grant
>Netexplorateur Grand Prix for Innovation awarded by the French Minister of Finance
>Top Three Innovative Banks in Africa-African Journal of Banking
>Runner up Stockholm Challenge for banking innovation
>Financial Times runner up in Emerging Markets-Banking at the Bottom of the Pyramid
>Only Bank and only South African company featured in Professor Porters "101 Innovations that shaped the world"
>Deputy Minister of Finance Jabulani Moleketi featured WIZZIT in speech in London
>Past Deputy President Pumzile Mlambo Ngcuka-having been told in Mexico that the best model to bank the unbanked is in fact in South Africa-WIZZIT

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Innovation
How long have you been in operation?

Operating for more than 5 years

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two

Access.

Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve

WIZZIT’s business is the result of seven years of endeavour which includes three years’ research into the mass retail banking market around the world, with a focus on opening a bank account and finding a secure and efficient payment mechanism for the unbanked people of the World. WIZZIT has and will continue to provide social upliftment by empowering poorer people to interact financially through making financial services widely accessible and having proven its model in South Africa will actively expand globally. WIZZIT set up its own mobile development company, WIZZIT International, with a clear mandate to find a banking solution that would work on any cell phone and all SIM cards and was network agnostic. After intensive research, testing and analysis, WIZZIT was ready to launch in late

Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,, Powerful incentives for financial service providers to move up-market.

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:
For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

The un and underbanked. Typically the more rurally based. The reasons for the high number of unbanked in the world are best summarised through what I have termed the 3 ‘A’s” – affordability, accessibility and availability. All of these have been addressed in this note. In a low margin business that is very price sensitive, one needs transactional volumes. To get to this requires significant time and costs in building trust and credibility. It also requires a need understanding of the needs of the market and traditional bank products that work for the affluent market may not have the same demand in the unbanked market.

Could your solution work in other geographies or regions? If so, where?

Our focus is on emerging markets and we currently have live deployments in South Africa, Tanzania, Zambia, Rwanda, Botswana, Namibia, Romania with contracts in varying stages of finalisation in Latin and Central America and Africa. We have to date used South Africa as a test market for various concepts and products before taking them to our other partner banks.

If your solution is dramatically successful, how will things be different in 10 years?

There will b a dramatic decrease in the worlds unbanked. We will have made strides towards a cashless society.

What will have had to have changed to make this happen?

We require a collaborative effort between Banks, MNOs; Central Banks, Card Associations and Money Transfer organisations. We need a no frills universal/global bank account available to all.

What has been the impact of your solution to date?

To date, we through our partner banks have open accounts for close to 5 million people; processed 100 million transactions to the value of $20 billion. We have created employment opportunities for close to 10 000 previously unemployed people and in South Africa provided close to 5 000 Micro loans -both personal and micro and small business and pioneered disbursements and collections through mobile phones.

What is your projected impact over the next five years?

To have launched in a further 10 countries; to have opened a further 5 million accounts; To provide viable small, medium and micro enterprises with comprehensive financing & business support services in the most profitable, quickest, creative and efficient way possible, using state of the art technology; To establish a profitable SMME Training Institute / Academy that will provide a variety of suitable, practical training courses, after-care services and mentorship interventions for entrepreneurs.

What barriers might hinder the success of your project? How do you plan to overcome them?

The barriers include regulatory issues, competition, financial literacy, access to funding for the loan book. We continually work hard to build relationships with the Regulators and give freely of our time to participate in global forums and working groups such as FATF. I speak at global conferences (at no charge) promoting financial inclusion and increasingly gaining support for a universal/global no frills bank account; I network vigorously and build relationships with other thought and opinion leaders in the industry and continually try and get donor support for our financial literacy and Entrepreneurial training programmes.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

To have launched in at least 1 new country; to have secured a line of wholesale funding for the Micro loan business

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Finalise agreements with at least one bank

Task 2

Finalise the structure of the business to free me up to focus on global opportunities

Task 3

To have launched the merchant module as part of our Mobile Banking suite in at least one of our markets

Now think bigger! Identify your 12-month impact milestone

To launch 3 more banks; progress on Universal bank account concept; ID and decide public listing or global partner

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

To have signed agreements with three new banks in emerging markets: Africa, Central America and Latin America

Task 2

To take Universal/Global account to initial business plan stage

Task 3

To commence work on the listing of WIZZIT

Sustainability
Tell us about your partnerships

Our partnerships are with banks in emerging markets, who share our passion for financial inclusion. Not only do we provide state of the art mobile banking technology but the ‘WIZZIT model” of banking the unbanked. We assist our bank partners with integration into the Mobile Network Operators (we have relationships with all of the world major MNO’s).

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?

We are targetting emerging markets where there are high numbers of unabnkwd as well as high levels of mobile phone penetration.
Currently we are in 7 Countries and we are close to finalising deals in Nigeria as well as Argentina, and through a distribution partner the Countries of Central America. We have also targetted Peru where I will be presenting our innovative model around banking the unbanked and have submitted a proposal in response to a RFP for the installation of our model and technology in Madagascar

What type of operating environment and internal organizational factors make your innovation successful?

In our global expansion model we partner with existing banks, ideally one of the tops 5 banks within a country. Above all else, the partner bank has the vision, passion and enthusiasm around financial inclusion that we have. They would typically appoint a dedicated team within the bank to drive the initiative and this is often set up as a separate operating division. We assist the banks in establishing relationships with the Mobile Network Operators within the country and integrate our mobile banking into the banks core banking system as well as into the MNO. For this we end up working with the Bank's IT resources. We also present our model and system to the Bank Regulator and have always gained their support. We work with the Marketing and strategy divisions of the bank in every aspect.

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

As mentioned we are actively looking for wholesale funding to fund and support our loan book. We are further looking for donor/grant assistance in running our College of Entrepreneurship and programmes of financial literacy.