Jump-starting mobile money innovation for the advancement of financial inclusion in Lesotho

A financially inclusive system serves every individual’s needs by empowering them to manage liquidity, achieve goals and face shocks, ultimately contributing to an improved quality of life. The use of formal financial services is limited in Lesotho, particularly for low-income and rural populations (69% of Basotho adults are estimated to live in rural areas [1]). Mobile money offers an important avenue to deliver financial services as the use of mobile phones is extensive and wide-spread in Lesotho (69.8% of adults are estimated to have access to a mobile device [1]).

The advent of mobile money offers an increasingly broad range of financial products that help customers overcome traditional distribution challenges related to the size of the financial sector footprint. However, despite a range of mobile money product offerings in Lesotho, the uptake of these services remains limited. While there is great potential for the growth of mobile money in Lesotho, product innovations are required to provide services that meet the needs of the financially underserved.

A hackathon is a competition during which computer programmers and other tech-savvy individuals collaborate intensively to innovate and design solutions to a problem using technology. Typically lasting several days, the goal of a Hackathon is to develop usable prototypes that offer innovation through novel product design or by improving existing product/services. Each team then presents their solution to a panel of judges who evaluate the product innovation according to a range of fundamental criteria. Prizes are awarded to the team that develops the best solution to a particular industry problem.

In partnership with FinMark Trust, United Nations Development Programme (UNDP) and Lesotho Ministry of Finance hosted the 2018 Lesotho SIMM Hackathon in Maseru from the 20th-22nd of April. The competition set out to generate innovative ideas and facilitate mobile money product diversification to unlock opportunities for improved access to financial services. By identifying new and existing start-up companies within the finance sector, the Hackathon benefits youth employment by offering incubation and financial support to the winning teams. The event targeted applicants with an interest in developing solutions to unique mobile money ecosystem challenges in Lesotho (awareness, acceptance, availability, affordability [1]), with extensive support provided by mentors and key stakeholders throughout the competition duration. The Hackathon provided a platform for young innovators to collaborate and explore the role of data in product design, while interacting with financial service providers (FSPs), mobile network operators (MNOs), business development partners, and civil society.

Over the 3 days, 17 teams (62 participants) developed prototype solutions that addressed 1 of 6 mobile money ecosystem challenges. During the course of the Hackathon, the participants were exposed to a number of skills development sessions and received continuous support towards the design of their solutions. The 2018 Lesotho SIMM Hackathon culminated in all 17 teams pitching their prototype solutions to a panel of expert judges. Based on a range of fundamental criteria, 7 solutions were identified to have the potential to impact financial inclusion through innovation in the mobile money sector. The prize? The 7 winning teams each won a cash prize of $5000 USD and continued support to enable the development of their solutions. As the competition strives to impact the financially excluded, it is imperative that the prototype solutions are developed, scaled, and released to market. Congratulations to the winning teams!

The winning teams are working on a variety of solutions. These include a transport e-ticket that enables transport operators to bank their daily earnings, an integrated financial management system that leverages open source financial inclusion technology (Mifos), existing mobile money platforms and billing platforms (Smart Bill) to bring access to financial services to less banked population groups, and mobilising mobile money merchants through mobile access. Other areas that are being pursued are location information for all financial service access points through mobile applications.

More than one solution aims to ensure those with disabilities, semi-literate and visually impaired also have access to financial systems. One includes an interactive voice response system and voice recognition into existing mobile money system to better cater for semi-literate, aged and the visually impaired, who also need access to financial services, whilst other solutions deliver a simpler and more convenient way to access mobile money services by providing a platform that can be queried without the user having access to a device.

Final thought: If anything, the 2018 Lesotho SIMM Project has shown that Lesotho has an abundance of human capital with the desire to impact the financial well-being of the Basotho people. However, these young innovators are desperate for opportunities to develop their skills and collaborate with key stakeholders to provide solutions aimed at advancing financial inclusion.

[1] “Lesotho MAP Synthesis Report”, FinMark Trust, June 2014

(http://www.finmark.org.za/lesotho-map-synthesis-report/)

 

For more information contact


Dumisani Dube
Head of Applications Lab, insight 2 impact
Email: dumi@i2ifacility.org
Tel: +27 (0) 11 315 9197