According to World Bank Findex Report 2018 only 35 percent of Ethiopians have an account at a financial institution. This figure is even smaller for young adults ages 15-24 (28 percent) and the poorest 40 percent of Ethiopians. The top reasons why people don’t have a bank account are because the financial institution is too far away (20 percent), and lack of sufficient funds to open an account, to accomplish this mobile money providers have a defining role to work on financial inclusion.
Mark Duffy is CEO of MOSS powering, which is the technology provider of M-birr.
Mark has over 30 years of experience in international financial services. He previously led the rescue and turn around creating Ireland’s first new bank in a generation. He was also Chairman of the group’s global Fintech group focused on applying new technologies to gain a competitive advantage.
Capital met with Mark, to talk about on the Fintech as part of financial inclusion and his company MOSS.
Capital: Tell us about MOSS?
Mark Duffy: MOSS is not a financial institution we are a company that provides financial institutions with the technology, skills and sometimes training to do so, we are enabling MFI’s to do this their own networks jointly or individually, with six MFI’s We distribute the social PSMP.
Capital: How do you evaluate your journey so far as you enter Ethiopia to provide the technology for mobile money?
Mark Duffy: It is most interesting and a very positive connotation because of political changes and growth in the economy, Ethiopia is on the march but MOSS is not on the march. I see Ethiopia is the second biggest country in Africa, the economy is booming the population has a desire to move on and capitalize on the positive macro-economic changes for, a business person experienced in the banking industry for several years and the MOSS professional CEO, personally, aspiring to make the industry to push in to the next stage. For the over the next three of five years we hope we build on the success and made a bigger contribution for Ethiopian society.
Capital: What has MOSS contributed to Fintech in Ethiopia so far?
Mark Duffy: I think the unique contribution about MOSS is we are ready to go to the next stage making investment in people and new technology now we got that stage and we need put that investment to wrap up to grow the business to un leash that potential MOSS contribution for Ethiopia is, MOSS is the first Mobile money provider, the second thing is it has a unique focus that has been working mainly in rural Ethiopia, when you are looking at expanding the banking community and expanding in general, we are looking our competitors which is very important for the industry to succeed, others are hugely concentrated in urban areas which is easy to do business but, we chose to work on 80-85 percent of the population of Ethiopia live and work, in a countryside because I know what rural society works as I was from the rural part of my little Ireland and farmers all over the world are more or less the same. Moss is the biggest in rural Ethiopia in providing Mobile money service through six MFI’S which is a huge contribution. It is not much easier to do business in rural areas. It is a lot easier in cities, so our plan is to be a key player in those areas. We have more than 1.5 million registered customers we have over 12 thousand branches, agents through MFI’S network to work with so the main difference between MOSS and other competitors, we are rural focused What we look is to expand our network and grow our huge presence through MFI’S that helps to balance the rural and urban Ethiopians.
Capital: Moss is working with six MFI’s is there any plan to scale up to the other MFI’S because there are nearly 40 MFI’s now?
Mark Duffy: Yes, what we need is to decide to do this, we arrived with a suitcase-an idea with private technology so we moved from that beach land in to the grass and established a business to do, and now we move on to the grass, for the last few years we have developed a good relationship with NBE and other government organs, we have the technology. First, we invested in the people to bring us to the next chapter of development, to build business in rural Ethiopia, deliver more balance by getting more, customers to do in JV in MFI’S and another financial institutions to be at the back to enable them to do business efficiently and help to expand their customer base. In the next three to five years, we hope it multiplies our customers as we back MFI’S to do so.
Capital: Have you received any governmental support in your effort to create fintech?
Mark Duffy: Yes, we have huge support from the Prime Minister’s Office, in financial inclusion as there is the possibility to combat corruption, particularly in deliberate solutions in the areas it is extremely difficult for regulators. I have worked in the public service and I have worked with them together not in dispute or as an enemy and delivered regulators all over the world to tackle the enormous challenge.
Capital: What are the challenges and opportunities for Fintech in Ethiopia?
Mark Deffy: Increase the mobile telephone penetration.
Mobile technology is very important, additional operators in telecom opens to door to enable more people to have a telephone hopefully more people will use mobile money. I will persuade them to Use MOSS tech services like M-Birr ,I think the biggest challenges are 70 percent of the population is un banked ,that is an opportunity and challenge and the MFI’S learn new skills, just like the National Bank of Ethiopia there are challenges that they work with stake holders to get over all those challenges in my view 70 percent of an unbanked society is the most amazing opportunity. That is why you have five credible competitors, that the bank use mobile money ,it is the quickest way to bank and reduce the unbanked societies in relation to financial inclusion and useing mobile money is not only for financial inclusion and I think it is an accepted fact in economics the greater the financial inclusion, the grater the wealth. There are big challenges like structural challenges lot of things going on. Ethiopia’s adoption of technology really surprised me and that is a tremendous opportunity.
Capital: What do think the government can do to improve infrastructure or legal frameworks to facilitate a cashless society?
Mark Duffy: My experience working for 7 international markets shows that in banking industry needs clear polices in order to motivate local business regulators (NBE) in this case I found complete absence in Ethiopia changing polices. The pro fin-tech, the pro mobile money, and they have been a huge help for the national bank which is learning new technology to allow us to advance our business. This is one of the key reasons because of easy access to pro fin-tech mobile money. We have to help each other because it is a new learning experience, as these are new concepts in which the government has to make sure about digital inclusion. The regulator is there, for us these are fantastically opened and make progress. If I was the Prime Minister of Ethiopia, or the governor of NBE, I could get four of five players, and these players would bring more advanced technology and transfer the technology to Ethiopian companies those companies who are running the majority of the profit in the transaction and Ethiopians are up to scale in managing those companies and having such enormous effect in banking rural Ethiopia, existing players don’t and it doesn’t cost Ethiopia hugely. So it’s a positive reaction. Breathe the fresh air I have to say.
Capital; Ethiopia will have additional telecom operators in the near future, how will it affect FinTech?
Mark Duffy: It is great news to have more than two potential telecom operators. It means there are competitors to deliver affordable and quality service. Each of them will take the ethio telecom already announced to begin Mobile money components, why do they do this? Because they have Mobil coverage, technology, business and know how, that it is very natural very natural to increase the government values that benefits every Ethiopian. This means Moss is the first and leading provider of mobile money and it means opportunities for to picking up one of the three operators in the box which benefits more Ethiopians to have more telephones, which means Mobil money operators will work on it, as it is the quickest way to an unbanked the society that is why I said it is good news not only for the companies but also for the country as a whole. MOSS hopes to play a small role.