What next after Mobile Money?


Telecom companies have been on the fore-front of a socio-economic revolution happening in Africa with mobile money allowing unbanked Africans to participate in the banking system.

An interesting case study is the M-PESA payment system.

Safaricom first launched M-PESA in Kenya in 2007 and other operators in East Africa such as Telkom Kenya and Essar Telecoms
have also introduced mobile money services such as ZAP and Yu-cash. In Francophone West Africa, Sonatel has also introduced Orange Money.
Zimbabwe’s Econet Wireless has made progress with its Eco-Cash offering.

In Zambia,mobile wallets such as Airtel Money are also gaining some traction. These developments are part of a trend by most telcos in SSA to focus more on Fintech and Value-Added Services (VAS), not only as a strategy of diversifying income streams but also as a way of ensuring the stickiness of subscribers.

Given that telcos are active in the technology space where innovations and changes are happening at a very fast pace, the big question is; what next
after mobile money? Our view is that micro-insurance
is a relevant offering in the African mass market given the
various risks that households are exposed to such as threat of diseases, accidents, and disability.

However, the major task for micro insurers is
to offer more efficient risk mitigation tools which are simple, accessible, valuable, and reliable. Telcos can act primarily as aggregators and
distribution channels that are also responsible for the marketing and promotion of insurance offerings. The infographic below illustrates
some of the advantages for telcos to offer insurance products.

Econet Wireless Zimbabwe has been very aggressive in
terms of developing relevant products for its market in Zimbabwe. The telco has launched Ecosure, which is a convenient, subscriptionbased, mobile insurance product with a mass-market appeal. This also includes
EcoSure Funeral Cover which enables all Econet customers to access the most affordable funeral cover in Zimbabwe on their mobile phones.

Econet also intends to introduce auto-insurance and education insurance, both of which are expected to trigger high take-up from our customers as they will provide valuable new services into market. At a share price is at 325c (market cap of ZWL$8.4bn), there is a significant opportunity
for investors to take positions in Econet given the telco’s dominant market share and leadership in fintech.

Author – Batanai Matsika
Head of Research – Morgan & Co
+263 78 358 4745

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