Expanding Access to Finance Through Mobile Payments: Lessons Learned for MFI-Mobile Network Operator Partnerships

This case study shares lessons learned from FINCA Tanzania’s partnership with Vodacom. It seeks to provide valuable information for MFIs seeking to create partnerships with mobile network operators to introduce digital finance for their customers. The partnership between FINCA and Vodacom allowed customers to use Vodacom’s mobile wallet platform, M-Pesa, to make transactions to FINCA accounts for both loan installments and savings. The arrangement also allowed FINCA customers to transact directly from their e-wallet, saving them significant travel and other transactional costs typical of microfinance operations. In one year of partnership, 28% of the total value of deposit and 34% of the total number of transactions were being remitted through M-PESA, and FINCA represented the fifth largest source of transactional volume for Vodacom in Tanzania. Some of the key lessons learned through this partnership include:

• Conduct an institutional assessment and sign a service level agreement before engaging in a partnership;
• Ensure business ownership of the delivery channel right from the start;
• Conduct a pilot before commercial launch;
• Do not force old manual microfinance processes into a modern electronic payment structure;
• Conduct continuous risk analysis;
• Include a customer awareness and education campaign;
• Change how institutions interact with customers as and when required.