Monitise joins battle for East African m-banking customers, gets US$1.5m funding

Monitise joins battle for East African m-banking customers, gets US$1.5m funding

Monitise has been awarded US$1.5 million by the Africa Enterprise Challenge Fund (AECF) to help fund the launch of its mobile banking and payments service in East Africa.

East Africa has proved to be a desirable market for telcos, banks and mobile banking and payments software providers since Vodafone and Safaricom first launched the M-Pesa mobile payments service in Kenya in 2007.

Monitise itself first announced the formation of Monitise East Africa, a joint venture between itself and Made in Africa in May 2008. And this year has already seen a number of new government and private foundation funding programmes supporting m-banking in the region, as well as service launches from national and regional telcos (Zain, Rwandatel) and banks (Standard Chartered)

Monitise East Africa will initially offer services in Uganda and then plans to expand into neighbouring countries, including Burundi, Democratic Republic of Congo, Ethiopia, Kenya, Rwanda, Tanzania and Zambia. The service will enable the provision of banking, payment and money transfer services by both banks and mobile networks, within the regulatory framework of each market. 

The Africa Enterprise Challenge Fund is designed to fund business enterprises in Sub-Saharan Africa in the field of agriculture, agri-business, rural financial services and media and information services that will have a positive impact on the rural poor by delivering increased employment, reduced costs and improved productivity. It is funded by the UK Department for International Development (DFID), The Consultative Group to Assist the Poor (CGAP), the International Fund for Agricultural Development (IFAD) and the Netherlands Ministry of Foreign Affairs (NMFA).

Hugh Scott, director, Africa Enterprise Challenge Fund said: "By helping enterprises to build successful businesses in Africa, we believe that we can make market systems work better and generate wealth that benefits the entire society.  Through the extension of the reach of the banks and allowing people to save, make payments and transfer money to their families, we believe that Monitise East Africa has the potential to transform the economic outlook for literally millions of people.  I also firmly believe that in due course many of the people who use the service will, through the empowerment that a savings and payments culture delivers, become business people themselves, creating a truly sustainable economy."

The news coincides with a recent launch by the UK's Department for International Development of a £1.4 million fund to spur the development of biometric and mobile phone-based banking in emerging economies in Asia and Africa. The project entitled Facilitating Access to Financial Services through Technology (FAST) will explore the options for introducing 'branchless banking' in developing countries and look at how  technologies such as mobile phone banking can help the poor to access financial services.

International Development Secretary, Douglas Alexander, said of the launch of FAST: "A lack of access to finance in some parts of the developing world stifles entrepreneurship, stunts development and leaves people trapped in a poor, cash-only society.

"Advancements in technology and growth in mobile phone use is changing how we all live our lives and has the potential to give people access to financial services no matter where they live."

Alastair Lukies, chief executive, Monitise plc said: "Thanks to the support of AECF and DFID, we have an opportunity to transform the lives of millions of people in East Africa through the introduction of our proven service which brings together regulators, banks and mobile operators.

"There are some fantastic services available in the African market that are already transforming people's lives by allowing them to move money as and when they need to. Our platform, which is trusted by some of the world's leading banks and mobile networks as well as hundreds of thousands of consumers in the UK and North America, will help bridge the divide from payments to banking, by opening up a fuller range of services, such as deposits and savings in a genuinely mass-market, financially inclusive environment."

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