In September 2017, FINCA Tanzania became the first microfinance institution in Africa to launch a mobile network operator-led savings product. This offering, called HaloYako, reached 100,000 users in just three months, and customer deposits and withdrawals continue to increase. Partnerships with Mastercard Foundation, Mercy Corps AgriFin and Halotel mobile telecommunications have been key to launching this product.
While HaloYako is still in its initial phase, this new mobile savings product has revealed six important lessons:
1. Choose your mobile network operator partner carefully.
FINCA Tanzania’s goal is to be the number one financial services provider for low-income customers and to reach out to rural communities. Halotel, a relatively new player in Tanzania’s mobile communications market, sought to expand its telecommunications network in underserved rural communities. It was also willing to innovate and invest in marketing. Compatible priorities and vision alignment indicated this would be a good match to build a strong relationship.
2. Use human-centered product design.
FINCA undertook a human-centered design approach to develop the savings product. FINCA Tanzania partnered with the consulting firm PHB Development to discover what drives adoption and usage in different market segments. The research provided plenty of client insights that were used to refine the product.
For example, the HaloYako product allows customers to save towards a goal, but the original design did not prompt users to make regular deposits. During testing, customers indicated that an auto-savings feature with an SMS reminder would make saving even easier. If a customer forgot to deposit money, the system would remind them to do so.
FINCA has also been testing the use of SMS reminders to increase activations. The spikes on the graph below shows how usage increased in the days immediately after clients receive reminders to save.
During the test period, users also clearly indicated that they wanted more personalized messages. This would foster a stronger connection to FINCA. For example, “Dear Musa, thank you for continuously saving towards your goal. You are now at 80% of your goal. Keep saving,” was preferable to the more generic message, “Thank you for saving towards your goal. Keep saving.”
Results also showed that traditional outreach, publicity and promotion—such as radio announcements and product ambassadors—could help drive adoption and usage. Clients also said they would appreciate incentives and airtime rewards for recommending the product to friends and family members.
3. Combine above-the-line and below-the-line marketing to drive adoption and use.
The CGAP 2016 National Household and Segmentation Survey found that 76 percent of smallholder families were aware of mobile money. But awareness does not always translate into adoption and usage. Nor does it mean that people understand how to use mobile technology. FINCA sought to adopt communication mechanisms that would educate customers and drive regular use of the HaloYako product.
Billboards, radio and TV advertising were used to drive product awareness and education. Below-the-line approaches—such as sales drives, road shows and one-on-one customer engagements—helped drive customer enrollment and increased knowledge, translating into stronger product use.
4. A savings program creates a good pathway to mobile credit.
A savings program is an opportunity to build relationships and learn more about your customers before introducing them to credit products. By starting with mobile savings, FINCA builds customers’ trust and confidence in using mobile technology. Thereafter, we can introduce mobile credit, strengthening our business relationship with them.
FINCA also benefits from this strategy. Without a savings program, FINCA would need to borrow capital at a higher rate. A mobile savings product lowers the cost of credit, reduces operational risks, and makes the business case work.
5. Choice of technology is important.
Choosing the right technology platform for a mobile savings product is essential. FINCA Tanzania evaluated several platforms and ultimately chose the vendor who supplies its core banking system. That vendor was able to adapt quickly, allowing FINCA Tanzania to launch the product in two months. A new vendor would likely have cost more in both time and money. Working with a company who understands your processes will help you to get up to speed quickly.
6. Organizational changes are necessary.
FINCA has added specialized staff dedicated to developing new products, new partnerships and overseeing product growth. FINCA Tanzania’s IT and business teams are growing as the mobile savings product expands.
Implementing a mobile savings program has it challenges, but the customer benefits are clear. Savings products give low-income clients a mechanism for planning for their futures, tracking their progress and achieving their goals. These might include funding a child’s education, paying for medical expenses or having a cushion from unexpected financial shocks. Because the savings product is mobile phone-based, it helps FINCA reach deeper into rural areas and serve those who need it most.
With over 100,000 customers, the HaloYako savings product is helping FINCA Tanzania pursue its mission to become Tanzania’s leading financial service provider for low-income customers.