Interview: MoMo's plan to win over boda riders, small traders
In an interview with New Vision, Phrase Lubega lays out where the real work begins: building trust customers can bank on, using AI to widen access to credit, and forging the local partnerships that will decide what mobile money becomes over the next four years.
Phrase Lubega, the MTN Mobile Money Uganda Limited Managing Director. (Courtesy photo)
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Mobile money has become part of daily life for millions of Ugandans, but MTN Mobile Money's new managing director, Phrase Lubega, says access is no longer the hard part.
In an interview with New Vision, he lays out where the real work begins: building trust customers can bank on, using AI to widen access to credit, and forging the local partnerships that will decide what mobile money becomes over the next four years.
Lubega took over from Sarah Bateta Okwi, who had managed the transition after the departure of former MD Richard Yego.
You are stepping into this role at an exciting time for digital finance in Uganda. What is the one priority that will guide your leadership over the next few years?
I'm happy to be here at this point in time. I know mobile money and fintech in Uganda has advanced to a level where we now need to enhance the value that we're creating for the customer. While using our services, our customers need to ensure that our services are trusted, reliable, and their funds that they put into our ecosystem are available whenever they need the funds.
So the one priority that we'll have to work on is to ensure that we create an ecosystem built on trust that is reliable to the customer, that serves them whenever the customer needs them. And as we enhance the services and features available to the customer, this reliability is dependable for the customer, whether it's a consumer, merchant, or business partner that we're working with, their services are all reliable. So that's one key area that we'll focus on to ensure that our customers find the services reliable.
Secondly, as we build this trust, there are a number of elements that we have to work on. We have a regulator. That regulator has expectations on how we must and should serve our customers.
Therefore, whatever we build, we have to have that in our building process, and in our ideation-to-actualisation process, ensuring that we are prudent in our decision-making. And in ensuring that our governance framework underpinning services is the right one. As we innovate, we don't introduce loopholes and areas which can be exploited, but we deliver services that our customers are going to rely on, knowing they're not being exposed. You'd appreciate that the majority of our customers are being financially included for the first time, or accessing digital financial services, many of these for the first time.
We give access to customers by registering them onto our ecosystem. We count numbers — we've just released our results for half of this year, at 14.8 million active wallets, or customers, that we have. Beyond those wallets, the priority needs to actually move from giving them access to creating value for this customer.
When you get your funds into the ecosystem, what can you do with those funds? Can you save? And what benefit can you take out of your savings? Can we create history that you are able to access credit? Because many of our customers, whether it's a consumer, merchant, or SME out there, they might not have the right history to gain access to credit, to expand their businesses and their lifestyles.
What we're doing is enhancing their ability to have the right credit history so that they can have this ability to access credit whenever they need it. When we have partners that we deliver services with, we have to ensure that these services are reliable. And whenever the customer needs access to these services, they are going to be available.
So if we then create partnerships and work with the most reliable partners who deliver these services, we are creating the next level of access to digital financial services, which our customers are going to enjoy. And hence, the value that we deliver to our customer, to enhance and digitize further their transactions. So that is, I believe, where the growth is going to be coming from.
When you think about the small trader, the boda rider, or the market vendor, what would make digital payments become their first choice rather than cash?
Cash today is very simple to use. But beyond just holding the note, it doesn't create extra value for whoever is holding that note. Let me begin with boda bodas. What we seek to do is create an environment, an ecosystem, where every user of digital financial services, once they digitize away from cash, enhances their usage and value compared to if they had not used that digital financial services.
So for the boda boda person, how do they, first of all, receive those payments? We need to make it very convenient, very easy for the boda boda person to receive those payments.
You spoke about credit and I would like to pick up the conversation. We know that MTN has become a very reliable credit facilitator for many people, especially in the informal sector. But the question we are posing to you is: how do you plan on balancing that credit, which is ever-growing, while encouraging responsible usage of it?
We intend to, and we're actually using artificial intelligence to enhance, first of all, determining what our customers, our merchants, and all partners that come to access credit through us should actually get not just by determining how much credit we must afford them, but by using data and insights to determine who we can actually enhance and build value for, and hence what value, or what amount, of credit.
So credit is one element that, if you look at the statistics in Uganda, SMEs need to enhance and build their businesses. But unfortunately, it hasn't been that accessible to the majority of our consumers, as well as SMEs, in Uganda. So as we build this history, we're enabling bank partners to come and give appropriate support for businesses to grow, and appropriate support for businesses to enhance their capabilities. That's the first one.
Secondly, many of our customers come and borrow, and the element of responsible borrowing is quite important — the commitment to know that when you take credit, you've agreed to pay within certain parameters, and ensuring that you pay back by that time to enhance or increase the amount of credit that you can gain access to. There are times when you're certainly going to be in situations where you can't pay back on time, but make an effort, as a customer, as a consumer, as an SME, to ensure that your credit access is not impeded by the behaviours that we see in some of the transactions that you do.
Partnerships are becoming increasingly important in the digital economy. What kinds of partnerships will matter most for the next phase of MTN MoMo’s growth?
That's a very important question, because mobile money, and what we are as MTN, will actually create our environment, or ecosystem, based on partnerships.
We've enabled banks to gain access to, and create an environment where, customers can actually gain access to banking services. These are very strong partnerships that we will continue leveraging and enhancing, to ensure that banks can easily, without the difficulty of having to open a branch, gain access to so many more customers and deliver their services to these customers.
Then secondly, we have partners that we work with, like integrators, that go and understand other people's systems, integrate them, and deliver services to our customers. You go to a supermarket, for example, you're making a payment, they're using their own system. The supermarket doesn't have to change their system, but we can have an integration in between us and that partner to ensure that the service is intuitively delivered for the customer conveniently, who is making a payment using mobile money as a mode of payment.
We intend to continue to build, most importantly, local integrators and local aggregators, because a lot still has to be done when it comes to agriculture, for example. So we'll need partnerships to go and understand how the markets look, and provide the best solutions for our customers to come and enjoy seamless services on our ecosystem. Then the third one is security. We have to ensure that we enhance our security on the ecosystem. As we do all the integrations and work with all the partners that we're working with, we ensure that we've created a very reliable layer that serves all the partnerships that we have.