When I began my three-year stint as a financial consultant at a U.S. hospital, my boss told me that I could learn everything I needed to know about business by watching The Godfather. Much to my delight the movie was heavily quoted in our office, especially the line: “It’s not personal, it’s just business.”
I often joked that my job was a ‘necessary evil’, in that I sometimes had to suggest that the hospital turn down new programs, tests or procedures simply because they weren’t cost effective. I wasn’t hired to analyze what was best for the patients, I was hired to view the hospital as a highly sophisticated business; in doing so, I believed my department was making the hospital financially sustainable and ensuring that it could continue to provide the life-saving services people needed for the long term. As my boss would often say, our work ‘wasn’t personal, just business’.
When I left hospital finance to begin my master’s studies in Africa and International Development, I thought I was permanently exchanging suits, ties, and boardroom meetings for flip flops, mosquito nets and focus groups. In my mind development wasn’t fueled by profits and return on investment, but by philanthropy and people who bought TOMS shoes. At Edinburgh I began to learn about the richness and diversity of the development field, and I was intrigued by discussions about aid (in)effectiveness and the inability of many organizations to remain financially sustainable. I read books and listened to lectures from Africans suggesting that the continent didn’t need more donors, it needed more business. More business? Don’t mind if I do! Ready and willing to dive back into the world of finance, I began to investigate the banking sector and current debates surrounding financial inclusion. In an environment where microfinance organizations routinely fail or are designed to scam locals out of their money, sustainable and transparent banking services are especially in demand. I liked the idea that banks were investigating ways to provide services for low-income customers, but I also respected the fact that they would only do so when it made sense financially. In Africa, there is also a place for “It’s not personal, it’s just business.”
Today I am continuing to investigate and learn about banking and financial inclusion as a volunteer with the Grameen Foundation’s AppLab and Bankers Without Borders in Kampala, Uganda. Since arriving several weeks ago I’ve had the opportunity to work closely with Uganda’s largest mobile phone operator, MTN, and learn about their mobile money service. Through a number of interviews, readings and observations I’m beginning to understand how the ability to save and transfer money through a phone influences the way people manage their incomes, as well as their interest in using commercial banks. I’ve also been tasked with mapping out the process through which customers register for mobile money and I’ve provided MTN with recommendations as to how it can be improved. A more efficient registration process will mean higher profits for MTN, but also happier customers with quicker access to a secure way of saving and transferring their money.
Extending my research to the western, rural part of the country has helped me reconsider ideas about the superiority of formal banks as a savings mechanism. For many of the people living outside of main towns, the monthly maintenance fees and travel expenses associated with using a bank make it almost nonsensical to put their small deposits into an account. Why would I deposit 50,000 shillings into a bank each month if it costs 12,000 to travel there and I’ll be charged another 5,000 in fees? A local farmer actually convinced me that it was more cost effective to invest his money in a cow.
Even so, there is a noticeable appetite for financial services among the rural poor, and the banks that want to remain competitive will have to find profitable ways to serve this demographic. Before I leave, I hope to talk with multiple bank representatives to find out how they are doing this, whether it is through mobile banking, banking vans, Internet banking, or other means. I’m excited to see – and in a small way be part of – the impact these businesses are having on the lives of their customers, communities, and the nation as a whole.
Matt Wilson, MSc student from Kampala
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