Consumer Education and Mobile Money Adoption

18 January 2013

Last April, I traveled to Lusaka, Zambia to test our educational booklet on mobile money for microfinance clients with our partner Mobile Transactions and the microfinance institution (MFI) Vision Fund. The booklet went over well with loan customers, but a real challenge, Vision Fund told me, was how loan customers used their cell phones. These customers weren't receiving the cell phone alerts about their loan disbursement because they swapped out their SIM cards after collecting their initial loan.  As a result, Vision Fund could not always reach their customers because their cell phone information kept changing. 

Why do customers change their SIM cards?  We identified that some clients, particularly in rural areas, use mobile phones for the sole purpose of being able to collect their loan money.  Once they receive the SMS notification and collect their loan money, their SIM card is inactive for the duration of their loan cycle.  Four months later when it is time for their next group loan, customers have to either:  reactivate the SIM card or buy a new one.  Since reactivation is expensive and complicated, most customers  opt for a new SIM card, which results in late or misdirected SMSs when the customers don’t update their phone number with Vision Fund.

Consumer education has the following key roles:

  • First, it can give customers the key information they need to avoid or manage a potential headache:  “Call your credit officer after you make a loan payment which keeps your SIM card active. If you do change your phone number, tell your credit officer immediately so it can be updated in the system before your next loan disbursement.”Second, consumer education gives the institution the information they need to address customer challenges.  It helps answer the question why people do or don't use mobile money.  By mapping transaction procedures and “kicking the tires” from a client’s perspective, consumer education can pinpoint where customer headaches can occur.  For example, how long does it take to update customer contact information in the mobile money system? Who and what steps are involved? Can the processing time be reduced to avoid late SMS alerts?  
  • Consumer education can also help institutions standardize operational procedures to improve customer service and increase consumer protection.  Consumer education materials document in a systematic way how transactional procedures should be, so both agents and customers know what to expect during a transaction and are on equal footing.   
  • Agents, who received training primarily on back-office systems, can also gain a keener awareness of the low-income consumer’s viewpoint and the challenges they face.  Training in consumer education gives agents the knowledge and the tools to communicate more effectively with customers, leading to better customer service.  The consumer education materials support the delivery of consistent and accurate messages throughout the institution’s network of agents.  
  • Finally, consumer education can help ease the transition from cash to mobile money by identifying the benefits that people value from cash-based systems and considering how mobile money can step in.  For example, in Zambia, a feature could be added to the provider’s SMS loan notification system that could preserve a much-valued advantage of the former cash-based loan system:  immediate notification to a credit officer when their clients make a loan payment at the agent.  An automatic SMS alert would keep credit officers informed in real time-- like they used to be when they were collecting the loan payments themselves during loan group meetings.   Such a feature could create a stronger buy-in from credit officers who might otherwise be skeptical of the mobile money platform and reluctant to promote it with their clients. 

Consumer education adds value not only for clients, but also for mobile money providers and for their financial institution partners.  It shines a light on client behaviors and challenges, and identifies ways to address them: either through information to the consumer, or by helping providers to look inwardly for solutions. 

The result?  An improved consumer experience that can lead to greater uptake and use of mobile money products.  

------This program is being implemented in partnership with The MasterCard Foundation. For more information about Microfinance Opportunities’ work in consumer education on mobile money, please visit us at or contact us at [email protected].

Photo courtesy of MFO 

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