Question: What is MAP International doing in Africa?
Michael Landau: MAP International is currently building an electronic financial infrastructure program in partnership with the government of Uganda, whereby we are enabling the citizens who are previously unbankable because of their lack of identification. And we are incorporating the unbanked population by using our biometric systems and then integrating that information into a banking platform and producing ID cards and bank cards and enabling the previously unbanked to become part of a formal sector. And along with our relationship with the government, we are now building out a full banking infrastructure in the country, which includes mobile banking, Point-of-Sale machines, computer, online computer banking, and ATM machines, and creating a rather holistic integrated solution for the financial sector in Uganda.
Uganda is a country with 32 million people and counting, according to the statistics, which are very difficult to come by, good statistics in many of these developing countries. There’re some two million bank accounts in Uganda of which they don’t know how many unique users have those bank accounts. So assuming that there’re a 50 percent of unique users or even if you keep the two million less than 10 percent of people in Uganda, according to statistics that we have, have actual, have actual bank accounts and of those bank accounts, very few people have any form of electronic banking. So the majority, the vast majority of the 90 percent of the people don’t have bank accounts. The primary reason why they don’t have bank accounts is because the people don’t have a KYC identification, means Know Your Customer. They don’t have what President Museveni refers to as bankable identity.
Question: What is MAP’s role in Uganda?
Michael Landau: We started our initial discussions with the government of Uganda to try and analyze the problems and see, you know, if we’re be able to come up with some solutions for them some two and a half years ago. It took several, it took a fair amount of time until we were able to clearly define the concepts, cultivate the right relationships, close the agreements with the government to create, we’ve created a public private partnership with the government because the governments in many of these developing countries don’t have the sort of resources that are necessary, that are required to invest to create these sort of holistic solutions for the country.
So that all takes a fair amount of time until everything is put into place. We started our, we went live back in, I’ll say, October, November. And since then, we’ve enrolled close to 40,000 customers, you know, with, from the post bank into our system. We have ATM machines that are operational. Point-of-Sale machines are operational. A mobile banking platform is operational, we’re just not marketing yet at this point. So it’s, from a perspective of a deployment of a solution, it’s going extremely quickly from a developing world perspective, considering that two and a half years ago, I had barely visited Uganda once, we didn’t understand the problems, from a New York perspective of wanting things to happen tomorrow. You know, it’s going much slower than I would like it to go.
But, I think, from an overall perspective, it’s moving along extremely well. We’re coming across logistical issues, communication problems, which we overcome. We work with them. We understand the problems. We overcome the problems. And the fact that we are private sector and we’ve made a very significant investment of our own money into insuring that the system is going to work. And we’re not just taking grants from various entities. And if it works, it works. If it doesn’t, it doesn’t. We’ve invested a lot of money, of our own money. We’re going to make sure that things work and that they move along as fast a pace as possible. But there are challenges when you’re dealing in the developing world.
Question: How do you collaborate with the Ugandan government?
Michael Landau: It’s a very difficult regulatory environment when you’re dealing in banking and identifications, et cetera. So you need government support. But primarily, kind of what we’ve done with the government of Uganda is that we partnered with the post bank in Uganda. We have the, we have the exclusivity to operate the electronic financial infrastructure of that bank, which enables us to go ahead and, you know, make the investment to create a switch, which allows us to do ATM machines and Point-of-sale machines integrate the mobile banking, integrate the biometric identifications into the whole platform, which is very expensive. And now, we know that, for the course of the next X number of years, you know, could be, the customers are all going to be using our platform. So that’s the form of our agreement. And then, the agreement is going to, you know, kind of evolve to do kind of other payments and incorporate what they refer to as SACOS, which we would understand as credit unions in this country but when you have groups of 500 or 1,000, 5,000 people come together, currently, those SACOS savings and credit cooperative organizations. Those entities are not well-regulated to supervise in the country. It’s not a good environment for people to save because the money is not secured. The government can’t give any level of security. So parts of our understanding with the government is that our solution will be added, that we will be including the SACOS and providing a banking platform for those SACOS to be able to integrate into our overall platform, which will enable somebody from a SACOS to now have a government guaranteed savings account, that’ll enable somebody in a SACOS in a remote village to be able to save money and be able to go and travel from one place to another and have access to their money. They can use their card, their mobile phones, to be able to get access to their money even when they’re not in the village. Our system enables somebody in the city to transfer money out to the remote areas so they don’t need to travel with large wads of cash on them. It enables a teacher, who currently, you know, has to travel for two days to go to collect their cash. And if it’s a young lady, she collects a lot of, you know, 70 percent of what it is that she suppose to get because of the evolution of corruption and fraud that flows from the various cash distribution points until she gets it. Then, unfortunately, many of these people get abused at the last end of the mile. So that’s the person who’ll get our card. She’s got no real identification today. We give her an identification, we give her a bank account, and we give her the ability to, now, be paid on time, save her money, have the government guarantee her money, be able to use her cellular phone to transfer money to her friend or to her mother, wherever she may be, or to pay school fees for her kids so she doesn’t need to go for another day or two and then stand in line for a couple of days. These are experiences that people have in these developing countries.
Recorded on: May 15, 2009