A call to South Africa’s masses
Wednesday, January 7, 2009
There is a faint air of the evangelical preacher about Brian Richardson, the 52-year-old chief executive and co-founder of Wizzit, a South African company that has become a pioneer in the business of mobile banking.
It is not just his austere uniform – smart black slacks and open-necked black shirt, its cuffs emblazoned with the company’s logo. As he explains his determination to challenge conventional banking prejudices and “bring affordable financial services to the mass market”, Mr Richardson is clearly an entrepreneur with a mission.
Once a marketing executive for the South African division of Barclays, he is sure that the “bureaucratic and process-driven style” of leading South African banks blinds them to a huge commercial opportunity: selling to the millions of black South Africans who 14 years after the end of apartheid remain rooted to the bottom of the country’s socioeconomic pyramid.
Conventional banks believe low-income groups offer too little in revenues to make it worth establishing branch networks. Yet Mr Richardson and his business partner Charles Rowlinson, a financial specialist, have focused instead on the way the poor are gradually entering consumer markets for the first time, a trend epitomised by the sharp take-up in the ownership of mobile phones.
Less than half of South Africans have bank accounts but nine out of 10 own a mobile phone, Mr Richardson says. “It is the fastest growing industry in Africa. The power that is embedded in a cell phone makes it an obvious choice as a channel to get to the market.”
Four years on, that insight has been converted into a business that is becoming viable. The company does not advertise the fact, but the industry reckons Wizzit has more than 250,000 customers, a handy foothold in a fiercely competitive market. Each pays a fee of just under R40 ($4.30) to open an account and a commission of a few rand on each transaction.
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