Many have heard of M-PESA, the pioneering mobile money service from Kenya. Similar services are now impacting growing economies in Africa, helping to open up opportunities to deliver better financial services to millions of people.
That’s why we’re proud to support Outsource Monetic, 500 Global’s first investment in Francophone West Africa. Outsource is building the physical and digital infrastructure needed to create seamless connections between people and their money, which includes developing KaliSpot, an independent network of ATMs.
The Nuts & Bolts
Problem: Although cash transactions are disappearing in many places, Sub-Saharan Africa still plays an important role, including for disruptive services like mobile money. Cash remains a key on-and-off ramp for mobile money: out of $1 trillion in mobile money transactions in 2021, 42% of that was based on cash deposits or withdrawals. That creates issues, as handling these transactions accounts for a large chunk of operating costs (for instance, in 2016, mobile money providers reported that on average, 68% of their costs were operational expenditures). Operators rely heavily on field teams to recruit and retain customers, manage cash restocking, and handle cash-in and out transactions. That squeezes margins, and as more players enter the African mobile money market, incumbent operators are under increasing pressure to preserve those margins.
Alongside mobile money operators, the region’s fintech and incumbent financial institutions have personnel-heavy operating models. ATM infrastructure in Francophone Africa also tends to be antiquated, and machines generally offer the most basic service: cash withdrawal. Reach is an issue too, with average ATM penetration in French-speaking West African countries standing at 6 units per 100,000 inhabitants. That’s far below other markets, such as Nigeria, which has nearly three times as many units per 100,000 people.
Solution: Outsource provides banking-in-a-box solutions for mobile money operators, fintech and incumbent financial institutions in Francophone Africa to facilitate cash-in and cash-out transactions
and extend operating footprints without additional personnel. KaliSpot will offer a private network of automated and interactive teller machines built around brand-agnostic infrastructure and proprietary software, allowing mobile money users to access their cash 24/7.
Outsource’s solutions can also help other fintech and banks, with its platform offering each segment a cost-effective way to facilitate cash-based transactions while also introducing tools like contactless payments, biometric authentication and interactive customer service (through video chats and AI-powered bots). As it provides these players with solutions, Outsource is building the physical and digital infrastructure that will eventually allow it to evolve from an outsourcing partner into a neobank positioned to serve Francophone Africa.
Getting to know Outsource Monetic
At the helm is founder and CEO Mika Diol from Senegal, with 10 years of enterprise sales experience with Microsoft and Oracle. Mika is well connected within Francophone tech circles and is supported by a team with experience building hardware and software for ATMs. They understand the challenges their customers face.
At a time when countries in Francophone Africa are demonstrating a willingness to adopt new technologies, Outsource is positioned to ride a wave of growth in financial services. By 2021, over 60% of Africa’s fastest-growing economies will be in Francophone Africa, and mobile money adoption is only increasing in wake of the pandemic. Companies such as Kuda and Opay have already demonstrated that serving the underbanked is doable, yet overall penetration remains low in Francophone countries. Anglophone players can face difficulties crossing the French-English language barrier (not to mention different regulatory regimes).
The future of Outsource Monetic and tackling financial inclusion issues
Outsource is generating interest from various customers, including piloting KaliSpot in Senegal and the Ivory Coast. 500 is excited to support the company as it rolls out its ATMs and works to unlock the region’s vibrant fintech ecosystem.
You can learn more about Outsource Monetic at: https://www.outsource-monetic.com/
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