IFC boost for cellphone banking
22 November 2007
The International Finance Corporation (IFC) has taken up a 10% stake in Johannesburg-based Wizzit Bank, which enables its customers to operate bank accounts using cellular phones, extending banking services to low-income earners as well as customers in rural areas.
Wizzit, a division of the South African Bank of Athens, will use the funds raised to expand their cellular banking services, first in South Africa and eventually in other countries, enabling more people to participate actively in the economy.
"Wizzit is a small bank with large ambitions," Wizzit chairman Charles Rowlinson said in an IFC statement released on Wednesday, "We are proud that the IFC recognises our potential to reach the unbanked, promoting greater access to financial services and offering the poor greater opportunities."
The IFC is a member of the World Bank Group and promotes sustainable economic growth in developing countries by financing private sector investment and providing advisory services to businesses and governments.
It will help Wizzit expand operations, determine new markets for its services, and develop penetration strategies, including identifying local partners.
"Access to financial services is costly and limited in Africa, particularly in rural areas," the IFC said. "Much of the population operates on a cash-only basis and outside of the formal banking system, even in a country like South Africa, which has a relatively sophisticated financial sector."
According to the statement, it is estimated that 40% of South Africa's 47-million people have little or no access to formal banking. However, nearly 60% of South Africans do have cellular phones and this has created an opportunity to provide social and financial services over mobile networks.
Wizzit Bank has capitalised on this opportunity, and now employs nearly 2 000 previously unemployed people, known as Wizz-kids, who have the good local knowledge and contacts that the company needs to market services directly to potential clients in neighbourhoods across the country.
"Helping the financial sector become more inclusive by extending bank services to the poor is an important part of IFC's strategy to strengthen Africa's private sector," said IFC chief executive Lars Thunell.
"Wizzit's innovative technology and marketing strategy are already having a strong impact by helping create opportunity for more South Africans."
A video on Wizzit is available on Youtube