Hello Paisa takes branchless banking to rural areas
BARDIA, APR 13 -
Krishna Prasad Bhattarai, a farmer in Thakurdwara, Bardia district, calls his daughter in Kathmandu on his cell phone and tells her that he has transferred Rs 15,000 to her bank account. Bhattarai, who earlier had to travel 25 km to Gulariya or Nepalgunj to make a financial transaction through his bank, now does it instantly.
He does it through Hello Paisa which he describes as a human ATM.
Bhattarai comes to Ramesh Kumar Chaudhari, a local shopkeeper and an agent of Hello Paisa appointed by Laxmi Bank in Thakurdwara. Chaudhari asks Bhattarai how much money he wants to transfer, and the two of them activate their Hello Paisa Mobile Account. “Your money has been transferred,” says Chaudhary after a minute.
“It’s very simple, the mobile number is the customer mobile bank account and it enables customers to make financial transactions anytime and anywhere at their own command,” said Chaudhari.
Chaudhary, who was appointed an agent seven months ago, said that he has been conducting financial transactions worth Rs 100,000 to Rs 200,000 daily and has more than 160 clients, particularly farmers groups.
The automated teller machine (ATM) or hole in the wall banking is limited to urban people. Installing ATMs in rural marketplaces is not viable, and banks and financial institutions (BFIs) are reluctant to open branches due to high operating costs and risks.
Bhattarai said that before Hello Paisa, he used to travel to his bank branch in Nepalgunj or Gulariya. “The system has saved my time and also eliminated the risk of carrying money in my pocket to deposit in the bank,” he said. “Not only me, many people here have benefited from this prompt financial service.”
The bank system allows agents to do transactions on the basis of their deposit amount. For example, Chaudhary has put Rs 500,000 deposit amount in the bank, and he is entitled to conduct financial transactions up to the same amount.
Hello Paisa is based on appointing an agent, particularly a “well-known” figure who runs stores and other shops in the locality. The agent accepts deposits and provides money withdrawal services through a bank managed Hello Paisa Mobile Account.
Customers who are clients of the banks operating the system are given a security PIN of the Hello Paisa Account, and they can make transactions through the agent. The bank provides its agents a simple technology device or phone through which they can connect directly to the bank using a mobile phone in order to verify customer ID and record transactions.
The customer’s money is never technically at the agent because they are only the medium to collect money from the people, and in return they get a small commission. To use this service, both the sender and the receiver have to be registered Hello Paisa mobile account users, and both parties must have bank accounts which are in the Hello Paisa system.
Laxmi Bank, Bank of Kathmandu, Siddhartha Bank, Commerz and Trust Bank and International Leasing and Finance Company are currently providing the Hello Paisa service through Finaccess, a common platform provider of the service. All these BFIs have their particular networking, but are connected to a common brand Hello Paisa.
“Although Laxmi Bank introduced mobile banking named Mobile Money in 2009, it was not successful due to its limited number of customers,” said Nikesh Ghimire, manager of Laxmi Bank. Laxmi piloted mobile banking facility in Sindhupalchok district in 2012 and increased its penetration to seven districts in the same year.
“Now, we provide the service in 26 districts and have planned to add four more districts by April. We have around 200 agents serving 5,200 customers,” said Ghimire.
Low-income and rural populations are a huge and untapped market, and they are yet to be banked. Statistics show that just 25 percent of the Nepali population has bank accounts. In contrast, over 70 percent of the population owns mobile phones.
“Today, 70 percent of the Nepalis have mobile phones, and mobile banking is the best way to reach people at a much lower cost as running a bank branch in rural areas is an expensive business,” said Phillip C Broughton, chief of party of Nepal Economic, Agriculture and Trade (NEAT) Activity, a United States Agency for International Development (USAID) funded contract that is being implemented by Chemonics.
“Although the system is in its infancy, its penetration will gradually increase in rural areas because it is the best financial access to create financial inclusion for all. Particularly farmers who are unbanked will be benefited.”
In June last year, USAID Nepal organized a two-day meeting to discuss opportunities to overcome the challenges of implementing mobile financial services in the country.
Source: The Kathmandu Post
