16
vritti
January 2020
Adopt a Flexible
Approach to Customer
Registration and the
Know Your Customer
(KYC) Process
Mobilution
over the next few years. Blocking of the
mobile phone, in case of non-payment of
installments, can compel subscribers to pay
installations on time.
Many customers in rural areas do not possess
formal identification and KYC documents, thus
restricting access to mobile money services.
Regulators require adopting a flexible approach
to the KYC process for these consumers, to
accelerate growth of mobile money in rural
areas. Regulators ought to consider facilitating a
tiered KYC model, where users with none
and a limited number of KYC documents can
access mobile money services, but with lower
transaction limits. The tiered KYC model aptly
manages risk by balancing transaction limits
and availability of customer data.
Regulators should also consider permitting
alternative documents for registering rural
consumers without documents. These could
include a reference letter from the head of the
village or local employer, ration card, voter card
et al. For women without any identification
documents, their husband’s identification
document, along with proof of marriage can
be used. Regulator can permit mobile money
providers to run mass consumer registration
roadshows in small and remote villages under
regulatory supervision, where the head of the
village or regional representatives can be present
to identify villagers belonging to that area.
One third of the unbanked adult population,
including many in rural areas, especially women
do not own mobile phones. In such cases,
handset financing has come to the fore as a
viable solution. Mobile money providers can
provide a handset and SIM card to consumers
and register them for both, SIM and mobile
money service simultaneously. The subscribers
require paying a minor subscription fee and
can pay the remaining amount in installments
Focus on Expanding the
Rural Mobile Money Agent
Network and Making the
Business Viable
According to a World Bank report, the mobile
money agent network in Malawi is skewed
towards urban and semi-urban areas. 77 per cent
of mobile money agents are located in urban
and semi-urban areas, while only 33 per cent of
agents operate in rural areas [2]. This is similar to
many other countries. Clearly, mobile money
providers require more efforts in expanding the
mobile money agent network in rural areas.
Technology and data analytics can help in
intelligently extending the agent network in
rural areas. Mobile money providers can analyze
data pertaining to voice calls, mobile money
transactions, and the current location of agents,