There are 3.5m mobile money clients using the MTN platform alone of the estimated 9m MTN customers in Uganda which doubles the number of bankable Ugandans who have bank accounts read those who have bank accounts and most are in active. Mobile money then accounts for a huge portion of the money transfers in the country even though on more than one occasion government officials have tried to downplay it. This success has armed ammunition to innovative people in the industry to innovate around the platform getting inspiration from neighboring countries bring home what they think works or the locals are missing out while other ideas have been built from scratch. Recently MTN one of the leading telecoms introduced a new service called Mokash that enables their users to get quick loans and save money directly on their phones. It’s not a new concept having been around in Kenya and Tanzania for a while as well as some South American countries.
To understand how mobile money works here is a crash course in the platform that has enabled many Africans skip one level of technology the credit card when it comes to electronic cash. Mobile money works on three tiers the user, MTN that act as the platform and a bank registered with Bank of Uganda that handles the actual cash itself. When your dial the USSD code provided by your service provider there is a sum that appear on your phone indicating how much electronic cash you have on your account. What is not known by many people is that this money is not sitting on the MTN platform or infrastructure but rather MTN is like a mobile automated teller machine simply giving you an interface to access your money that is sited somewhere in stanbic bank which is the backend bank provider of MTN. They are also charged with the task of increasing on the number of subscribers that normal bank ATMs can’t do.
By theory if you are a registered mobile money you are technically a Stanbic bank account holder and you could simply show up and read the teller your number to withdraw money since your phone number that is registered works as the account number and all transactions reflect on the ledgers of stanbic bank through the mtn mobile money platform. This set up enables such transactions to be monitored by bank of Uganda by filling the void of telecom turned banker but also enables them fit a financial institutions since MTN is a telecommunications company which is not supported by law and would be out of the jurisdiction of bank of Uganda. In essence MTN simply gets a cut of the money transferred just like any agent in the city doing commission work as agreed between the two parties.
From that small description therein lies the first problem, why hasn’t MTN informed their clients that their money is with stanbic bank because by law if accounts sit inactive for a while those deposits have to go somewhere after the financial institution has published a call to the public to come and collect their money by reactivating their accounts from dormant state. The only way this happens is if someone dies and I don’t know how many MTN subscribers have died and their money plus mobile money accounts have been left idle left at the mercy of stanbic bank who decide on how to use these funds for the next five years until the law instructs them transfer the money to Bank of Uganda. By the time the five years are done they would have made millions in profit over the backs of dead people.
What is not clear too is that if one dies how your next of kin get the money if it’s there how it can be processed since they don’t have my pin, don’t know how much is on that mobile money account. This is because both MTN and Stanbic bank have been silent on this issue never mentioning it anywhere in their advertising campaigns. Take the bank for instance, the law instructs that after 5 years there are rules that kick instructing stanbic to pass on the money to bank of Uganda. Although this is good how about the millions from all accounts of dead people that stanbic has used to mint even more money while the next of kin wallow away in poverty not knowing this money belongs to them.
Even if it was possible to claim this money of a dead relative from stanbic bank we suffer a problem of document keeping when reclaiming the money since they will require forms to show you are the next of kin to access this money. Anyone who has seen mobile money registration forms they are small pieces of paper that don’t even record your next of kin phone contacts. Plus it hard to tell how much your family member has since then MTN on its advertising campaigns advises people to secretly guard their accounts and pins hence even if he had money and died you would have no reference on how much was there account since these idle accounts are never published anywhere by MTN which is the interface we interact with. My advice to telecoms educate the clients on how they can get their money in case a person dies and you are the next of kin but also in the annual reports they publish they could highlight so people can started processing this money instead of letting it get passed to bank of Uganda that is silent about this money too.