London — TNM’s Passuvate service is offering short-term, micro loans – Airtime Advances – to a staggeringly large number of its users. The sheer scale of use indicates that users find this kind of service extremely useful. Russell Southwood spoke to Sean Pashley, Net1 Mobile Solutions whose Supa Pesa platform drives the service.
Sean Pashley is quick to make the point that this kind of service is not new. Indeed, there are two or three other big players in the market. So why did they launch the service?:”We noticed that other operators didn’t have a pre-vetting system. They simply offered the loan and this is obviously more risky.”
“We could pre-screen customers based on their behavior: what calls and SMS were made and received. On this basis, we could say only allow them to borrow a specific value. Others once they installed the service, left it to run by itself. There was no CRM. We think we’ve improved the back end business model. For example, we can identify that 80% of the loans are at one denomination level.”
Since its launch in mid March earlier this year, TNM has had more than 20 million air-time advances. Towards the end of September 200,000 TNM subscribers were using the Pasuvate service on a daily basis. This figure equates to almost 20% of the active user base utilising the service every day. The service is offered in both English & Chichewa ensuring that TNM subscribers can engage in their language of preference. Currently there is an average of 28 loans per user.
The service allows subscribers of TNM to purchase airtime in advance and pay the face value of the airtime voucher at a later stage. A subscriber can purchase one advance airtime voucher at a time and is charged a nominal service fee per airtime voucher purchased.
Pasavute is available via the USSD and SMS channels provided by TNM, and both channels are free to the customer. The TNM subscriber is only charged a service fee when an advance airtime voucher is purchased.
“We carry the costs of the hardware and there is a service charge, either as a percentage of the money loaned or as a flat fee to the operator. In Malawi, users pay 10% of the loan. So your loan is for 50 Kwachas and you get 45 Kwachas of airtime.”
“It allows people to get airtime at any time of the day. The level of trading after midnight is big. But the ‘umbrella ladies’ still get money because you top up in a conventional channel to pay back the money.”
So what happens if a customer doesn’t pay back the loan?:”There’s an agreed period with the operator. If he or she doesn’t pay back in 60 days, they are blacklisted from the Pasavute but they are not cut off completely from using the voice service.”
They are currently close to completing agreements in another seven territories:”Some of the more current deals are around a flat fee with a Service Level Agreement and no revenue share so things are evolving.”
Digital Content Africa: Balancing Act’s web TV channel Smart Monkey TV has launched a new e-letter called Digital Content Africa. On a fortnightly basis, it will cover online film, music, publishing and services and applications. We have already produced 20 issues and these can be viewed on this link:
Essential reading for those in mobile VAS to anyone just interested in what African and relevant international content they can now get online. If you would like to subscribe, just send an email to email@example.com with Digital Content Africa in the title line. Some examples of past issues below:
Digital Content Africa Z24: The South African TV announcer who runs a fashion blog from Moscow which she is going to turn into a business
Digital Content Africa Z19 – The Mobile Deal that is keeping Africans from having more music, film and TV on their mobiles
Digital Content Africa Z16 – MTN Play Côte d’Ivoire is looking for digital content that will play well on mobile phones