Zambia and the Smartphone Factory, Mumbuca Bank leads innovation, Nigeria's e-commerce built on Mistrust and Discounts and Rampant Financial fraud

?? Here is my weekly wrap [November 25th]

1. ?? Zambia and the Smartphone Factory
2. ?? Mumbuca Bank leads innovation on basic income programs
3. ?? Nigeria's e-commerce industry built on mistrust and discounts?
4. ?? Inside Nigeria's battle against rampant financial fraud

1. ?????? #Zambia paving the way for Industrialization with Smartphone Factory, data centres and no tax on telecom equipment

The factory aims to reduce costs and increase connectivity, particularly for #fintech startups. Currently, only 10% of Zambians use mobile money or online services for payments and purchases. The government also plans to construct over 100 community digital centres to further boost connectivity. The government announced zero-rated imports of telecom equipment, including smartphones, to encourage investment in the ICT sector. The average cost of smartphones in Zambia is between $114 and $182, while the average salary ranges from $45 to $137.

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• Zambia plans to open a smartphone factory by June 2024 to reduce the cost of smartphones and increase connectivity, particularly for fintech services.
• The low access to financial institution accounts and mobile money in Zambia highlights the need for increased connectivity through affordable smartphones.
• The government's initiative to zero-rate imports of smartphones and other telecoms equipment aims to attract investment and stimulate job creation in the country's ICT sector.

2. ?????? Mumbuca Bank in #brasil and the role of a municipal community banks on basic income programs

The city of Maricá in Brazil has implemented a community-based fintech model to address poverty and promote sustainable development. Through the municipality's basic income program, a quarter of the city's residents receive a monthly stipend in the form of a digital currency called mumbucas.

The mumbuca currency is accepted by local businesses and retailers within Maricá and can be used to pay for a range of services. However, it holds no value outside the town's borders. This ensures that the stipends paid by the municipality are spent locally, promoting local economic and social development.

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• The Maricá Model in Brazil showcases a community-based fintech approach that prioritizes addressing poverty and promoting sustainable local development instead of generating profits for private investors.
• The use of the digital currency mumbuca in Maricá has successfully supported local businesses, prevented job cuts, and sustained the local economy during the COVID-19 pandemic.
• A 2% fee is added to any business transaction in mumbuca, which the Mumbuca Bank uses to support its social activities and provide affordable loan programs. Business owners are allowed to exchange mumbuca for Brazilian reals by paying a 1% transaction fee and adhering to a waiting period.
• The Maricá Model demonstrates the potential of grassroots fintech initiatives to promote the common good, alleviate poverty, and enhance democratic participation in economic life.

Thanks for this shout-out. The Marica Model is indeed very interesting - a community-owned development-driven fintech platform that means not having to rely on #Visa or #Mastercard to facilitate local digital financial transactions can only be for the good! - Milford Bateman

3. ?? ???? Is Nigeria's e-commerce industry built on mistrust and discounts?

Jordan Ajibola of Shipbubble and Chikodi Ukaiwe, CEO of Salad Africa (Techstars '22), released a great podcast this week delving into current trends, obstacles, and prospects in commerce and beyond.Chikodi emphasises the importance of building trust and understanding the needs of Nigerian buyers in order to succeed in the e-commerce market beyond offering discounts to attract customers and focusing on understanding user needs and building around them.This shift has led to the success of Instagram and TikTok vendors and a more personalised approach to e-commerce in Nigeria.

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• Early e-commerce platforms in Nigeria made a mistake by associating e-commerce with discounts, which created mistrust and affected the sector's growth.
• Nigerian buyers prefer a concierge-style shopping experience, which has led to the growth of Instagram vendors who offer personalised interactions before purchase.
• The e-commerce ecosystem in Nigeria has evolved to focus on understanding and building around user preferences, leading to successful ventures in the sector.

?? Tracey Turner shared an interesting insight this week about Copia Global ability to build a network of over 50,000 agents and 3 million customers while focusing on profitability and scale in Africa, leveraging technology to overcome logistical challenges and establish consumer trust, has been incredible. ?? All eyes are on the ability to break even next year.

4. ?????? Inside Nigeria's battle against rampant financial fraud

The involvement of multiple parties and the difficulty in resolving fraud cases involving fintech companies highlight the importance of establishing a strong dispute system and implementing robust customer due diligence and #biometric KYC verification requirements to protect against fraudulent activities.

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• Fraud activities involving fintech companies in #Nigeria are becoming increasingly difficult to resolve without involving the Central Bank of Nigeria (#CBN), leading to delays and prolonged custody for victims.
• The collaboration between banks and #fintech companies in resolving #fraud cases is not as seamless, with delays in communication and resolution giving criminals the opportunity to move stolen funds.
• Establishing a strong dispute system and implementing stricter #KYC requirements can help mitigate fraud in the financial industry and protect customers from financial losses.

Full Report Here

Greetings! I'm Hugo Pacheco, The Barefoot Economist, and I'm on a mission to drive financial inclusion through the powerful fusion of human-led distribution and cutting-edge technology.

?? I hope to raise awareness about important topics and news in financial inclusion, last-mile banking, and the central bank digital currencies (CBDCs) space through my newsletter, while also addressing the inconveniences and misconceptions of offline, unbanked, literacy, and one-size-fits-all solutions.

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