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Towards a Cashless and Inclusive Society in South Africa – Interledger Summit 2024

- Julian Kanjere

The 2024 edition of the Interledger Summit by the Interledger Foundation took place in Cape Town, South Africa on the 26th and 27th of October 2024, with the theme – Bridging Worlds: Unleashing the Power of Interledger. The summit explored the ways of strengthening the United Nations initiative towards healthier digital public infrastructure (DPI), creating a more responsible financial ecosystem and and increasing economic participation for communities around the world, leveraging emerging technologies, including Interledger’s technology (e.g. Open Payments protocol).

Representing Mandla Money, I participated in a panel discussion with Dr Allan Davids (Director of the University of Cape Town’s (UCTs) Financial Innovation Hub, and fellow UCT MPhil in Financial Technology alumnus, Kungela Mzuku, in which we explored how to drive digital payments and digital inclusion in informal economies, and unpacked why the use of cash remains prevalent in South Africa (watch on YouTube). Official statistics suggest that financial inclusion in South Africa is high (~80%). However, this statistic is somewhat misleading, if viewed out of context because it does not account for whether an individual is underbanked or not. An underbanked individual will have access to a cheque account but not access to credit, and the cheque account typically has a low frequency of use on a monthly basis (e.g. once a month to draw all the cash, pay a single transaction fee and then use cash throughout the month). The underbanked phenomenon is key to understanding why cash remains prevalent and mobile money has been slow to take off.

Cash is Convenient

Cash remains king because it is convenient for consumers. A consumer that withdraws cash after receiving their salary knows that it is universally accepted by merchants. Merchants, informal communities typically accept cash and card payments, but they often will impose minimum spend requirements for card payments in order to offset the high costs of transacting with Point-of-Sale (PoS) devices. Another reason why consumers withdraw all of their cash in one go, post pay day is to avoid paying high service fees from repeated bank account usage. One bulk withdrawal, one service charge, and no further service charges when transacting with cash.

Mobile Money – South Africa vs Zimbabwe

Tackling the elephant in the room, why has mobile money been slow to take off in South Africa, especially compared to Kenya (M-PESA) and Zimbabwe (EcoCash)? There are variations of mobile money in South Africa, including MTN’s MoMo and FNB’s eWallet, eWallet is arguably the defacto leader at present. One can argue that South Africa’s financial services system is developed and sufficiently distributed – payment systems are accessible via different channels – mobile, online, ATMs, retail supermarkets etc. – and a variety of payment methods are accepted by merchants – cards, cash, QR codes. In fact, I would argue that a lot of the retail FinTech innovation has been focused on convenience and not a fundamental enablement of payments e.g. Zapper & SnapScan. Looking at the case of Zimbabwe, between 2007 and 2009, Zimbabwe suffered severe hyperinflation, which resulted in cash shortages (and cash withdrawal limits at ATMS). This, and a lack of trust in the financial system created a conducive environment for mobile money, and the birth of EcoCash. As the old adage goes, necessity is the mother of invention, and at present, South Africa does not have strong enough endogenous push factors towards mobile money as Zimbabwe (and Kenya) did.

Mobile Money v2 and Mandla WhatsApp Wallet

Instead of asking why mobile money has not taken off in South Africa (or other sub-Saharan / emerging economies), perhaps the better question to ask is what financial services solutions can we come up with that allow consumers and merchants to transact digitally, whilst leveraging existing infrastructure and public spaces. We know that hardware is improving and becoming cheaper (Moore’s law). Connectivity is improving, low-cost smartphones are available, open banking APIs are becoming more common.

At Mandla Money, our approach to this has been enabling peer-to-peer payments and access to retail financial services via WhatsApp, stablecoins and open banking APIs. At the end of the day, making payments should not feel too different from sending a message (case in point, WhatsApp), and it should not matter which mobile network operator you are with!

Panel discussion – Towards an inclusive cashless society

Book launch – More than learning: Entrepreneurship at University of Cape Town

- Julian Kanjere

The University of Cape Town (UCT) has recently published an entrepreneurship book titled More than learning: Entrepreneurship at UCT which describes the UCT entrepreneurial ecosystem and profiles some UCT entrepreneurs (both current students and alumni). The book, aptly named, comes at a time when the role of universities as learning institutions is evolving and aligns perfectly with UCT’s Vision 2030, which is to “Unleash human potential to create a fair and just society“! Entrepreneurs take risks, they dig deep into their human potential. Paraphrasing from Guy Raz, author of How I Built This, entrepreneurs push boundaries, they explore unchartered territory and build products, services or bring ideas that become accessible to (and often change) the world.

Entrepreneurship requires a problem to be solved, a problem solver and a supporting environment to bring an idea to life. The Entrepreneurship at UCT book, edited by Alison Gwynne-Evans, describes the initiatives and structures at the institution that enable entrepreneurship – the UCT environment, and showcases some of its problem solvers and the problems they are solving – the UCT entrepreneurs and their startups. The initiatives and structures in the book, including the UCT Solution Space, the annual UCT Genesis Project, Design Thinking at the Hasso Plattner Design-Thinking School Afrika, and the Pitch UCT, all offer support, platforms and pathways to entrepreneurship.

The book also profiles a number of UCT founders and the startups they are running, which span a diverse range of verticals including an African language learning platform, an online coding school and an agency supporting traditional Afrikan beer homebrewed by women. Some of the startups include Zaio, Vambo Academy and FoodPrint. Zaio, founded by Mvelo Hlope, creates a personalized learning experience to learn how to code and build digital solutions. Vambo Academy by Chido Dzinotyiwei is an online platform that aims to teach African languages and share various aspects of African heritage. FoodPrint, which I founded, is an agri data platform which connects farmers to information and financial services.

Read more about the book launch here and access the book online on OpenUCT.

Falling Walls Lab Cape Town 2022

- Julian Kanjere

#FallingWallsLab is a 3-minute world-class pitch competition, networking forum and stepping stone for students and early-career professionals from around the globe by the Falling Walls Foundation (FWF) in Germany. The FWF – channelling the iconic image of the crumbling concrete blocks of the Berlin Wall in 1989 – are on a relentless pursuit to find out: Which are the next walls to fall? To answer this question, FWF hosts the annual Falling Walls Science Summit in Berlin where winners from the Falling Walls Labs events – which take place at renowned academic institutions around the world – compete on the global stage.

In September 2022, I had the privilege of of taking part in the Falling Walls Lab Cape Town event at the University of Cape Town (UCT), which was hosted by the Friedrich Naumann Foundation. I gave a 3 minute talk titled Breaking the wall of smallholder farmer poverty in which I spoke about FoodPrint and how we are using WhatsApp and blockchain technology to provide farmers with production records, financial services and connect them to markets.The novelty in our approach is how we are combining existing and ubiquitous apps like WhatsApp and 4IR tech to provide both utility and agency to users in emerging markets who find themselves in low tech environments (unreliable internet/low resource smartphones etc).

Looking at the numbers, there are 33 million smallholder farms in Sub-Saharan Africa from which 70% of the continent’s food supply is produced. Looking at the bigger picture, there are 600 million smallholder farms worldwide producing ~1/3 of the world‘s food. However, smallholder farmers comprise a large proportion of the world’s poor living on less than $2/day but this can be remedied through the use of accessible technology to provide credit, insurance and access to markets.

Out of 12 participants, the top 3 were awarded prizes – I was awarded 3rd place. The overall winner – Emma Horn – went on to represent UCT at the Falling Walls Science Summit in Berlin where she placed 2nd overall!

Here is a link to the highlights of Falling Walls Lab Cape Town – watch here. Special mention to UCT for hosting and Friedrich Naumann Foundation for putting together the event.

Reimagine with Eric Schmidt

Winning the Schmidt Futures Reimagine Challenge 2020

- Julian Kanjere

I am excited to share that I have been selected as 1 of the 20 global winners of the Schmidt Futures Reimagine Challenge 2020 challenge. Launched in August 2020, the Reimagine Challenge called on students from across the world to submit innovative solutions to spark global movements for change and build back from COVID-19. Following a rigorous evaluation process, the Reimagine Challenge team went on to select 20 winning submissions, having received 838 submissions from across the world.

Titled  “Using Technology to Elevate the Status of Smallholder Farmers and Amplify their Contribution Towards Achieving Food Security“, my submission was based on the FoodPrint Farmer platform – a blockchain-enabled platform for digitising smallholder farmer operations that I am currently building. FoodPrint was birthed whilst exploring use cases of blockchain technology in the MPhil in FinTech degree at the University of Cape Town (UCT). You can read my submission in the Reimagine Challenge Anthology which can be downloaded from here.

What it means to be named a winner

It is humbling to be named a winner in a global competition. It underscores the relevance of emerging technology in solving challenges faced in emerging economies, as well as the potential of novel data-driven business models going forward.

Being named a winner also reminds me of a quote from Brian Tracey that I try to live by – “I’ve found that luck is quite predictable. If you want more luck, take more chances. Be more active. Show up more often.”

Relevance of such challenges for students around the globe, and especially African students

Challenges such as the Reimagine Challenge provide an opportunity for students to exercise creativity outside of the traditional academic setting, validate ideas on the global stage and accrue some innovation capital. For African students in particular, they additionally provide an opportunity to not only build diverse international networks but also demonstrate the ability to compete and contribute on the global stage! It is especially encouraging to note that 4 of the 20 winning submissions are from the UCT.

What comes next

In the words of Mark Zuckerberg, ideas do not come out fully formed. There is further prototyping and piloting required before realising product-market fit for the FoodPrint Farmer platform. Outside of building FoodPrint, I am proceeding with further research and engagements on Blockchain Technology and Data Privacy, as well as technology mentorship in South Africa.

Keep Moving Forward.

Julz

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Footnotes
  1. Schmidt Futures is a philanthropic initiative by Eric and Wendy Schmidt. Eric Schmidt was the CEO of Google from 2001 to 2011.
  2. For the Reimagine Challenge 2020, Schmidt Futures received 838 submissions from students enrolled in 264 schools in 40 different countries, representing 86 nationalities and speaking 53 primary languages.
  3. Shout out to everyone who has played a part in shaping the FoodPrint idea. This includes A/Prof Co-Pierre Georg, Oranjezicht City Farm Market, UCT MPhil FinTech class of 2019, UCT GSB’s Solution Space and the Oribi Village team.
  4. Links to official announcement and press coverage: