Working on Mojaloop sometimes feels pretty esoteric. My wife recently asked me to explain what I do in one sentence.
“We’re redesigning the entire financial system to fit the needs of low-income financial clients!”
Oh yeah, that’s totally clear.
“We’re creating integration capability for financial institutions to offer better service!”
Nope. Still not there.
So, the past week at the Mojaloop Hackathon (#MojaCamp), organized by the DFS Lab for the Bill and Melinda Gates Foundation, was an incredible opportunity to see some tangible possibilities come to life with the real builders of end-user financial products. Until now, it was largely theoretical that new products and services could be envisaged and built in an open-source real-time interoperable payments environment.
We spent a week with financial institutions serving the poor like Grameenphone in Bangladesh, to last-mile agent networks like OneLoad in Pakistan, and alternative credit scoring companies like Juvo and Jumo which serve multiple markets. These entrepreneurs imagined ways that Mojaloop would allow them to rapidly expand the scale and scope of services they can provide.
When most people think of interoperability, they think of similar financial institutions transacting with each other – primarily the ability to send money from one mobile wallet to another. That was definitely present – especially enabling a new future of merchant payments. It’s an important use case, but most of the innovators we met saw a slightly different opportunity emerging from Mojaloop – connecting financial institutions that offer different services.
True financial inclusion means connecting all financial products – savings, credit, insurance, and payments.
Often for people at the base of the pyramid, these products are offered by different specialized financial institutions.
So interoperability isn’t just “I want to send money from my account to someone else’s account”, it’s also “I want to send money from my account at this institution to my account at that institution.”
Much of this revolves around connecting institutions providing payment services to institutions providing credit services – either through access (connecting rural agents to lenders) or speed (instant loan approval through credit scoring).
Specifically, several teams were focused on enabling low-income clients of small rural banks and microfinance institutions to access their account through any mobile money agent. Currently mobile money agents usually only allow you to access your wallet from that company.
Most of us take for granted that we – the fully banked Western market – have local 24/7 access to our accounts through interoperable ATM networks, so we forget that this wasn’t always the case, even for us. It’s been 30+ years – it’s about time to bring that level of service to the rest of the world.
Working on Mojaloop is still hard to explain to people (like my wife!) who are not focused on technology and financial inclusion. But thanks to my time and participation at the DFS Labs #MojaCamp hackathon I can now point to some real-life access problems that our impact-driven partners are trying to solve using it.