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Method 1 1) Go to http://orderbook.io2) Register. 3) Login 4) Go to Balances in upper menu 5) Copy Deposit address to clipboard  6) Send it to dzyatkovskiy.a@gmail.com with information about your investment done 7) After receiving the MMT token you will see it on your balance on http://orderbook.ioMethod 2 1) Go to https://www.myetherwallet.com2) Create new wallet: a. Enter password and click «Create New Wallet». Warning: if you lose your password you lose your tokens.  b. Download Keystore file and save it in safe place. Click «I understand. Continue.» button. Warning: if you lose your Keystore file you lose your tokens.  c. Open your created wallet: i. Go to «Send Ether & Tokens» menu (1) ii. Select Keystore file point (2) iii. Select Wallet File (3) iv. Enter your password, created at Step 2.a (4) v. Unlock your wallet (5)  d. Your account address will be displayed  e. Send it to dzyatkovskiy.a@gmail.com with information about your investment done f. Then you need to connect the MMT smart contract to your account: i. Click «Add custom token» on the same page ii. Enter the MMT smart contract address *Here will be your smart contract address* into field «Address» iii. Enter «MMT» into field «Token Symbol» iv. Enter «6» into field «Decimals» v. Click «Save»  g. Now you can see your PSIT balance  |
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The emerging markets have outpaced the mature one’s development significantly, experts say. Let’s check out two of the major trends. Smartphones golden age The first trend implies that emerging market buyers are shifting from PC, laptops, and tablets with a high penetration in mature countries right towards a new generation technologies. That means that smartphones there have been adopted not only before PCs but instead of them. Due to continuous smartphone penetration on the market, the growth in a number of mobile phones in emerging markets is proceeding exponentially. According to GSMA Intelligence, for instance, it stands for 76% in Taiwan and for 70% in Myanmar. The reason is that smartphones in Asia have recently become rather affordable and its cost varies just from $30 to $50. Moreover, the capabilities of smartphones processors are on par with PCs’ processors, and the features sometimes wider — photo shooting, for example. Contrary to all the rules The second trend covers rising of the Internet penetration even among people with very low income. The emerging markets show interesting statistics: usually, they have a high percentage of the unbanked and underbanked population and, at the same time, the high level of penetration of the Internet and mobile services. For example, Asian region overall is expected to become the world’s fastest-growing Internet region by 2020. While Internet industry is flourishing, only 27% of the South East Asian population have a bank account. In 2017, China has 731 million internet users and 53,1 %t of them are online. The country demonstrates a fast development pace but still has 21% of unbanked. In Myanmar, the Internet traffic growth is 58% and, at the same time, Myanmar has one of the lowest banking penetration rates in Asia, with over 70% of adults (aged 15+ years) unbanked. Traditional banks and alternative fintech projects battle What is more surprising, these trends have the strong impact on the totally different industries, for example, on the financial markets. Emerging market consumers, in the same way, skip traditional banking services and move to online wallets, payday loans cards, P2P credits and to online applications for loans that can be taken via smartphones! That happened since people found it is much easier and faster to do it by phones, however, this fact formed a new trend in financial services. As mobile and Internet services do not need paper documentation, therefore, neither financial services nor their customers need such traditional creditworthiness proofs as papers, credit histories, collaterals, persons to vouch and so on. All the traditional banks’ requirements make sense as they are just trying to de-risk their businesses, especially for the emerging markets banks. In Kenya, for example, M-Pesa financial service lets customers store, transfer and send money via simple text messages. Usage of WeChat Pay and Alipay apps is approximately 7 times greater than average of top five conventional banking apps in China! However, at the same time, alternative mobile services market is growing rapidly making all the classic rules senseless because the fintech projects found the way not only to accept applications online from mobile devices but to assess their customers online too. For instance, the blockchain company MicroMoney has developed the mobile scoring system based on neural networks technologies that allow estimating of customer's creditworthiness remotely just having an access to a customer’s smartphone data. So its clients don’t have to collect a pile of papers, to provide a collateral and a one to vouch, or to wait for the bank approval. No struggle to prove that they are reliable credit customers or wasting the time if they had no credit history before (because for a bank it means the obvious rejection). MicroMoney’s mobile scoring system after getting the access to mobile data explores around 12 000 different parameters of data stored on a phone (SMS, contacts, social accounts data, searches and purchases, and even a music a user likes) within just several minutes and approves (or disapproves) a loan. In case it approved, MicroMoney immediately sends money right to a client’s e-wallet. With the trends we mentioned before, it’s obvious that the banking industry will not stay the same anymore. Moreover, these changes give the banks the key to the audience untapped before — to the unbanked and underbanked people in emerging markets and worldwide. |
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The phrase “He who owns the information, he owns the world” became famous thanks to the desire of the Rothschilds to be the first to know the news. Winston Churchill loved to repeat the same phrase. But all the great men said the phrase knew that information is only precious if you know how to use it further. Our world thirsts for information. Just a couple years ago the worldwide market went crazy about Big Data and possibilities they might open but dreams became phantoms – no one knew how to work with all the collected information. Now the situation is totally different. There are a lot of tools to analyze the raw data and to turn them into the useful statistics and accurate forecasts now on the market. Companies can use this information to enhance their services, to automate processes, to gain insights into their target market and to improve the overall performance using the feedback they get. For example, the online retail giant Amazon has access to a massive amount of data about its customers, what kind of purchases they make and what are they searching for. While this data is obviously put to advertising algorithms, Amazon also uses the information to improve customer relations, the area that many Big Data users overlook. General Electric uses the data from sensors on machinery like gas turbines and jet engines to identify ways to improve working processes and reliability. Starbucks uses Big Data to determine the potential success of each new location. One more innovative and promising tool to transform the data from raw to useful is neural networks. Even though they have been established as the well-known method in business, there is enormous space for additional research, and here is the case to show it. In the Southeast Asia, the fintech company MicroMoney uses the neural networks and Big Data tools in its own scoring system for a rapid creditworthiness assessment of a client with no credit history. Instead of papers, certificates, and cross checking scoring system analyzing personal data from a borrower’s smartphone. All that's needed is to install the MicroMoney application, sign the agreement to use the personal data and to complete the loan application online. Then the scoring system analyzes all the available data, sets a credit rate and identifies potential credit risks with an accuracy of more than 95%. In case a customer reaches the certain credit score points the system approves the loan automatically and sends the money to a user’s e-wallet. Scoring system constantly reviewing data within its increasing database. The more data processing, the faster and more accurate is the result of customer’s creditworthiness evaluation. In future self-learning algorithms can provide people with all kind of services even before they think about it. For example, a man announces in his social account that his wife is pregnant. This man is known as a reliable client of the MicroMoney, he has a high credit rating. The scoring systems catch this fact, correlate this information with his recent searches for houses to rent in search engines, evaluate his credit rate and he receives a special offer of mortgage for house buyers, with all interests and payments specified due to his monthly income. Or, let’s say, a girl is graduating with a bachelor’s degree with her marks higher than average score and searches for other universities to continue her education. The systems are able to analyze her bank account, to find that she has not enough money to enroll and offer her a student loan. There is no doubt that these technologies can change not only banking industry but the way people consume, spend and save their money. We already face all benefits of targeting advertising but it is only beginning of the integration of smart technologies in our everyday life. |
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MicroMoney co-founder and CEO Anton Dzyatkovsky on attracting new customers, recruitment issues and risks in greenfield countries.
Business is increasingly globalized and decentralized, and we live in challenging times.
A couple of years ago I thought I needed a new challenge in my life, and some time later we packed and moved to Southeast Asia to turn a new page and become pioneers in the payday loan industry. We saw it as an opportunity to enable global inclusion for unbanked people, so in our venture my wife and I chose Cambodia for our home base.
Now that we’ve opened new offices in Myanmar, Thailand and Sri-Lanka, our decision to start with Cambodia can be seen as a definitive step which enabled us to embrace the largest community of unbanked people in the region, bringing the advantages of Blockchain as the key technology for global financial inclusion.
Cambodia is all about banks
For us as Europeans, the first surprise was the population’s absolute trust in local banks.
"There are 36 banks per 1.5 mln urban residents in Pnom-Penh, Cambodia. No bank has ever failed or had its license withdrawn. Fraud is literally unheard of."
The US dollar is as used in Cambodia as the local currency is, and the exchange rate has remained stable for over 20 years. State regulators do not exercise particular pressure on the financial industry, and by the time we stepped into the game, 50 organizations had been involved in the consumer loan industry, each with an average capital of $1.5 mln and an ARPU of $5,000.
With such a lax attitude to banking and loaning, the local banks and microfinance organizations wouldn’t lend a cent without collateral and papers.
Usually, people give real estate or land property security and have to bring at least five certificates, passports and a person ready to vouch for the borrower.
It works: 30-day overdue loans in Cambodia account for only 0.9 percent of the total, so the PAR ratio (portfolio at risk) is quite profitable (according to the local Central Bank).
We decided to pursue a goal of eliminating obstacles on the way to global inclusion, and put trust in Blockchain: the technology offered an opportunity to get rid of numerous papers and jump over banks’ legacy approach to fully digitized and secured customer data.
Our Cambodian lessons
Having developed a real business in Cambodia, we developed a simple checklist to score a country and find out whether it might work to run operations there. Some might find it useful, especially when looking towards promising Southeast Asian countries:
A growing share of the middle class due to the growth of GDP. For instance, Cambodian GDP grew six percent in 2016.
A market capable of generating cheap leads. We discovered all Cambodians belonging to the target audience have at least one active Facebook account, and for them Facebook often equals Internet in general: every national mobile operator provides free access to Facebook.
Dormant or non-existent competition. in Cambodia there were no paperless lending services without an escrow of land or real estate property.
Eager audience in need of a product. when we were checking out the market, we found only five percent of the population had a credit record. According to McKinsey, the number of ‘unbanked’ people in Asian region overall ranges from 65 to 80 percent of the adult population.
Collaboration at the local level. It helped us understand local customers and comply with local regulations (in this case you must be ready to assign 51 percent of your newly established company to a local partner).
Be open: local partners are essential to your success
"In the turbulent waters of Asian business realities, we understood that a well-established local partner is what can fuel your business ambition."
When launching our operations, we considered about thirty local organizations and eventually found excellent partners. Tetsuji Nagata, one of our co-owners, brought along a Japanese venture fund, East Wing ASA Capital, with capital of about $100 mln, and became our co-founder with a share of 50 percent.
A local businessman with a Khmer background (Oknha Sorn Sokna), counselor for economic affairs of the Prime Minister of Cambodia, Hun Sen, and CEO of Sonatra, one of the largest development companies in the country, provided us with an office space and full legal support in Cambodia.
Look at who you hire - they are a reflection of your average customer
We have learned the hard way how it is to find local employees, which led us to a number of cultural discoveries. This was a way to learn our potential customers and get a deep-dive into their peculiarities and psychology.
They are not kings of planning and forward-thinking. This explains loan services’ popularity over long-term deposits or projects: the key goal for a person is to get some money for immediate purpose - right here, right now.
Patriarchal society and strong nepotism contribute to employees’ motivation. When hiring, we had to persuade our employees that our company is their family and the manager is a patriarch, in order to motivate them.
Teamwork matters. The Cambodians, as many people in South-East Asia, tend to be very social and they work more effectively in teams rather than individually, which presents a striking contrast to European or American individualism.
Money is not the key driver and motivator. Earning is not the main reason why Cambodians go to work. An employee can quit anytime they feel they are treated badly, and nothing can hold them - they are likely to leave the very second they feel their work is not appreciated or valued. This helped us to understand why a lot of our borrowers change their jobs quite a lot and adapt the scoring system accordingly.
Single-tasking beats multi-tasking. Cambodian employees are not great multitaskers. They are not capable of working efficiently when burdened by several KPIs simultaneously.
As a foreign company, you have to earn the locals’ trust. Foreign companies are not trusted a lot, so to improve corporate image as a good employer, you need to put forward some advantages of having a working relationship with you.
"Having understood the correlation between local employees and local customers, we decided to evaluate solvency/trustworthiness just the way we designed: we scored candidates the way we scored borrowers. Having interviewed over 400 applicants, we found the 20 best-performers."
You are a helper rather than a conqueror
There was a reason why we decided to choose Cambodia and Southeast Asia to build our new business.
We took on a great mission to help two bln unbanked people become part of a global financial ecosystem. Due to the rigid conditions under which Cambodian banks are ready to lend, the majority of people prefer to stay aside.
When we designed a solution to eliminate this obstacle, we had seen tens of thousand of customers try our app. About 90 percent of our borrowers take their very first loan ever, and 75 percent of customers have an average income of $200 per month.
For 15 percent of borrowers, payday loans became a means of covering their daily needs (this applies not only to end users, but to small businesses as well - think street food providers who buy groceries in the morning and earn the money necessary to return the loan by end of day).
"For 35 percent of borrowers, a loan was needed to cover the costs of a wedding present, which is of great significance in the country."
Our scoring system evaluates the number of parameters it gets from the user questionnaire, approving one per each six applications. We reject an application in 23 percebt of cases, due to the absence of regular work, in 20 percent of cases due to refusal to provide contacts, and in seven percent of cases due to false information.
The conversion from the first to the second and further loans is quite high, and amounts up to 73 percent. Thirty-four per cent of clients take five or more loans, and seven percent of users take ten and more. The sweet spot of our audience is four percent of clients who borrowed money fifteen or more times.
Take on Facebook for an efficient promo
Our website and Facebook account are our major promo tools in Cambodia.
Having placed a loan calculator and lending conditions on the website, we have seen a sincere reaction from the clients via Facebook - which is the key web resource that people visit daily, thanks to mobile service providers.
Our fan base grew up to 500,000 legitimate fans, all of them ready to relate their experience with us - nothing we have ever seen anywhere else. Cambodians are a very sincere people.
The market is ready to technology advancements
Technology proved to be our greatest asset and an indisputable advantage for our customers.
We based our scoring system on a neural network, and when our application provides access to their social media profile data, customers feed an infinite pool of unstructured data to the neural network engine and help it learn more correlations, and assess the credit score more accurately.
"Cambodians are unwilling to provide a pile of papers to the bank in order to get a loan worth $30, and they favoured an opportunity to tick a couple of boxes and get their money in a matter of minutes."
Some of them are ready to provide more data to the neural network, which essentially makes them available for offers from other banks, telecom providers and retailers. When it happens, we consider our mission accomplished, since we were able to provide a person with an initial credit record and make them entitled to further interactions with the market.
We are on the way towards developing the first Blockchain-based credit bureau, which will enable us to store credit records in a secure, decentralized and accessible manner.
Cambodia: aftermath
Cambodia was a start of a long road. Having established operations in Cambodia, we moved on to use the same working model to launch operations in Myanmar, Sri-Lanka, Indonesia and Thailand, thus growing our business and learning more and more from the lessons of Cambodia.
Southeast Asia is an exciting market: people are up for new challenges for a better quality of life, and this presents a promising audience for many good ventures, due to the fast return of investments.
It’s also a real challenge to work in a country which is so excitingly different, and our Cambodian lessons helped us to take on new goals and opportunities in the region.
Anton Dzyatkovsky is a serial entrepreneur, diplomatic negotiator, and creative expert in marketing. He is a passionate and hardworking business leader with more than 13 years of experience in different positions within FinTech, Retail and E-Commerce industries. Since 2016, Anton uncorked opportunities to participate in international business development, focusing on Asia. Anton sees his key challenge in opening new markets from scratch. Currently, Anton is CEO and co-owner of MicroMoney, a lending services provider based in Southeast Asia.
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Lots of money and human assets are being invested nowadays in the crypto industry. We can see new kinds of crypto currency and new smart contracts on the market almost every day. The hype is incredible. Startups launch Initial Coin Offerings (ICO) instead of the Initial Public Offerings (IPO) worldwide and raise almost the same amounts as venture investments are able to bring. Tezos ICO’s unprecedented $232 million-worth of bitcoin and ether record on the market will be broke very soon, experts forecast. At the forefront of this demand, market needs for blockchain and ICO experts grew too. Hype born the other hype — recruiters starts their serious head-hunting for blockchain pros. Unfortunately, the HR market is not able to meet this kind of demand — there are too little opportunities the market can offer, staying hungry.
Looking for any proof? While writing this article and talking to blockchain startups founders, I got four job offers just due to the combination ‘blockchain’ and ‘good at writing’. The HR market in many countries faces the increasing demand of blockchain employees. For example, in the United Kingdom, the blockchain job market has seen an average monthly growth of 25% with 546 blockchain jobs have been posted in the UK since August 2016, according to Joblift. LinkedIn data show more than 1000 blockchain-related job adverbs this summer, more than treble the level of a year ago. The number is growing at more than 40 percent each quarter. All the main worldwide job portals have their blockchain section — Job.com, Indeed, Monster, etc. There are even special job portals customized for blockchain adverts: Blockchain Jobs or Blockchains Startup Jobs, for example. Vladislav Martynov from the Ethereum Foundation in the meantime invested in BlockGeeks, the global project to consolidate all the experts in the blockchain area and to help companies to find the relevant employees for their blockchain-based projects.
Interesting fact: the proportions of specialists the market required are changing. A year ago 90% of job adverts claimed they are seeking for blockchain developers and other technical pros. Today about 30% of adverts belongs to project managers, behavioral researchers, analysts, marketing and SMM managers, communication managers, copywriters, and editors.
As the number one issue facing the blockchain industry today is a lack of talents, top blockchain developers are so scarce that they can demand annual salaries ranging between $300.000 and $600.000, according to industry experts. However, blockchain marketing managers, especially with ICO experience, have now salaries 2-4 times above the average on market.
Which competencies are current experts short of to cover the demand? An ideal employee should not only have a fluent English but also to be up to speed on blockchain technology. Even for jobs in marketing and communications companies ask for a technical background (higher technical education, for example) or proved experience in ICO campaigns support, or knowledge of specific tools (e.g., Telegram and Slack, crypto-related media and social channels, work with advisors, ICO trackers and listings and so on). The majority of projects are constrained by tight schedules and high rates, with some intending to launch ICOs in 1-3 months in order to earn money on the hype. Almost everywhere you get a non-standard work day for real-time interaction with users from USA, Europe, and Asia. However, in fact, nobody has more than two or three years of experience in this.
Get the latest in Asian Bitcoin news here at Coin News Asia.
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MicroMoney announced it joined the principles of the United Nations Sustainable Development Goals (SDGs) global program, set up in 2015 by 193 world nations. To implement the program’s global objectives the company will work to provide a multi-purpose digital identity and opportunities to build creditworthiness and reputation for 2 billion unbanked people, without borders or intermediaries.
The MicroMoney’s business activity rests upon the ‘Remaking of our world: 2030 Agenda for Sustainable Development’ document, which contains descriptions of 17 global goals and 169 related issues.
What is the common issue?
More than 2 billion people worldwide are recognized to be unbanked. That means they forced to use only cash in their daily life and have no chance to solve their urgent problems by applying for banking services. Borrowing from friends and family is the most common source of credit because their loan applications are hardly be approved by banks. The reason is always the same: they have no credit histories.
What are our common goals?
As MicroMoney admits financial services availability as the part of human rights our aim is to provide banks with the tools that allow them to give the access to high quality, fast and affordable services for the world’s financially excluded.
MicroMoney, the United Nations, and other NGOs and government organizations alike are directing resources towards resolving global financial inclusion, leading the way towards eliminating poverty with mobile and internet availability, along with financial inclusion. These technologies will give the access to lending and other financial services even for those who don’t have any credit history, which means the access to basic necessities.
Artificial Intelligent, neural networks, mobile scoring, blockchain to keep all the data securely and Big Data technologies will help the unbanked people to receive this access and will make their data available upon customers’ agreement for financial businesses to organize processes cheaper and more efficient.
How is MicroMoney going to resolve the issues?
In order to bridge the divide, MicroMoney is striving to provide the access to payday loans for unbanked people on emerging markets and the access to the unbanked audience for banks, trade, insurance and financial organizations so they can offer affordable and easy-to-use services around the world.
As people worldwide are lacking the access to basic financial services, they have restricted opportunities to overcome poverty and to improve their lives. That means they do not have an access not only to banking services like loans, mortgages or bank accounts themselves, but the access to all the other services and opportunities. However, such different industries as banking and mobile can help each other.
For example, MicroMoney provides premium micro-financing services for lower income people, underbanked and unbanked customers on emerging markets without any collateral requirements. We use an innovative Big Data approach with our own scoring platform based on neural networks which allow us to establish easy procedures with the shortest processing time for the loan application approval. People don’t need to have a credit history to apply for financial services anymore. The company uses any data collected from a customer’s mobile phone to assess the potential borrower's score rate.
MicroMoney believes that its activities meet the SDG goals:
1 (No Poverty)
8 (Decent Work and Economic Growth)
9 (Industry, Innovation, and Infrastructure)
Financial inclusion is a huge part of the equation when attempting to resolve the issues which result in poverty and lower standards of living. MicroMoney is working to improve the financial systems to establish a sustainable and equal world in which individuals can afford to support their families and beyond.
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STORY HIGHLIGHTS
About 75% of adults earning less than $2 a day don’t have a bank account
More than 2.5 billion people around the world don’t have a bank account
The poor face bureaucratic, travel distance and cost barriers
Three quarters of the world’s poor don’t have a bank account, not only because of poverty, but the cost, travel distance and amount of paper work involved in opening an account, according to new data released by the World Bank.
About 25% of adults earning less than $2 a day have saved at a formal financial institution, according to the 2011 survey of about 150,000 people in 148 countries. The problem of being “unbanked” is also linked to income inequality: the richest 20% of adults in developing countries are more than twice as likely to have a formal account as the poorest 20%, according to the data collected by Gallup, Inc. for the World Bank’s Global Financial Inclusion Database. The Bank’s Development Research Group is building the database with a 10-year grant from the Bill & Melinda Gates Foundation.
The research offers the most comprehensive picture of how adults around the world save, borrow, make payments, and manage risk. Worldwide, 22% of adults report having saved at a formal financial institution in the past 12 months. More than half of the population in developing countries doesn’t have a bank account, compared with just 10% in rich countries.
“Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s poor,” said World Bank Group President Robert B. Zoellick. “Harnessing the power of financial services can really help people to pay for schooling, save for a home, or start a small business that can provide jobs for others. This new report on the world’s ‘unbanked’ makes the case: the more poor people are banking today, the more they are banking on their future.”
Even among those who do have a formal bank account, only 43% use their account to save. And 61% of account holders worldwide use their account to receive payments from an employer, the government or family members living elsewhere, according to the World Bank Global Financial Inclusion Database, or Global Findex.
Women make up a disproportionately large share of the unbanked. For example, while 37% of women in developing countries have an account, 46% of men do. That gap is even bigger among those in poverty: women living below $2 a day are 28% less likely than men to have a bank account.
“Financial tools for savings, insurance, payments, and credit are a vital need for poor people, especially women, and can help families and whole communities lift themselves out of poverty,” says Melinda Gates, co-chair of the Gates Foundation. “The Global Findex can enhance our understanding of how poor households access and use financial services.”
“Lacking a bank account often forces savers to resort to risky measures, such as putting money under the mattress,” says Asli Demirguc-Kunt, director of development policy and chief economist of the Finance and Private Sector Network, who co-authored the paper analyzing Global Findex data. “That makes it harder to build up reserves, let alone use credit, insurance and other complex formal financial tools,” she says.
The database also identifies the barriers to financial inclusion. Nearly two-thirds of the unbanked cite poverty as the main culprit, but within that group, about a third of them also blame the cost of opening and maintaining an account or the banks being too far away (which means long bus rides for many).
“ Financial tools for savings, insurance, payments, and credit are a vital need for poor people, especially women, and can help families and whole communities lift themselves out of poverty “
Melina Gates
Co-chair, the Gates Foundation
“These barriers may have proved to be excessive, especially considering that many people can only set aside a very small amount of money each month,” says Leora Klapper, supervisor of the Global Findex and lead economist at the Development Research Group. “Policy makers should take note that adults who save informally find the physical, bureaucratic and cost barriers to opening a bank account to be especially prohibitive.”
Money transfers through mobile phones are a form of increasingly popular nontraditional banking, which often doesn’t require users to travel or set up an account at a brick-and-mortar bank. Such mobile banking, which allows account holders to pay bills, make deposits or conduct other transactions via text messaging, has expanded to16% of the market in Sub-Saharan Africa, where traditional banking has been hampered by transportation and other infrastructure problems. In particular, Kenya has seen impressive growth in that market, with 68% of adults using a mobile phone for money transactions.
The widespread use of informal-savings mechanisms suggests a missed opportunity for the market to provide safe, affordable financial products to the unbanked. For example, adults who don’t use banks or other formal financial institutions often turn to fairly sophisticated methods to manage their finances, such as rotating-savings clubs or credit associations. Each week, those clubs pool deposits from members and give the entire collection to a designated member. The practice is particularly popular in Sub-Saharan Africa, where 48% of savers use an informal savings club or person outside the family to save. In Nigeria, 69% of adults who save use the clubs, also known there as esusu, ajo, cha, or adashi.
Few adults in developing countries use formal financial products to manage risk. More than 11% of adults in developing countries have an outstanding loan for emergencies or health-care needs, but more than 80% of these adults use only informal sources of credit. Of adults in developing countries working in farming, forestry or fishing, only 6% of them have crop, rainfall or livestock insurance.
The questionnaires used for the survey, available in 15 languages, can be found here. The World Bank encourages countries to use the questions to collect more financial inclusion data, by adding them into censuses or other national surveys.
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Co-founder of MicroMoney Payday Loan Services in Southeast Asia, Anton Dzyatkovsky, talks about attracting customers, recruitment issues and risks.
Two years ago, my wife and I thought that it was too difficult to do something interesting and new on the financial market in Russia. The market has already been occupied entirely by serious market players and automation technologies in the microfinance sector were already developed by strong competitors. So I thought: “Why not to become a pioneer of payday loans lending in a total greenfield country?”
We chose Southeast Asia, and almost immediately we found that bringing our automation capabilities there was like sending a computer to the Middle Ages. The vast majority of microfinance companies in Asia keep all their records in Excel or even on paper ledgers. This extremely low level of automatization is compensated by the huge number of affordable employees.
The country that loves banks
The market in Southeast Asia is completely different to the European and the US markets . The first surprising thing is that local people trust the banks completely. There are 36 banks per 1.5 million urban residents (I mean Phnom Penh city) now in Cambodia. Not a single bank in the country’s history has failed, and none of them has had its license withdrawn . No financial bubble or fraud schemes have set in. It is very convenient for business that the US dollar has formal circulation in Cambodia. The rate of the country’s official currency (the Riel) has not changed against the dollar in the last twenty years. Cambodia still has the image of a postwar country with aid demands, and thus inflation is compensated for. During the civil war of 1975–1980, the currency units were abolished: the “Khmer Rouge” blew up the National bank and placed a fertilizer warehouse in its stores.
At the same time, the country takes seventh place in the world for money laundering. I talked to ABA-Bank managers (Top-3 Cambodian bank) and they told me that banking transactions up to $500 thousand are not a subject of state financial monitoring. Banks do not ask questions even if the money comes from Afghanistan or Syria. An amount that exceeds this sum is investigated more seriously — sometimes banks can ask for a contract.
In general, state regulation on the market is in a ‘lite’ version: the government does not have enough resources to control many industries and, for example, consumer cooperation is still not properly regulated. About fifty companies are involved in consumer lending, each with capital of $1.5 million average and $5000 of ARPU.
Local banks and microfinance organizations are frightened by any idea of lending money without collaterals and papers. Usually, people give real estate or land property security and have to bring at least five certificates, passports and a person ready to vouch for the borrower.
Moreover, it works. In fact, credit overdue for more than thirty days here is only 0.9%, according to the local Central Bank, so the PAR ratio (portfolio at risk) is quite profitable.
How to start a financial business in an Asian country
We tried some different Asian markets and made a simple list to check if the country is open and full of opportunities.
Consumption is on its way on the market: the middle class and Gross Domestic Product are growing. In Cambodia, GDP showed +6% per year in 2016. For comparison, in Russia, there was a decrease of 3% in 2015.
The market has cheap leads generation capabilities: in our situation, almost all users live on Facebook, literally, and sometimes have several Facebook accounts. Cambodian people understand the Internet as Facebook; do not use Google or something, and every mobile network provides a free access to this social network.
There are simple options for money transactions. For example, in Cambodia, any SIM card owner simultaneously owns an e-wallet and can withdraw cash or make a deposit to his or her account anywhere.
Low competition or lack of competition: e.g. in Cambodia there are no paperless lending services without a security of land or real estate property.
There is your target audience: in our case, only 5% of the population has a credit history. However, all of the Asia region is in the same situation: according to McKinsey, the number of ‘unbanked’ people ranges from 65 to 80% of the adult population.
It is possible to find a local partner. We highly recommend this in order to understand the local customers and to follow local regulations (sometimes the company’s share of 51% should belong to a local person).
We explored about thirty local organizations and found excellent partners eventually. The first was the Japanese venture fund East Wing ASA Capital with capital of about $ 100 million dollars and its member, Mr. Tetsuji Nagata — CEO of Sonatra, one of the largest development companies in the country. He became our co-founder with a share of 50%. The second was the local fund’s partner — Khmer Oknha Sorn Sokna, who provided us with an office space and a full legal support. By the way, “Oknha” in his name is a title, the highest for Cambodian citizens, and similar to Sir in the United Kingdom.
Mr. Sorn Sokna is the counselor for economic affairs of the Prime Minister of Cambodia Hun Sen (in fact, he is the head of the country). Okna Sorn Sokna is a council member of ASEAN with a number of royal orders and awards in acknowledgement of his contribution to the Cambodia development.
As a result, we were actually involved with their friendly family. In 2016, we visited the ASEAN forum in the delegation team. Moreover, we even became famous within the country — The Phnom Penh Post, in the main newspaper of the capital, published an article devoted to our company. Thanks to this publication we became acquainted with the Head of the Central Bank of Cambodia.
“Your loan costs exactly one cup of coffee per day”
We became the very first service in the country to complete, to process and to approve loan applications online without any collateral required. All we need is an access to a customer’s mobile phone data. In Cambodia, people, in fact skipped the PC era and began to use smartphones at once. To start a scoring process a customer just has to download the MicroMoney’s mobile application, complete some fields and to sign a personal data processing agreement with just one click. It is an Android application, by the way — because the majority of devices people use in Cambodia are Android-based.
SMART is the cheapest mobile provider and mobile phones vendor with a price of 30–50 dollars per a phone. The system of customer data track based on AI technologies and self-learning neural networks. All the data is stored within the system with the help of blockchain technology. As a result, the process of approval of a payday loan application takes less than five minutes, and that way MicroMoney became the microfinance company with the fastest approval, with no collateral or people to vouchsafe for the client.
We approve payday loans before the customer’s salary date, and this is a rule. The rate, as well as the loan amount, are small for the first time — 2% per day. We show this rate to clients as a comparison: “Your loan costs exactly one cup of coffee per day.” The majority of the customers are satisfied with this because an average loan is $60, so the overpayment is just a dollar per day. This is a price for a cup of coffee or a plate of rice.
We transfer the approved loan to local plastic cards. A person can apply for it only with a passport, and in this way we solve the problem of customer identification.
Right from the very beginning, we used a long list of cross checks to approve a loan.For example, we asked for the colour and the number of floors of the office building a person worked, and then checked the answer; asked parents in a person’s contact list for a customer’s date of birth, inquired with a person’s relatives about his or her home address. Eventually, we found that such inspections were redundant, made the approval procedure tricky and caused stress to borrowers. We realized that a thorough scoring is suitable only for mature credit markets. The ‘virgin’ markets are not full of scammers, so fewer questions means more approvals. As a result, now we check only the place of work, the boss, the family and the contact details. Our goal is to distribute at least $10 to everyone who applies.
It wouldn’t be possible without a simple CRM system. Firstly, we processed all the clients in Excel — but then we reached 10 thousand customers and we gave up. Now an operation analyst task is just to read the text from the screen with expression and CRM do the other things.
A good reason: a friend’s wedding
Asia is like another universe. There are super-technological countries such as Singapore, Thailand, Malaysia, and emerging markets with a lot of poor people — Myanmar, Vietnam, Cambodia.
90% of borrowers take their very first loan ever. The majority (88%) are male, and 75% of customers have the average income of $200 per month. The basic reasons for payday loans: 15% need some food, 35% apply for a loan because of an invitation to a friend’s wedding! There are also the following popular reasons (10%): school expenses, children and medical care, the Chinese New Year celebration, gas, and motorcycle repairs.
Here are some reasons a payday loan wasn’t approved: 23% people had no work, 20% refused to provide their contacts, and 7% simply gave false information.
We approve a loan for every sixth client on average. Our expenses per loan include $6 per application process and scoring procedure, and operating costs (wages + rent), $10 in total. The average loan amount is $60 and the average period is 12 days.
Each signed-up customer takes 4.5 loans on average. We can see that clients get payday loans because the conversion from the first to the second and further loans is quite high — 73%. 34% people take five or more loans, and 7% take ten and more. The gold pool in our audience is 4% of clients who borrowed money fifteen or more times.
The good, the bad, and the ugly
We have a very simple scheme — a good, a bad, and an ugly police officer. For the first month of overdue date, we are not bill collectors but financial consultants helping people to plan their assets and payments. After 30–90 days of delay, we remind a person politely and persistently about the debt and call all his or her contact persons. We use SMS-mailings service and calls for that. After 90 or more days of delay, we use all the possible channels, including social networks, to remind them about the debt. In Cambodia, this is the only thing that can help in the case of serious delay.
Lunch on time: HR in Cambodia
Recently, we created the picture of a perfect employee in the Southeast Asia — local, inexpensive, a solid sales manager and a workaholic. The key word was “perfect” because we soon found that the task to find such a person was fantastical itself. If we talk about specialists and not only about processing operators this task sounds impossible.
While we were searching for employees, we faced the same questions repeatedly:
Why does Khmer behavior operate with logic we cannot understand?
Why are the most reliable employees older than 35 years and why are people of this age tricky to find?
We found all the answers in Cambodian history: almost forty years ago, the civil war of 1975–1980 ruined more than three million peoples’ lives. The war’s goal was population enslavement, the elimination of intellectuals , and resettlement of urban residents to the villages. The share of the urban population has fallen dramatically, and until 2015 the growth was at a low level — less than 1%.
The Khmer Rouge had a policy of evacuating urban areas and forcibly relocating their residents to the countryside. The civil war ideology was that the cities are full of evil, and a person will finally understand the true meaning of life by working hard at growing rice. All Cambodians must become peasants and the country should focus on working towards a purely agrarian society.
Teachers, doctors, intellectuals, or even those who simply wore glasses were executed without any tribunal or investigation. Writing and reading were forbidden, books were burned, six thousand schools and all universities were destroyed. The Khmer Rouge decided to get rid of all modern benefits of civilization: they broke cars with hammers and buried household appliances.
All this had a serious impact on the HR market today. It is hard to find professional or highly- motivated employees over 35 years old because these people born during the civil war or right after. Simultaneously, these are the most experienced and preferred employees, unlike Europe and USA, where companies want someone up to 30 years old. There are not so many thinking or ambitious specialists because most of them are peasants’ children. Education in Cambodia is still optional and, therefore, the illiteracy level is very high — for up to 30% of the population. This explains some the national peculiarities in the employee’s behavior:
Planning and thinking about the future are not employee strengths. This explains the loan services popularity over long-term deposits and or projects: the main thing is to get some money today.
Cambodian people respect their elders a lot. This is maybe not so democratic but senior people and people with a higher status have a particular importance here. Nepotism is also ever-present: we have to prove to employees that we are the family for them to work hard. In general, you don’t need to ‘manage’ people in Cambodia because the boss status (as well as the status of the housefather) is the reason for the team to do their best.
The Khmers uphold groupthink so they better work in teams than individually.
Salary and its level are not the reason why Khmers go to work. Employees can leave the place of work anytime if they are not satisfied by an attitude or something, and their remaining unpaid salary does not matter. That’s why a lot of our borrowers change their jobs quite a lot.
Employees work better when are single-tasked, not multi-tasked. Therefore, the case with several KPI simultaneously is not effective.
Foreign companies are not trusted a lot, so to improve corporate image as a good place to work in you need to put forward some other advantages.
At first, the employees’ childish behavior made us fall into despair, but now we take it more calmly with the help of soothing medications and our own methods of work. Since employees who have worked for less than two months are not profitable, in order to protect ourselves we tried the following things:
We scored each employee the same way as a borrower was scored to check his or her trustworthiness;
We gave wages on the 15th day of the month next to invoiced period. We did it to avoid an often situation when an employee received a salary at the end of the month and then simply disappeared.
We even tried some fines for those who left us before the employment contract ended.
In total, we interviewed about four hundred candidates and chose just twenty loyal employees who can work without any total control. By the way, candidates have only two questions during the interviews: how long does the lunch last and how many bank holidays they will have. For you to know: Cambodia has twenty-eight official days of holidays.
We attract customers with food and girls
To promote the service, we have created a site monusluy.com in the Khmer language. The first you see there is the call to action — to apply for a loan, then an online loan calculator with odd numbers — a little trick to make the calculation more difficult. There are the following loan stages: the first loan is not more than $30–40, with each new loan a customer can apply for a $10 more payday loan.
We always make various experiments with advertising appeals, and at the same time teach people to spend money more wisely — not to spend all you have on entertainment and alcohol but put some aside for education or medical care, for example. The most attractive image, by the way, is a nice young lady, who holds a pretty nice bundle of money. We tried a male image for this but the statistics showed that girl’s photo attracted twice more clicks.
Other things that work are customer reviews and testimonials — I mean, real histories of borrowers with their real photos. In addition, we added quotes from great Khmer personalities — all we could find about money and loans. It was quite simple to find them, but difficult to translate into Khmer.
As I said before, Internet means Facebook for Khmers. They keep their whole life in Facebook: girlfriends and boyfriends, relatives and spouses, all their lunches, all the work and even the reason they were fired. Therefore, Facebook is a powerful tool to hire, to check borrowers and to collect debts.
We have more than 67 thousand subscribers in our social accounts and about 500,000 likes on Facebook page. We had some difficulties while searching for our target audience. At first, we sent adverts to all age categories, but later excluded young people under 24 years old — their leads were very cheap, but delivered poor quality. Then, due to the same statistics, we excluded all the people older than 37 years from our advertising audience. Finally, we looked again at ads for women: their leads are worth ten times more than male ones.
We have noticed that people reacted more actively and positively when they saw photos of real persons whose loans applications were accepted, than at clipart images. The posts that attracted the most reaction were food pictures because people often borrow money to buy something to eat. As a result, we increased the users’ involvement more than ten times, with an average reach per post from 300 to 3,000 users.
We use our Facebook account to work with debtors. For example, we publish posts with their documents and contact information and search for any new data about those who attempt to hide without payment and who do not answer their calls. Facebook helps us to understand whether a person applying for a loan provides incorrect or outdated information without any calls or cross checks.
Here’s one of example of how the process works. We had a borrower with a long overdue loan repayments. He didn’t answer our calls or other messages and all his contacts were outdated. We explored his Facebook-page and found a new photo of him with a uniform and a badge. We understood he had a new job and read the name of his employer on badge and uniform, and then found this company and its head in search engines. In such cases, you should act quickly and even aggressively, so we immediately contacted his boss. The company confirmed that the debtor worked with them, gave his current contact information, and he had a serious discussion of his behavior with the director. This tool allows our team to recover up to five times more debts than average.
Now we have a large team of about 200 employees across offices in Cambodia, Myanmar, Thailand, and remote teams in Russia, England, and Israel. We found a 400 square meters office in Bangkok, and have already signed a contract with some people to join us. We hope to expand our team and to provide some space in our offices for start-ups interested in the advanced technologies, marketing, and blockchain. To ensure this I’m working fifteen hours a day daily and hope to continue the pace.
Payday loans in the Southeast Asia: audience and requirements
Our clients are honest and hardworking people who cannot get a bank loan because they have no credit story. The reason they have no this story is that no financial organization approve them a loan. This endless circle involves 2.5 billion people worldwide. Most of these people are from Asia -yet , even the USA has about 50 million potential such clients.
To get credit in developing countries, it’s necessary to bring at least five documents:
· A reference from the police
· A reference from the administration of your district/area
· A reference from the house owner
· Official work reference
· An income statement
You can also use land as your collateral if you own some. In all other cases with no credit history, no package of papers and no person to vouch for you, the bank approval for a loan application is practically impossible.
Our goal is to give these 2.5 billion peopl,e who do not have access to the old classical centralized bank economy, a way to achieve modern world benefits.
Is it worth doing business in Cambodia?
Would I recommend choosing Cambodia or another emerging Southeast Asia market? Yes and no. Yes because they are markets which are commonly called ‘developing’ — experts consider them the most profitable in terms of quick return on investments. These markets are not sufficiently controlled by their governments or the major players, so you can make the rules yourself. Moreover, it is interesting as a personal challenge. I had $30,000 of seed funding and a great desire to not only earn money but to help people. Usually, investors do not care how you do your business, they need just your project presentation, your mission, and business goal. Many investors give you money for emotional reasons.
I would have achieved nothing, if I had tried to do everything by myself, without like-minded persons and partners to help me. If you plan entering the Asian market alone, without reliable partners, without a local audience, or a knowledge of how the local culture operates — do not do it. Look for your own guide in the Asian jungles.
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More than 2.5 billion world’s adults don’t use banks to save or borrow money, and 39% of the world’s population hasn’t got a bank account. According to the McKinsey, the most affected regions are Africa, Latin America, and the Middle East (about 65–80% of the adult population are unbanked). However, even in the USA with just an 8% of the unbanked adults, about 15.6 million people still don’t have an access to loan services and 51.1 million consumers are considered underbanked, according to Global Findex. The reasons among others are the lack of a credit history and poor credit rating.
Experts blame the diversity of bank scoring systems: almost every financial organization operates its own system for assessing the borrower’s credit score, and the criteria may vary significantly. Not every country supports credit reference agencies but in case it does this cause some certain problems (credit costs increasing, delays in data processing, customers’ unwillingness to share their credit information, and so on). Obviously, countries use different credit scoring systems, so the complexity of reporting varies in each country with their respective regulations.
This creates an endless circle — lenders provide a loan to a person without a credit history quite reluctantly, so a customer is not able to start it. Banks usually approve loans just for the third of unbanked, — and lose a significant part of their target audience. According to World bank, the largest part of unserved are people from 25 to 64 years old, mostly poor who live on less than $5 a day, 35% are urban residents. The majority (59%) of this population found in low- and middle-income emerging markets, which are fast-growing and lucrative but not easy because of higher risk, national specifics, and local regulations.
Banks solve this problem spending money on markets research, simplifying a bank account opening procedure, and trying to come up with alternative ways to assess a credit score. The recent hype of neural network offered the market one more tool — a mobile phone. In the Southeast Asia (in such countries, for example, as Cambodia and Myanmar), the fintech start-up MicroMoney (founded in 2015) now provides micro-financing services for people with an empty credit history and assesses the potential borrower’s score rate based on data collected from the person’s phone. A customer should download the mobile application and sign the processing of personal data agreement. ”A phone can tell a lot more about customers than they agree to tell by their own. Moreover, an access to a mobile phone will give more diverse and reliable information than a passport or other papers can,” says the founder of MicroMoney Anton Dziatkovskii.
The process is quite simple for a lender: the Big Data platform drives all the data received from the phone through neural networks, analyzes the result, and evaluate a customer’s trustworthiness. Eventually, a client gets his credit services with no collaterals required. That is completely new for Asian countries where a customer should bring at least five certificates including the property owner’s letter.
All reliable customers are included into the most valuable list with options to select certain segments (age, sex, profession, loan purpose) available for any other businesses, and a person supplies primary needs and gets a good credit rate.
In fact, MicroMoney expects to form a legal market for the credit histories creation from scratch and their further support. After all, the absence of credit history does not mean that the customer is not creditworthy, as unserved doesn’t mean unservable. Many financial companies learned to use alternative ways to explore it. For example, in the UK a bank during mortgage availability assessment can examine all of your purchases and check-ins in pubs within the year to determine your alcohol expenses. In Mexico, Banco Azteca sends its agents to the homes of borrowers to take an inventory of stereos, TVs and other appliances they possess to support their loan application. Therefore, any software solutions that are able to accumulate and analyze information from all these additional sources are predictable for fintech market.
The company chose the mobile phone because of a high level of smartphones penetration, even in countries with a low level of banking services distribution. For example, in Africa, 80% of the population does not have a bank account but 63 of 100 people use mobile phones. So, in Kenya, for example, financial service M-Pesa lets customers store, transfer and send money via simple text messages and one of Barclays’ services allows customers to use an app to open accounts, apply for loans and receive funds. Secondly, this is a higher popularity of smartphones above laptops and computers. Finally, it’s practically equal capabilities of smartphones’ and PCs processors and features along with significant progress in financial services mobilization, cloud services, and Big Data systems to analyze all these data.
Clear and full information about a person based on the analysis of a customer’s card operation and purchases (from payment via Apple Pay to Amazon orders and searches), career (e.g. from job portals and social media), interests, social networks accounts (confirming that this particular person is real), travel notes, family status, penalties received and so on. According to Anton Dziatkovskii, this content sounds more truthful and allows predicting a customer’s behavior to avoid excessive risks.
However, the most valuable thing in this process is full and diverse information about people who need loans and, more importantly, people who give them back. MicroMoney management assures that transparent credit history will expand the opportunities of the financial market significantly. “As soon as we finalize our credit histories product, we expect a surge of interest from banks, financial and insurance companies, as, in fact, we will undertake the most part of risks,” Anton Dziatkovskii says.
The forecasts for such software looks interesting as financial companies are able to reduce their risks to enter Asia, Africa, and the Middle East markets. This may cause lending rates decreasing and higher competition for the quality of loan services as access to the same credit histories would be available for many players. That will probably push some new forms of financial services, e.g. cash using (to open an account, to support a loan application, etc.), because wages in cash are natural for emerging markets.
MicroMoney is a fintech company but introduces as a charity organization in some way as its goal is to give a chance to 2.5 billion of underbanked to become a part of banking economy, to start small businesses, and to get medical care and education.
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Everex, a [Suspicious link removed]pany developing Ethereum applications, has announced that it has entered into a partnership with Myanmar-based microlender MicroMoney.
With this partnership, Everex now has access to MicroMoney’s over 450,000 unique customers and registered users.
“We chose to partner with Everex because it is the easiest way to deliver money to our customers,” MicroMoney’s Anton Dziatkovskii said. “You just download the e-wallet and that is all. Our customers can expect immediate delivery of funds across borders.”
Everex said that the collaboration will be a mutually beneficial engagement, with Everex gaining a share of the microlending market and MicroMoney gaining increased reach and potentially benefitting from Everex intellectual property. According to the official release, the companies are currently in the process of pilot testing the integration and MicroMoney has been already sending money to borrowers via the e-wallet already.
“Everex has secured the business of nearly 500,000 new customers by forging this partnership with one of Myanmar and Thailand’s leading micro-liquidity providers,” Everex CEO Alexi Lane said. “And this isn’t the last partnership in the works. We have a litany of projects in the designed to move us towards our straight-forward goal of cross border cash-transfer and micro-lending. We plan on providing our customers with a multi-thronged approach to decentralized applications. While based on proprietary technology we first started developing on the bitcoin blockchain, Everex takes an open-source and transparent approach to financial inclusion, and this integration with MicroMoney is just one piece of that overarching, and sustainable, vision.”
The companies currently serve customers in Thailand and Myanmar, where many individuals rely on transparent, cost-effective businesses to transmit money or take out loans. When two aligned businesses come into market together, they make a far larger splash, Everex said.
“Everex and MicroMoney make it easier than ever to open a digital account,” claims Dziatkovskii. “No more waiting in a line at the bank and waiting for 3–5 working days to open a bank account.
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