This is because Mama Money rates are set at a no-hidden fee of 5%, with no margin charged on the exchange rate.
“For centuries people have crossed borders seeking better opportunities for themselves and their families. These migrants have sought improved economic opportunities to send money home regularly. This process of low-value person to person money transfer is known as international remittance,” said co-founders Raphael Grojnowski and Mathieu Coquillon.
Millions of migrant workers labour in South Africa, often seven days a week in order to earn enough money to support their families at home. On average one third of their income is remitted home every month.
Remittances are generally used to cover basic needs, such as buying food, clothing, paying school fees and medicine. A substantial portion of remittances are ‘shock remittances’ sent to families in times of financial and medical emergency or death.
With the ethos of social responsibility built into the model, Mama Money has the recipe, passion and good-will necessary to make a lasting difference in the daily lives of families where every penny counts.
“All too often international remittances form the sole lifeline for a migrant’s family and millions depend on remittances for survival. International remittance is the single biggest financial flow into Africa, exceeding foreign investment and official development assistance (international aid),” said Coquillon.
South Africa is the most expensive country in the world to send out low value remittances, specifically to its neighbouring countries in Southern Africa.
According to the World Bank, the average cost to send the equivalent of $200 from South Africa to neighbouring SADC countries is 18.69%. The global remittance price average is 8.9%.
With a 5% commission fee, Mama Money comes in far lower than all its competitors currently on the market.
The Mama Money transfer service will offer their customers:
• immediate transactions;
• eliminate the need for cash thus increasing security; and
• personalise the process via social media and mobile technology.
Mama Money – A Social Business
Grojnowski’s and Coquillon’s start-up social business is the first cross border money transfer company that is South African born and operated.
“We named it Mama Money because millions of people send money home to their Mamas, who form the backbone of the African family and economy.
“At Mama Money, we approach things quite differently. We want to create a business that tackles a social problem, the high cost to send money home for low-income earners. As a business, rather than just being driven by profit, our model is to be profit – minimising. Also, if the entire market reduces its commission costs to our level, then we have achieved what we set out for,” they said.
During its first phase, Mama Money is focused at Zimbabweans living and working in South Africa.
“With 1.9 million Zimbabweans living in South Africa, the first phase for Mama Money is to focus on the South Africa – Zimbabwe remittance corridor,” said Coquillon.
“By simply registering through a Mama Money Agent, customers are able to send money online using their cellphone to relatives mobile wallet accounts,” he said.
Mama Money has partnered with leading Zimbabwean financial institution, CABS, a subsidiary of Old Mutual, to provide remittance services on the CABS Textacash mobile banking platform.
Mama Money Agent Network – Creating Employment Opportunities
Mama Money has developed an agent network in various locations in and around Cape Town to register and FICA customers for the Mama Money service: Mama Money agents to look out for are:
Gilmore Ropi: Entrepreneur
Ropi, 35, a father of three, left Zimbabwe after his various businesses as a travel agent and retailer collapsed with the Zimbabwean economic meltdown in 2008. Now in South Africa Ropi is working in the construction industry. Ropi is adamant that being a registration agent for Mama Money will help to, with its lower remittance cost, elevate the GDP for Zimbabwe.
“I’m not interested in the politics of my country in any way; it’s about trying to make the best of my talents. We ran away from the economic downfall but having been part of the people who uplift the same economy [Zimbabwe] you can go home with pride.”
Florence Muchuchu: Jack of all trades
Muchuchu, 29, was a teacher in Zimbabwe in 2009 when she started travelling to South Africa to buy merchandise from Chinese markets. She then returned to Zimbabwe to sell her merchandise in order to supplement her teachers salary of approximately R2500 a month.
Muchuchu is now a pre-school teacher and also owns Flo’s Devine Hair and Beauty Salon in Phoenix, Cape Town.
“In September (2013) Matt and Raph sold me on the idea and they showed me how to help the people who wanted to register. I’m here to work and here to earn a living. Hair is a passion but I really want to climb the Mama Money ladder, help my fellow Zimbabweans and have fun doing it.”
Grojnowski and Coquillon have already recruited a full-time start-up team of 25 young tech-savvy individuals. After year one the number is expected to rise to 110 followed by a full Mama Money family of 230 in 2016.
Mama Money – Innovation & Technology
With the rise of mobile technology and an increase of African’s who own cellphones, Mama Money has the ideal platform for an alternative, convenient and cost-effective cash-less money transfer operation.
Grojnowski feels for socio-economic upliftment, cashless money transfer is the way to go. The less money gets left behind with a money transfer operator, the more money arrives in the pockets of the families who depend on every cent to survive. By making the transfer cash-less and employing mobile technology, we can drastically reduce costs.
“To keep up with the modern needs of a fast-paced society embracing technology, Mama Money has opted to step out of the current antiquated model of cash-to-cash transfers, which is slow, more expensive and cumbersome.” “Traditional cash-to-cash money transfer has not changed in over 100 years. It is archaic, expensive and out-dated. Often the receiver has to travel long distances to a city where there are bank or money transfer operators branches. This takes time and money. With the rise of mobile money wallets, especially in rural Africa, we can now overcome this last mile challenge,” said Grojnowski.
Mobile money (such as Textacash in Zimbabwe or M-Pesa in Kenya) has included millions previously underserved by the traditional financial infrastructure in Africa. We are expanding the reach of these wallets to receive money from relatives living abroad.
Electrum Payment Systems is the primary technology partner of Mama Money. Equipped with a ground-breaking custom remittance system, Mama Money is underpinned by the its new generation bank grade technology platform.
“We are tremendously excited about the positive impact they will have on millions of lives, uplifting communities in Sub-Saharan Africa and accelerating social development,” said CEO David Glass.
Post published in: Analysis