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We have had the chance to talk with Mr. Desire Tohouri, CEO of SEWA GROUP SA, Chairman of the Board of Directors of SEWACARD INDUSTRIE SA in Senegal, Chairman of the Board of Directors of RICHILD INVEST SA in Senegal about financial inclusion and securing payment transactions.

Desire, we have been talking a little bit about different aspects of payment solutions and the financial sector in general in Senegal and other African countries. With your experience as a consultant and project leader for GIM-UEMOA – a regional regulator body of electronic banking for West Africa, you have an in-depth understanding of the conditions, obstacles and opportunities for banking in Africa. Could you give us a short description of how your work for GIM-UEMOA lead to the founding of SEWA?

GIM-UEMOA is the regulator of electronic banking in the WAEMU zone and the interbank electronic banking switch of the banking community. GIM included at the time 108 member banks when I joined it in February 2011 as SPOC of Supernet Technologie Africa, the provider of the technological platform of the GIM-UEMOA mobile banking solution named GIM-Mobile.

GIM UEMOA, which is in charge of promoting financial inclusion through the development of electronic transactions solutions for its members, has deployed a mutualized electronic transactions platform for its members who do not have their platform. This has allowed bank customers to access a credit card at a lower cost. But after several years, the GIM realized that the penetration rate of the bank card did not exceed 3% within the population of the zone. At the same time, it was found that all households had at least one telephone.

The idea of a more inclusive mobile payment solution than the card was quickly found. An Indian solution was preferred by GIM-UEMOA because of the similarity of development and living standards of unbanked populations in Africa and India. We thus developed and completed the deployment of the GIM-Mobile in production in 2014.

To ensure the availability and accessibility of GIM-Mobile, we had the choice of a multi-channel application (Wifi, GPRS, USSD, SMS, …)

But the simplest and most democratic channel was the USSD of the telecom operators, which we did not really succeed in implementing because of the unwillingness of the operators to see GIM-Mobile as a competitor to the operators’ mobile money offers.

As GIM-Mobile Project Manager, I ended my mission at GIM-UEMOA after having coordinated the implementation of pilot banks in Senegal and Cote d’Ivoire and the training of back office and front office staff.

Beyond the obstacles to the democratization of GIM-Mobile for the implementation of the USSD channel, the mission to promote financial inclusion at GIM-UEMOA faced several other important challenges that had to be addressed. I, therefore, had the idea of developing my own electronic banking platform to address these challenges. A financial transaction platform based on prepaid bank cards that I named SEWA which means : The family, the community in Central Africa, the good service in India, the treat you give to the one you love in Cote d’Ivoire, and so on.

What services and platforms does SEWA provide and in which locations and could you give us a short introduction to the company?

When I left GIM-UEMOA, I recruited a team to develop the SEWA platform. I then created with some friends a company to operate the electronic payment platform. The company SEWA GROUP SA was thus created in Abidjan in 2014 with a branch in Dakar which obtained a banking agreement to operate legally. We then created in Abidjan a commercial subsidiary SEWA Business & Services SA in charge of the commercial exploitation of the services of the SEWA platform and Senegal an industrial subsidiary SEWACARD INDUSTRIE SA in charge of the production of bank cards and multiservice cards and electronic payment terminals.

A – SEWA BUSINESS & SERVICES SA is a company under Ivorian law created in November 2016, with the purpose of: 

1. The implementation of technological solutions for electronic financial transaction services,

2. The distribution and commercialization of electronic banking products and services, Mobile Banking, and E-Banking.

A subsidiary of the Fintech SEWA GROUP, SEWA BUSINESS & SERVICES is an integrator of banking and local financial services. The company offers digital financial solutions addressing the following issues and challenges

– Financial inclusion

– Inclusive insurance (E-Insurance)

– Electronic banking (E-Banking)

– Digitalization of payments and collection of funds, etc.

Wishing to mark its commitment to the development of financial inclusion in rural areas and more specifically for farmers, the company has, from the beginning, been associated with major projects in the agricultural sector.

By joining forces with our microfinance partners through the SEWA E-Banking solution, we have been able to transform our SEWA Authorized Points of Service into advanced digital branches for financial institutions. This allows farmers to securely access basic banking services from their homes:

– Bank account opening

– Cash deposit/withdrawal to a bank account

– Deposit/withdrawal to bank account via SEWA bank card

– Request for bank credit

B – SEWACARD INDUSTRIE SA is a company under Senegalese law created in November 2016. SEWACARD INDUSTRIE is a manufacturing plant for Multifunction Banking Cards and Biometric Identification Cards, including an assembly unit for solar and biometric electronic payment terminals (EPT).

The company is located on a secure site of 10,000 square meters in the heart of the Diamniadio International Industrial Park, 30 km from Dakar, 20 minutes from the port of Dakar, and 15 minutes from the new airport.

Sewacard Industries benefited from a German ECA financing initiated by Maveg Industrie, Ratingen and granted by AKA Bank with Euler Hermes cover for a total amount of 25 million Euros in two phases, of which 9 million Euros were disbursed. The plant has a production capacity of 1 million cards and 300,000 POS terminals per month.

What are the major obstacles to the further expansion of digital payment services and how can companies like SEWA help to ensure financial inclusion in Africa? 

The main obstacles are related to a lack of necessary infrastructure.

– Bank branch networks are concentrated in urban areas with their ATMs and payment terminals.

– A large majority of the population does not have access to the internet

– And for the rest, there is no telephone network coverage. Some populations do not even have access to electricity supply. 

– Beyond the technical aspects, there is also illiteracy which is a cause of financial exclusion.

The idea of SEWA was therefore to provide an answer to each of these challenges. The SEWA platform offers several major services:

– Opening a bank account in rural areas. 

– Benefit from microcredit and make repayments without having to go to the bank in town. 

– The bank manages the repayment of the microcredit in complete security through the SEWA platform, which also handles the management of payment issues.

– Hold an international visa bank card in rural areas and make secure card transactions without ATMs or bank terminals.

– The SEWA platform also offers a mobile application linked to the bank card and which allows making mobile payments by debiting the card to make card to card, card to cash, or cash to card transfers. 

– For areas not covered by connectivity, Sewa offers an offline transaction solution

– Sewa offers voice reading of amounts in local language and authentication of transactions by fingerprint for illiterate people.

– Where there is no electricity, we offer terminals with a solar charger.

You were talking about the difference between mobile and card-based payments. Could you please elaborate on why this is an important differentiator in your market and what’s the impact on the consumer side?

The customers of a mobile money platform of a telecom operator have the advantage of having an easy-to-access mobile payment solution without any communication costs thanks to the free USSD channel of the telecom operator. But the banking system remains blind to all these transactions of the telecom operator’s customers. They have no identity in the financial banking system. 

SEWA’s solution is based on prepaid international bank cards that give a bank identity to each user.

Our solution has the following advantages:

– Clients’ assets are guaranteed and secured by the banking system 

– Clients’ assets are available everywhere, in rural areas as well as abroad

– Customers can pay anywhere in the world

– The financial system has the traceability of the operations and can make exploitation for statistical purposes of governance.

– We do pre-banking of the unbanked population

Last but not least I understand that innovation and digitization may be more difficult to implement in African countries – also due to the comparably lower availability of venture capital. Could you allow us some insights into the conditions and needs of local innovators like SEWA? 

Apart from industry, which offers the possibility of pledging equipment and real guarantees, services seem so volatile that it is difficult to obtain financing to develop all the innovative solutions we have in mind.

A guarantee fund that could accompany the implementation of innovative solutions that have a real impact on the lives of excluded populations would be welcome.