TNM’s Airtime Advances service hits almost 20% of its user base in six months – another money service that will spread

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TNM’s Pasavute service is offering short-term, micro loans – Airtime Advances – to a staggeringly large number of its users. The sheer scale of use indicates that users find this kind of service extremely useful. Russell Southwood spoke to Sean Pashley, Net1 Mobile Solutions whose Supa Pesa platform drives the service.

Sean Pashley is quick to make the point that this kind of service is not new. Indeed, there are two or three other big players in the market. So why did they launch the service?:”We noticed that other operators didn’t have a pre-vetting system. They simply offered the loan and this is obviously more risky.”

“We could pre-screen customers based on their behavior: what calls and SMS were made and received. On this basis, we could say only allow them to borrow a specific value. Others once they installed the service, left it to run by itself. There was no CRM. We think we’ve improved the back end business model. For example, we can identify that 80% of the loans are at one denomination level.”

Since its launch in mid March earlier this year, TNM has had more than 20 million air-time advances. Towards the end of September 200,000 TNM subscribers were using the Pasuvate service on a daily basis. This figure equates to almost 20% of the active user base utilising the service every day.  The service is offered in both English & Chichewa ensuring that TNM subscribers can engage in their language of preference. Currently there is an average of 28 loans per user.

The service allows subscribers of TNM to purchase airtime in advance and pay the face value of the airtime voucher at a later stage. A subscriber can purchase one advance airtime voucher at a time and is charged a nominal service fee per airtime voucher purchased.

Pasavute is available via the USSD and SMS channels provided by TNM, and both channels are free to the customer. The TNM subscriber is only charged a service fee when an advance airtime voucher is purchased.

“We carry the costs of the hardware and there is a service charge, either as a percentage of the money loaned or as a flat fee to the operator. In Malawi, users pay 10% of the loan. So your loan is for 50 Kwachas and you get 45 Kwachas of airtime.”

“It allows people to get airtime at any time of the day. The level of trading after midnight is big. But the ‘umbrella ladies’ still get money because you top up in a conventional channel to pay back the money.”

So what happens if a customer doesn’t pay back the loan?:”There’s an agreed period with the operator. If he or she doesn’t pay back in 60 days, they are blacklisted from the Pasavute but they are not cut off completely from using the voice service.”

They are currently close to completing agreements in another seven territories:”Some of the more current deals are around a flat fee with a Service Level Agreement and no revenue share so things are evolving.”

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Digital Content Africa Z24: The South African TV announcer who runs a fashion blog from Moscow which she is going to turn into a business

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Digital Content Africa Z16  - MTN Play Côte d’Ivoire is looking for digital content that will play well on mobile phones

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Nicola D'Elia on Facebook as an "on-ramp" for Africa's first-time Internet users

Raul Martinez, Millicom on digital content in Africa and how it's backing start-ups

Mark Bennett, iSchool on using low cost tablets to change learning methods in Zambia

Babatunde Olaifa on the biggest football website in Africa,

Nkiru Balonwu, CEO, music platform Spinlet on how mobile operators take most of their revenues

John Davies, Intel on ways to connect the last 4 billion people unconnected globally with examples from Kenya, South Africa, India, Bangladesh and Colombia

Bastian Gotter of Lagos incubator Spark on providing services for Africans coming online

Fikayo Ogundipe, co-founder on a Nigerian lettings site like no other

Gillian Ezra, Simfy Africa on launching a music streaming service with MTN in South Africa

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