exploring the challenges being faced in the provision...
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Exploring the Challenges being faced in the Provision of
Mobile Banking Services in Zimbabwe:
A Service Provider Perspective
A Research Report
presented to
The Graduate School of Business
University of Cape Town
In partial fulfilment
of the requirements for the
Masters of Business Administration Degree
by
Emily Mutyavaviri
December 2012
Supervised by: Professor Irwin Brown
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ACKNOWLEDGEMENTS
I would like to thank my supervisor Irwin Brown for his invaluable insights and support
in making this thesis happen. Thank you for keeping me grounded and pointing me the
right way when I went off track.
A very big thank you goes to my family for standing by me during the two years of my
MBA and keeping me going even when I felt I could no longer go on. To my husband –
thank you for believing in and encouraging me on this journey, I could never have done it
without your support. To my son, the best thing about me – mom loves you and she gives
thanks for the understanding you have shown even at such a young age. To my mother,
thank you for inspiring me.
To the interviewees, though I cannot name them here – thank you very much for your
time and for the interesting discussions. Hopefully, this was only a beginning.
And to everyone else who in some way made this MBA journey as rich as it has been,
thank you.
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PLAGIARISM DECLARATION
Modular MBA2011/12 Research Report GSB, University of Cape Town
Declaration
1. I know that plagiarism is wrong. Plagiarism is to use another’s work and pretend
that it is one’s own.
2. I have used a recognised convention for citation and referencing. Each significant
contribution and quotation from the works of other people has been attributed,
cited and referenced.
3. I certify that this submission is all my own work.
4. I have not allowed and will not allow anyone to copy this assignment with the
intention of passing it off as his or her own work.
Emily Tenderai Shingirayi Mutyavaviri
Date: 09 December 2012
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ABSTRACT
This paper seeks to explore the challenges being faced by service providers as the mobile
banking industry in Zimbabwe begins to take off. Semi structured interviews were
conducted with different practitioner representatives based in Harare, and the qualitative
data collected from these was then analysed and categorised using a General Inductive
approach. The main categories of challenges were found to be: Adoption, Technical,
Regulatory Barriers, as well as Lack of Precedence. Several subthemes emerged under
these main categories. The findings are then discussed in light of the Technology-
Organisation-Environment (TOE) framework, and an adapted conceptual framework as
relevant to the Zimbabwean context is then proposed. Education, primarily through
marketing, is then discussed as a major recommendation towards shifting perceptions of
m-banking in Zimbabwe and increasing take up of the service, whist calls are also made
for more collaboration by market players to increase pressure towards the address of the
larger regulatory and technical challenges peculiar to the market.
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TABLE OF CONTENTS
Acknowledgements ............................................................................................................. ii
Plagiarism Declaration ....................................................................................................... iii
Abstract .............................................................................................................................. iv
Table of Contents ................................................................................................................ v
Index of Tables ................................................................................................................. vii
Index of Figures ............................................................................................................... viii
1.0 Introduction ............................................................................................................. 1
1.1 Background and Problem Definition ................................................................................... 1
1.2 The Zimbabwean Context ................................................................................................... 2
1.3 Purpose and Objectives of the Research ............................................................................. 3
1.4 Research Question ............................................................................................................... 3
1.5 Justification and Importance of the Research ...................................................................... 3
1.6 Research Assumptions and Ethics ....................................................................................... 4
1.7 Outline of the Research Report ........................................................................................... 5
2.0 Literature Review.................................................................................................... 6
2.1 A discussion on Mobile Banking and related terms ............................................................ 6
2.1.1 Mobile Banking (m-banking) ....................................................................... 6
2.1.2 Mobile Payments (m-payments) ................................................................... 7
2.1.3 Mobile Money (m-money) ............................................................................ 7
2.2 Configurations and models of m-banking ........................................................................... 8
2.3 Enabling Environment for m-banking ................................................................................. 9
2.4 Gaps in the Literature .......................................................................................................... 9
3.0 Research Methodology ......................................................................................... 12
3.1 Research Approach and Strategy....................................................................................... 12
3.2 Data Collection Methods and Instruments ........................................................................ 13
3.2.1 Validation of Instrument ............................................................................. 14
3.3 Sampling ............................................................................................................................ 14
3.4 Data Analysis .................................................................................................................... 14
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4.0 Research Findings, Analysis and Discussion........................................................ 16
4.1 Research Findings ............................................................................................................. 16
4.1.1 Major Challenges being faced in Zimbabwe .............................................. 16
4.2 Analysis of Findings .......................................................................................................... 16
4.2.1 Adoption ..................................................................................................... 16
4.2.1.1 Preference for cash .............................................................................. 18
4.2.1.2 Low consumer confidence in the banking sector ............................... 19
4.2.1.3 Other negative carry overs .................................................................. 20
4.2.1.4 Limited understanding of the product ................................................ 21
4.2.1.5 Need for substantial training and education/Marketing Challenges ... 22
4.2.1.6 Other factors discussed ....................................................................... 23
4.2.2 Regulatory Barriers ..................................................................................... 23
4.2.3 Technical ..................................................................................................... 27
4.2.4 Lack of Precedence ..................................................................................... 29
4.3 Discussion ......................................................................................................................... 30
4.3.1 The Technology-Organisation-Environment (TOE) framework ................ 30
4.3.2 Adapting the TOE framework to the challenges facing m-banking in
Zimbabwe ................................................................................................................. 31
4.3.3 Putting it all together: Diagrammatic representation of the TOE Framework
as adapted to the Zimbabwean context ..................................................................... 35
4.4 Recommendations ............................................................................................................. 36
4.4.1 Addressing Adoption + Lack of Precedence Challenges ............................ 36
4.4.2 Addressing Technical Challenges ............................................................... 37
4.4.3 Addressing Regulatory Challenges ............................................................. 38
4.5 Research Limitations ......................................................................................................... 38
5.0 Research Conclusions ........................................................................................... 39
6.0 Future Research Directions ................................................................................... 40
7.0 References ............................................................................................................. 41
8.0 Appendices ............................................................................................................ 44
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8.1 Appendix I: Interview Guide ............................................................................................. 44
8.2 Appendix II: Consent Form ............................................................................................... 45
INDEX OF TABLES
Table 1: Interviewee Profiles
Table 2: Technological context in Zimbabwe
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INDEX OF FIGURES
Figure 1: Adapted TOE Framework showing the challenges facing m-banking in
Zimbabwe from a Service Provider Perspective
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Glossary of Terms Used in this Paper
GSMA The GSM Association, a global trade group representing the interests of
network operators (and related service providers) that use GSM
technology for their networks.
(http://www.mobileburn.com/definition.jsp?term=GSMA Accessed 20
August 2012)
CGAP Consultative Group to Assist the Poor
m-banking Mobile Banking
m-payments Mobile Payments
m-money Mobile Money
MMU Mobile Money for the Unbanked, a program funded by the GSMA
MNO Mobile Network Operator
API Application Programming Interface - a specification intended to be used
as an interface by software components to communicate with each other
(http://en.wikipedia.org/wiki/Application_programming_interface
Accessed 4 December 2012
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1.0 INTRODUCTION
1.1 Background and Problem Definition
Whilst access to financial services has been linked to socio economic development
(Claessens, 2006), providing basic financial services to the poor and marginalised
remains a major challenge in all developing countries (Paulson and McAndrews, 1999).
Commonly cited reasons for the exclusion of the poor from formal financial systems
include difficulty or unavailability of access, bureaucracy of formal banking, and a
generally held conception that the poor are not financially viable enough to serve
profitably for the heavily infrastructural banking sector etc. (Hinson, 2011; Paulson and
McAndrews,1999). Given that as much as 90% of populations in developing countries do
not have access to financial services (Hinson, 2011); it stands to reason that developing
economies stand to gain more the more people they enable to access financial services.
In recent years, as mobile phones have become more accessible to even the lowest
income consumers in developing markets1 (Dermish et al., 2012), attention has moved to
how the ubiquity of mobile phones can be leveraged to increase access to basic financial
services (Hinson, 2011; Duncombe & Boateng, 2009). Buzzwords in this arena include
‘mobile payments’, ‘mobile banking’, as well as ‘mobile money’. A notable success story
in this arena is Kenya’s mobile payments system, M-PESA. Whilst there has been much
focus on its runaway success in Kenya2, replicating its success in other developing
markets has not been easy - many have and are trying to, but to date, few have come
close (Dermish et al.,2012; Ngugi et al., 2010).
1 2.6 billion people in the world lack access to formal financial services, yet almost half of these have access to mobile phones
(Dermish et al., 2012). 2 According to the IMF (2011), M-PESA “processes more transactions domestically within Kenya than Western Union does globally,
and provides mobile banking facilities to more than 70 per cent of the country’s adult population. (p.50)”
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Unbanked consumers in emerging markets whose ratio of unbanked mobile phone users
is growing rapidly present a vast opportunity for the development of mobile money
(Beshouri et al., 2010). With an estimated formal banking penetration below 10% against
a backdrop of over 70% mobile penetration (World Bank, 2012 as cited by Matseketsa,
2012), Zimbabwe is one such market. Zimbabwe has recently ventured into the provision
of mobile banking services geared towards serving the [previously] unbanked, and has
witnessed a number of new mobile payment systems going live in the past two years.
Banks and mobile operators in Zimbabwe are paying increasing attention to this space.
Whilst the potential of m-payments/m-banking has been widely discussed (Porteus, 2006
& 2007; Donner & Tellez, 2008;Diniz et al., 2011; Morawczynski 2009; Ivatury &
Pickens, 2006), it remains to be seen whether Zimbabwe will be one of the first
developing nations to be able to follow the trajectory of M-PESA in Kenya and make a
notable success story of this phenomenon.
1.2 The Zimbabwean Context
Historically, banking and mobile communications have operated as two separate
domains, falling under different regulatory frameworks. From a banking perspective, a
significant proportion of the Zimbabwean population is excluded from the formal
banking system. According to the Reserve Bank of Zimbabwe (RBZ, 2007), as cited in
Chipika and Malaba (2011), the majority of bank branches (88%) are found within urban
centers, with only a small percentage servicing rural areas. Coming out of a period of
debilitating hyperinflation, the public remains largely skeptical of formal banking, and
while Zimbabwe is largely a cash economy, most transactions continue to sit outside the
formal banking system. The money that does find its way into the formal system is
usually very rapidly withdrawn, presenting a challenge for the banking sector as a whole.
Financial institutions are being encouraged to extend services to the marginalised poor
and rural communities, a very much neglected segment of the financial pyramid, but for a
variety of reasons, this too remains a challenge (Chipika and Malaba, 2011; KPMG,
2012).
On the other hand, most (at least 74%) people in Zimbabwe have access to mobile
communication services, offered by three licensed GSM mobile operators Econet, Telecel
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and Net One. At 74% penetration, there is still room for growth, and the trend is expected
to continue upward for some time to come (Matseketsa, 2012).
Electronic banking (which includes banking over mobile) is slowly gaining ground in
Zimbabwe. Banks and mobile operators are beginning to come together to provide mobile
banking products to the previously unbanked and marginalised communities
1.3 Purpose and Objectives of the Research
This study is exploratory. It seeks to understand what challenges practitioners in
Zimbabwe are facing as the country begins to tap into the potential and create its own
mobile banking story.
In carrying out this research, the researcher hopes to gain a better understanding of how
far Zimbabwe is in terms of mobile banking, and to particularly hone in on what
challenges, if any, are affecting rate of progress in this area from a Zimbabwean
perspective. Having done this, the researcher hopes to be in a better position to make
meaningful recommendations on how these can be overcome in order to propel the
industry further.
1.4 Research Question
This research will aim to answer the question of “What, from the perspective of the
service providers, have been the main challenges faced in the roll out of mobile
banking services in Zimbabwe?”, and in as far as possible, will seek to make
recommendations to address these.
1.5 Justification and Importance of the Research
Access to financial services remains very low in Africa. In Zimbabwe, less than 10% of
the population have formal bank accounts, and billions of dollars sit outside the formal
banking system (Matseketsa, 2012; Chipika and Malaba, 2011).
From a greater socio-economic point, mobile banking holds out the prospect of fuelling
economic growth by opening up greater and more affordable channels of access to
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financial services for large tracts of the populations that may previously have lacked such
(Porteus, 2006). This has been linked to economic growth and development, and it is
envisaged that it will go a long way in the attainment of the universal Millennium
Development Goals (MDG’s) and bridging the divide between developed and developing
countries. According to Wireless Intelligence, there are currently over 5 billion mobile
connections in the developing world and the figure continues to grow daily. The mobile
industry in Africa is booming – Africa, now the fastest growing mobile market in the
world, recently overtook Latin America as the second largest mobile market in the world,
and future prospects for Africa in this respect are very bright (GSMA, 2011).
Within Zimbabwe, the potential of mobile banking cannot be understated. As
Zimbabwean Mobile Operators, banks etc. venture into this arena, it is hoped that this
research will be of direct practical and applicable value and will form the basis for further
study specific to the Zimbabwean context, which to date is virtually non-existent.
1.6 Research Assumptions and Ethics
This research assumed the following:
Practitioners would find merit in the research
Practitioners would be willing to be interviewed and would find the results of this
research worth the ‘hassle’ of being interviewed
Sufficient response would be gathered across the different service providers in the
industry so as to give a more holistic picture
Interview participants would be willing and able to well articulate challenges they
have faced
In reality, though a number of practitioners expressed interest in the research, some were
not available for face to face interviews. A few confirmed appointments were
rescheduled, two ended up not happening as the interviewees were continuously tied up
when the appointments came up, and others were eventually left out as feedback from the
potential interviewees was not forthcoming. In the end, the researcher was only able to
meet face to face with five interviewees out of the eleven approached.
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From an ethical standpoint, Ethical clearance was sought and obtained from the GSB
Ethics Committee before the researcher went out into the field to solicit interviews.
Consent was sought and formalized before any interviews were conducted, with all
potential interviewees receiving a standard introduction and consent form (Appendix II)
prior to confirmation of interviews. At the point of the actual interviews, all interviewees
were asked to sign and return a hard copy of the consent form. The signed forms can be
availed to the supervisor on request.
Organisations may be wary of sharing information that may potentially expose their
weaknesses if it falls into wrong hands. The researcher was cognisant of the challenges
this could present in terms of getting consent for interviews as well as eliciting open and
honest responses from interviewees during the interviews. To address this, potential
interviewees were formally advised (in writing) that their participation was voluntary,
and that raw data from the interviews would not be accessed by anyone outside of the
researcher, the supervisor and possibly the external examiner. Recordings of the
interviews were removed from the recording device on completion of the interviews, and
in presenting the findings of the analysis, names of interviewees (and their affiliated
organisations) were not explicitly mentioned, so as to protect their identities.
1.7 Outline of the Research Report
Following this introduction, the literature review section that follows presents a broad
overview of mobile banking so as to introduce the subject matter. It will be noted that no
literature specifically looking at challenges of mobile banking was introduced at this
stage. Given the inductive nature of the study, this was a deliberate move so as not to pre-
empt findings on the part of the researcher. Following on from that, the next section
outlines the methodology employed in carrying out this research. Section 4 then presents
the findings of the research, together with an analysis and discussion of these. In the next
section, the researcher then presents her conclusions, as well as suggesting directions for
further research in the area. The last two sections will list the references as well as the
appendices relevant to this study.
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2.0 LITERATURE REVIEW
The following section outlines concepts on the general literature on mobile banking as
has been reviewed by the researcher. It should be noted that this section does not include
a discussion on challenges being faced in other markets as the researcher believed this
would preempt the results of the research, and as such opted to conduct this section of the
literature review once the challenges being faced in the Zimbabwean market were
uncovered. As such, this very relevant discussion is carried out later on in Section 4 as
part of the Analysis of Findings.
2.1 A discussion on Mobile Banking and related terms
Donner & Tellez (2008) discuss the terms m-banking and m-payments as collectively
referring to ‘a set of applications that enable people to use their mobile telephones to
manipulate their bank accounts, store value in an account linked to their handsets, transfer
funds…’(p.319). Below, we enter a discussion into the individual terms, however
corroborating with the authors that indeed the terms are very closely related.
2.1.1 Mobile Banking (m-banking)
The definition of mobile banking is somewhat flexible (Diniz et al., 2011). The GSMA
online glossary of terms alludes to the accessing of a bank account via mobile phones as
well as the ability to initiate transactions from such a device as m-banking (GSMA,
2012). In reference to the same, Diniz et al. (2011) point to the presence of banking
services linked to customer accounts, done via portable devices over mobile
telecommunications networks as characterising m-banking. They make an important
addition in that these services may be offered with or without the direct participation of
traditional banks. Some authors would seem to suggest that when traditional banks are
not directly involved in the pushing of such services, then they fall under the domain of
mobile money (m-money), touched on later in this report, but as Diniz et al., 2011 point
out, the delimitations are not so clear.
Porteous (2006) classifies m-banking as a subset of branchless banking that has the
advantage over other configurations of branchless banking of using people’s [already
accessible] mobile phones rather than investing in more cards, devices or related
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hardware. Branchless banking in the wider sense revolves around the offering of financial
services (by financial institutions) outside of traditional bank walls (CGAP, cited in
Porteus 2006). Porteus (2006) goes on to note debate about whether use of the word
‘banking’ is appropriate for m-banking. This is possibly in light of the fact that some of
the services possible through this platform are not necessarily associated with banking in
its more traditional sense, and do not even necessarily have to be linked to a traditional
bank account.
Terms closely linked to, and sometimes used interchangeably with mobile banking
include mobile payments, and mobile money, both of which are discussed briefly below.
2.1.2 Mobile Payments (m-payments)
Porteus (2006) defines m-payments as ‘financial transactions undertaken using a mobile
device such as a mobile phone’ (p.3). He classifies these as falling under the domain of
m-banking, which seems fitting if we think of m-banking as the provision of banking
services over a mobile device. Such services would inevitably include payment
transactions. The GSMA (2012) agrees with this definition, but also highlights that in
some cases, the distinction is drawn by using this term to describe transactions that are
specifically made as payment for goods or services, whether at the point of sale, or
remotely, thereby excluding other forms of transactions (e.g. balance enquiry) that might
otherwise be carried out via a mobile device. Other authors draw the distinction by
identifying m-payments as those in which a ‘bank is not directly involved in the
instrumental gratification of a service offered’ (Cruz et al., 2010, p.343)
2.1.3 Mobile Money (m-money)
The GSMA defines m-money as ‘services that connect consumers financially through
mobile’ (GSMA, 2009). These allow mobile subscribers (banked or unbanked) ‘to
deposit value into their mobile account, send value via a simple handset to another mobile
subscriber, and allow the recipient to turn that value back into cash easily and cheaply’
(GSMA, 2009, p.7). Diniz et al., 2011 identify m-money as schemes promoted by mobile
operators to substitute cash. What can be seen from both definitions is the close
association between the uses of this particular term (m-money) with mobile operators
(Telco’s/MNO’s). The term does indeed seem to come up more in discussions with a bias
to Telco driven configurations. The GSMA, an association representing GSM operators
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globally, has in fact set up a special programme, Mobile Money for the Unbanked
(MMU) tasked with accelerating access to m-money services to the unbanked.
2.2 Configurations and models of m-banking
M-banking in Africa is still largely nascent, with a number of configurations, platforms,
approaches and business models still being tested for best fit. Models differ according to
key players and the roles being played in a particular deployment (Porteus, 2006; Donner
& Tellez, 2008). Goswami and Raghavendran (cited in Hinson, 2011) discuss the various
possible configurations of m-banking. These may be driven by mobile operators, banks,
third party service providers or any combination of them. According to the GSMA, it is
however not possible for banks and operators to work in complete isolation of each other.
At a minimum, banks need the backbone telecommunications infrastructure from the
operator, and operators need banks to hold the deposits which back up the electronic
values in customer and agent wallets as they themselves are not legally permitted to hold
depositors funds (GSMA, 2010).
Goswami and Raghavendran (cited in Hinson, 2011) also highlight that because mobile
operators traditionally do not own banking licenses, this may limit their suite of payment
options as some services like inter-bank transfers require a bank license. Traditional
banks may find limitation in reaching the very poor owing to the legacy of their
operations and existing cost structures that do not favour small value transacting, whereas
mobile operators in developing economies are more inclined to supporting large volumes
of small denomination transactions given the airtime purchase patterns of most prepaid
mobile subscribers in these economies (Porteus 2006).
In terms of broad classification of m-banking, the most commonly cited is that made by
Porteus (2006) which identified two models of m-banking as:
1. Additive
These simply adding an extra channel to a bank account, usually already existing
2. Transformational
These focus on use of mobile devices to link to financial products that target the
previously unbanked.
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It could be argued that up until recently, attempts at m-banking by Zimbabwean banks
(Cell phone and SMS Banking) have been, and remain largely additive, rotating
previously banked clientele looking for lower costs. The same has been said of South
Africa and other developing countries in Africa in Porteus’ discussion on the enabling
environment for m-banking in Africa (Porteus, 2006), and is echoed in a statement, five
years on, by the GSMA that ‘in practice there are few bank-branded Mobile Money
deployments that target the base of the pyramid’ (MMU Annual Report 2011, p27).
It would be interesting to delve further into this area as one could hypothesise that it is the
telco-driven models that thus far exhibit greater transformational potential in Zimbabwe,
as most Zimbabwean banks have hitherto not been perceived as being for the poor
(MMU, 2011), but such a discussion is beyond the scope of this research, and remains a
possible area for future research. [It would be interesting to see though what, if any
challenges this might have brought to Zimbabwean banks from the perspective of
marketing m-banking services].
2.3 Enabling Environment for m-banking
In his 2006 article on ‘The Enabling Environment for Mobile Banking in Africa’, Porteus
discusses what he believes is necessary for the enablement of these services in Africa. He
describes an enabling environment as ‘the set of conditions which promote a sustainable
trajectory of market development’ (p.4). Porteus identifies legal and regulatory
‘openness’ and ‘certainty’ as being key building blocks for any market, but particularly
for those markets that are still in the earlier phases of market development, as is the case
with Zimbabwe. Other factors that he identifies as having to be present include; rapid
growth in mobile usage, inter network competition, literacy, as well as the presence or
establishment of a strong supporting e-payment backbone (Porteus 2006).
2.4 Gaps in the Literature
From a broad perspective, most work on mobile payments has been done outside of
Africa. The few studies within Africa have focused mainly on Kenya and South Africa
(Diniz et al., 2011). Within Kenya, much focus has been placed on trying to understand
the reasons why M-PESA has done so remarkably well in that market and not had the
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same resounding success rate when ported to other developing markets (Camner et al.,
2009; Heyer & Mas, 2011; Lo, 2010; Mas & Morawczynski, 2009, all cited in Dermish et
al., 2012).
Donner & Tellez in a 2008 meta study of literature in this arena highlight that most
practitioner and research studies in the arena of m-payments/m-banking primarily focus
on predicting or explaining adoption (e.g. Brown et al.,2003) and or socio economic
impact, whilst a few have focused on trying to understand the use of these systems in
different contexts. Duncombe & Boateng (2009) also conducted a meta-study of literature
on mobile phones and financial services in developing countries that bought out similar
results. According to them, application design and adoption studies have received far
more attention than have impact studies as well as studies leaning towards assessment of
actual financial need. Donner & Tellez (2008) go on further to highlight that impact
studies with a focus on the developing world are few; notable amongst these being work
done by Porteus (2007) specifically focusing on the South African context. They urge the
research community to pursue more studies on the ‘context and use of m-banking/m-
payments systems in the developing world’ (Donner & Tellez, 2008, p.321). As part of its
evaluation, this research will briefly touch on the use of m-banking/m-payments in the
Zimbabwean context.
Whilst the latest KPMG ‘Africa Banking Survey’ (2012) acknowledges a surge in
popularity of Electronic forms of banking (of which m-banking is a subset - Porteus,
2006) in Zimbabwe, Very little research (or practitioner) work has been published on the
Zimbabwean context. Exploratory work by Dube, Chitura & Runyowa (2009) focused
on use and adoption of Internet Banking in Zimbabwe, whilst work by Dube et al. (2011)
looked more specifically at uptake of SMS Banking in Zimbabwe. Outside of this, the
researcher is yet to come across any other published literature on Zimbabwean adoption
of any forms of Electronic Banking, least of all m- banking/m-payments.
As Zimbabwe tries to create its own m-payments success story, this research seeks to
explore trends, risks and challenges specific to the Zimbabwean context, and to make
recommendations on how these can be mitigated to allow Zimbabwe to fully exploit the
potential of this phenomenon. In so doing the researcher hopes to add to the body of
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knowledge on how other m-payment success stories can be effectively replicated in other
developing markets, in this case, Zimbabwe.
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3.0 RESEARCH METHODOLOGY
3.1 Research Approach and Strategy
This study was exploratory in nature, and sought to bring out the challenges that are
currently being faced by practitioners of mobile banking in Zimbabwe at the service
provider level. The primary interest of the researcher lay in finding out what have been
the experiences of these practitioners, and from this, drawing out appropriate theory to
add to the body of knowledge, more so within the Zimbabwean context. Whilst other
work has been done along similar lines, examining the challenges facing mobile banking
in South Africa (Ramsamy, 2009), the researcher came across no published study of this
area in the Zimbabwean context. Saunders, Lewis & Thornhill (2009) broadly term
theory building approaches to research as being ‘inductive’, while those that test theory
they classify as being ‘deductive’. This study relied heavily on the analysis and
interpretation of data as supplied by practitioners in the field in order to derive a context
specific conceptual framework where none existed, rather than to test existing theories,
and as such it took on an inductive approach.
Further to that, given the exploratory nature of the research, as well as the intent to draw
on practitioner experience, a Qualitative research strategy was employed for the
collection and analysis of data. Generally, the term ‘Qualitative’ is synonymous with data
collection techniques or analysis procedures that generate or use non-numerical data,
whilst the converse i.e. ‘Quantitative’, is synonymous with data collection and analysis
that generate or use numerical data (Saunders, Lewis & Thornhill, 2009). Other authors
(Bryman & Bell, 2007; Saunders, Lewis & Thornhill, 2009; Silverman, 1993 cited in
Bryman & Bell) do however argue about the appropriateness of this simplified
distinction, as it is not uncommon for research to make use of mixed approaches that
combine both numerical and non-numerical data collection and or analysis. For the
purposes of this research, as both the data collected and the analysis techniques used were
based on non-numerical data, the simplified distinction was accepted as is.
It was assumed from the onset that individual experiences would be expressed and best
captured in unique words. This was found to hold over the course of a number of face to
face interviews with the practitioners as each individual had had their own experience and
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had their own prioritization and categorization criteria for the challenges they faced, even
where challenges were similar.
3.2 Data Collection Methods and Instruments
The target population for this research was all practitioners within the mobile banking
industry of Zimbabwe from the spheres of Banking, Mobile Operator, or Third Party
Service Provision. Regulators were not be considered as practitioners as their role was
taken to be more overseer/regulatory.
A total of five face-to-face semi structured interviews were conducted with different
practitioners involved in the m-banking space within Zimbabwe from a service provider
perspective. The areas of operation of the interviewees were as per Table 1:
Table 1: Interviewee Profiles
Interviewee Organisation Type Position/Area of
Operation
E-Banking
Experience
1 Bank E-Channels Manager 2 years
2 Bank E-Banking Manager 4 years
3 MNO Technical Manager 2 years
4 Third party service provider Executive 8 years
5 MNO Operations, Manager 2 years
Given the researcher’s interest, it was deemed appropriate that the core analysis of this
work be based on speaking to the practitioners themselves and getting their first-hand
accounts. Semi structured interviews were selected over structured interviews as the
intention was to let the practitioners to speak out completely as based on their own
experiences and bring out challenges specific to themselves and their context. Structured
interviews (and other survey techniques that could have been considered) are more
standardised and are conducted according to a specific schedule of often closed or pre-
coded questions which would not have allowed the respondents to express themselves as
freely. Generally, the interviews lasted no more than 30minutes each, and with one
exception, all were recorded and later replayed by the researcher. Field notes were taken
during the course of each interview – these can be availed to the supervisor on request.
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Whilst the researcher maintained a guide of the areas to be addressed in the interviews (as
per Appendix I), there was no set interview questionnaire to be strictly adhered to.
Questions were open ended, allowing interviewees to more freely express themselves,
and leaving room for interviewees to potentially bring up other areas the researcher may
not have thought of that could add to the richness of the research (Brown, Oca &
Stroebel, 2007).
3.2.1 Validation of Instrument
The instrument was pilot tested with one or two individuals in the industry that the
researcher knows personally by virtue of being employed in the banking sector.
3.3 Sampling
Convenience sampling was employed on the basis of convenience of accessibility
(Bryman & Bell, 2007). Only practitioners based in Harare, where the researcher is
based, were approached on the basis of referrals from acquaintances in organisations
known to be offering m-banking services in Zimbabwe. The industry in Zimbabwe is still
nascent, and the potential pool of unique organisations involved in m-banking is limited.
The researcher had hoped to conduct a minimum of seven interviews from across the
spectrum of these organisations. Out of a total of eleven requests for interviews, ten
positive responses were obtained, one did not respond at all. Of the ten affirmative
responses, the researcher was able to meet face to face with five - three remained busy
and continued to reschedule appointments, whilst one went cold after initial discussions
not picking up calls and not responding to email and the other was not able to make time
in the period the interviews were conducted. What was positive was that interviewee
panel included at least one representative from different organisations operating in the
banking, operator and third party spheres.
3.4 Data Analysis
In view of the time limitations of this research, as well as the limited experience of the
researcher, a general inductive approach, as described by Thomas (2006), was employed
for the analysis of the qualitative data collected. This non-technical approach seeks to
condense qualitative data collected into a summarised format, ensuring clear and
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defensible links between this format and the initial research objectives, as well as to
develop theories or models about the underlying structure of experiences evident in the
data. It condenses complex raw qualitative data through the identification and or
development of summary themes or categories in a way similar to ‘pattern coding’ (Miles
and Huberman, 1994 cited in Thomas, 2006), but without delving into the interpersonal
causal relationships that are characteristic of pattern coding. It has been likened to
another famous qualitative analysis approach, Grounded Theory, but differs in terms of
outcome and presentation of findings. Grounded Theory ultimately culminates in the
formulation of theory (including themes), whilst the general inductive approach seeks to
ultimately come out with themes or categories most relevant to the research objectives
identified (Thomas, 2006).
Overall, the general inductive approach, though by no means inferior, is less complex and
time consuming than other methods of qualitative analysis. It easier to use as it is less
technical (does not require in depth understanding of a specialised approach), and yet still
provides a straightforward approach for deriving findings linked to specific questions in
exploratory research.
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4.0 RESEARCH FINDINGS, ANALYSIS AND DISCUSSION
4.1 Research Findings
4.1.1 Major Challenges being faced in Zimbabwe
The aim of the research was to gain an understanding of what have been the main
challenges faced by service providers in rolling out mobile banking in the Zimbabwean
context. A number of these challenges were described in the various interviews
conducted. Experiences differ, as do choices of wording, but the researcher was able to
draw on the general inductive approach (Thomas 2006; Ryan & Bernard, 2003) described
in the Research Methodology section to analyse, group and summarise these as per the
researcher’s understanding.
Whilst various sub themes and sub challenges were discussed, the researcher elected to
classify the main challenges according to the following broad themes:
Adoption
Regulatory Barriers
Technical
Lack of precedence
These are discussed in more detail in the Analysis of Findings section, following which
the findings are then presented in a modified Technology-Organisation-Environment
(TOE) framework (Tornatzsky and Fleischer, 1990) on contextual factors affecting the
uptake of technology innovation.
4.2 Analysis of Findings
4.2.1 Adoption
‘Adoption’ was identified as one of the main challenges facing m-banking in the
Zimbabwean context. Adoption refers to the number of individuals who take on m-
banking services over a particular period in time (Ngugi et al., 2010). According to
Interviewee 4, ‘customer adoption has been quite low’; implying that since its
introduction onto the Zimbabwean market, not as many customers as had been
anticipated have taken on m-banking.
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As a broad theme, ‘adoption’ was repeatedly cited across the interviews conducted as part
of this research. For any socially beneficial advancement to take off, it is essential that it
gain enough acceptance for it to be taken up (adopted for use) by the intended
beneficiaries. No matter how novel it may be, or how much it promises to ‘revolutionise’
lives, unless enough of the people who are supposed to benefit from it come to accept and
make use of it, it just remains a grand idea whose potential cannot be realized.
Emerging from the interviews conducted, some of the characteristics of the Zimbabwean
market that present challenges when it comes to adoption of this new way of doing
banking include:
Socio cultural factors:
o Limited understanding (and consequently, appreciation) of the product
o Cultural preference for cash
o a generally conservative approach to use of electronic channels/low
appreciation for technology
o Need for substantial amounts of training and education/Marketing
challenges
Trust issues:
o Low confidence in the banking sector
o Other negative carry overs such as mistrust in the functionality of
systems, as well as a reduced moral conscience tied to wider occurrence of
fraud and other dishonest practices
Socio- Cultural factors
As with a number of other socially driven services, perceptions of m-banking are
influenced by culture. Venkatesh et al., 2003 (cited in Ngugi et al., 2010), as part of their
Unified Theory of Acceptance and Use of Technology (UTAUT) identify the influence of
society as one of the factors affecting uptake of new technology. It is imperative for the
successful adoption of m-banking that local culture and its corresponding influence on
society be considered when setting up and deploying the service (Bankole et al., 2011).
Culture is something that is deeply ingrained within societies. It influences consumer
decisions whether consciously or subconsciously, and attempting to implement a service
that goes against the grain of what is culturally accepted in a society is tantamount to
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strategic suicide. By nature, humans are fearful of change, and the natural tendency is to
resist changes to the status quo. New technologies that closely align themselves with
existing structures and social systems are more likely to succeed than those that go
against established and accepted cultures and norms (Ngugi et al., 2010; Cruz et al.,
2010). M-banking is no exception
According to Interviewee 1, the biggest challenge she has encountered has been linked to
the ‘cultural change that comes with introducing such a product’. The GSMA (2011)
indicates that given the form of current banking products and services, the adoption of m-
banking calls for ‘significant behaviour change’ (p.42). Interviewee 5 described mobile
banking as being ‘fairly new’ [to this market], whilst Interviewee 1 identified mobile
banking as a ‘new way of doing things…new way of banking’. As she put it, people
normally gravitate to things that they trust; things they are used to, that are part of their
everyday ‘culture’
4.2.1.1 Preferenceforcash
Within Zimbabwe, cash is still king. This market (Zimbabwe) has traditionally run on a
predominantly cash driven basis. Interviewee 3 put it across well in his statement that
within the Zimbabwean market, ‘cash is still the preferred mode of payment’. According
to him, this dominant preference for cash could in fact be hampering the take-off of
mobile payments (a subset of the domain of mobile banking, according to Porteus
(2006)).
Historically - coming out of hyperinflationary period where a marked increase in the use
of officially recognised financial channels for illegal activity (money laundering and
externalization) led to the Central Bank taking a more keen and hands on interest (to the
extent of questioning almost every big or suspicious transaction, even disrupting
payments in some cases) in movement of funds in official channels, Zimbabweans
generally still prefer to use cash for payments. Some would put forward that this is
because cash leaves less of an audit trail than transferring funds electronically, for
example, so it lends itself ‘better’ for transactions people would not really want the
Central Bank, or anyone else poking their noses into. As it became harder to come by
during hyperinflation, cash also become even more ‘liquid’ (as crazy as that sounds) - the
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guy who had cash on him had more clout than the guy who spent all day queuing for a
paltry daily maximum cash withdrawal which in the end could not even pay for the ride
home! With cash, one could trade for foreign currency easier, and one could get scarce
goods as they came across them – one could even sell cash for a profit back then! Also,
because the value of money was constantly being eroded, physical cash in hand was more
‘certain/assured’ than cash reflecting electronically on a bank statement as withdrawal
limits made it nearly impossible to access funds locked in banks and other official
channels.
So whilst Zimbabweans had always generally used cash, hyperinflation could be said to
have amplified this, and cemented the cash culture even more into Zimbabwean society.
Getting this and other ingrained cultural mindsets towards banking to change and getting
Zimbabweans more comfortable with adoption of electronic channels for their banking
still remains a challenge for all players in this space (Dube et al., 2009). This has a direct
relationship to the adoption of mobile banking.
4.2.1.2 Lowconsumerconfidenceinthebankingsector
Interviewees 2 and 4 made mention of the general dissatisfaction and lack of trust that
Zimbabweans have in their banking sector as being one of the challenges negatively
impacting the uptake of m-banking. According to Interviewee 4, the lack of trust extends
outside of just direct banking, going on to include other mobile payments that can be
viewed as extensions of banking. According to him, ‘…people have lost monies in
banks…they don’t trust these banking or extension of banking services…’
Unprecedented hyperinflation as experienced in the Zimbabwean economy in recent
years (peaking 2007- 2008 (Chipika & Malaba, 2011)) burnt a lot of people financially,
socially, as well as mentally - people saw pensions and other savings accumulated over
time wiped out overnight; some had their funds irretrievably seized by the Central Bank,
salaries were locked up behind maximum daily withdrawal limits, bank balances were
‘zeroed’ out when the currency regime changed etc. Keeping money in the bank back
then became almost foolish. Consumer confidence in the banking sector took a huge
plunge downwards. For most, if not all Zimbabweans, had they been able to (had the
Central Bank not intervened and imposed limits on withdrawals), most people would
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have taken their monies lodged in the Zimbabwean banking sector out of their accounts
and converted it to more stable currencies so as to try and hedge themselves against the
devastating effects of the hyperinflation of that period. To date, consumer confidence in
the Zimbabwean banking sector still remains low, though some positive gains have been
made with dollarisation of the Zimbabwean economy in 2009 (Chipika & Malaba, 2011;
KPMG 2012; Matseketsa 2012).
4.2.1.3 Othernegativecarryovers
Tied to the effects of hyperinflation and other experiences, Zimbabweans also carry other
negative carry overs. Having experienced banks and other companies being shut down or
taken over by force, they witnessed the collapse of a number of other social systems –
apart from just the banking system; Zimbabweans don’t trust a lot of other systems, and it
does not take much to create unnecessary alarm. This mistrust extends such that
something as simple as the system going down, even when explained, may lead to
disproportionate panic:
‘something as simple as the system going down…in the traditional banks…customers
understand…these customers [the previously unbanked] do not understand…panic
immediately…becomes so chaotic…’ (Interviewee 5 - from the perspective of an MNO
offering m-money services)
According to other interviewees, the ‘mentality of the old days’ [the days of
hyperinflation which saw the Central Bank redirecting depositors funds in times of
crisis], people are inclined to panic with the mentality that if they cannot access their
funds, then something (sinister) is being done with it behind the scenes.
Another unfortunate effect of that dark time in Zimbabwe was a growth in dishonest
practices and disregard for the rule of law (e.g. dealing in foreign currency on the black
market was known to be illegal, but it was rampant practice, people left honest jobs for
more lucrative, yet illegal, ‘dealings’ etc.). With this, comes another negative carry
over/cultural factor is which could perhaps be described as an erosion of moral/societal
conscience. This could be seen as a major contributor to what interviewee 3 described as
‘fraudulent tendencies by subscribers and agents’. According to him, Zimbabweans
always try to find ways by which they can beat the system and are not averse to trying to
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get away with transacting with money that they do not actually have. Someone with
amount ‘x’ in their mobile wallet will repeatedly try to transfer amount ‘y’ (a larger
amount) just to see if they can get away with it, and if they do get away with it, they will
try it again as often as they can, seemingly without conscience.
4.2.1.4 Limitedunderstandingoftheproduct
According to Interviewee 4, ‘there has been a slow speed in customer adoption…[the]
curve for people to appreciate and understand is taking very long…’
Diniz et al. in their 2011 review of extant academic and practitioner oriented literature on
mobile money and payments identify ‘user adoption’ as one of the main categories of
challenges to the successful implementation of mobile payment systems. One of the
classifications they present in this regard is ‘unwillingness of consumers and merchants
to adopt / Lack of trust’ (Diniz et al., 2011, p.10). Both of these are negatively related to
adoption – the greater the resistance to/unwillingness to use m-banking, the less likely it
is to succeed in any context. As with any service, the rate of adoption plays a key role in
its dissemination. The same authors also highlight lack of knowledge on mobile
payments as being another barrier discussed across the articles they reviewed in their
meta-study. This researcher believes the two are closely intertwined within the
Zimbabwean context. Unwillingness to adopt may stem from a lack of or incomplete
understanding of the product itself – generally speaking, if consumers do not perceive
direct benefit in or understand the relevance of the service in their own everyday context,
they may not be willing to give it a second glance and may not adopt it (Ngugi et al.,
2010; Bankole et al., 2011). Even if they are exposed to material on the same service later
on, they may still not be willing to take it up because they may have already told
themselves it does not apply to them. It must however be noted that adoption is not a
static variable, one may choose to not adopt the service today, but continued positive
exposure down the line may change this and influence subsequent adoption (Brown et al.,
2005)
Comments from interviewee 5 included ‘issues of customer servicing, maybe even
understanding the product itself…(on the part of the agents)’ as well as ‘Customer
side…not very educated…challenges in getting them to understand how to use the
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product’. According to interviewee 3, ‘generally you find even the so called ‘educated’
are finding it difficult to understand the system’. He also made mention of the fact that for
them as an MNO, ‘some people still don’t understand the product to the extent that they
are not interested in registering as customers [for m-money services even though they
are subscribed on their mobile network]…’
Interviewees 3 & 5 also alluded to similar challenges on the regulator side, stating that
the regulators themselves also do not fully understanding the product. These and other
related comments point to a lack of understanding and full appreciation of m-banking,
which in turn would have a negative impact on its adoption both amongst the agents as
well as the end consumers, both of whom are critical elements of the m-banking
ecosystem.
4.2.1.5 Needforsubstantialtrainingandeducation/MarketingChallenges
As discussed in some of the interviews, m-banking presents a ‘new way of doing
things…new way of banking’ (Interviewee 1, 2012). Brown et al. (2003) highlight the
perception of risk as a stumbling block to the adoption of new technologies. People are
generally suspicious of what they do not know, and are more inclined to stick to what
they do know. Zimbabweans are no different. One way to counteract this, and other
factors hampering adoption, is through education. Interviewee 5 points out that
challenges relating to education lie not only with end consumers, but with various other
parties (e.g. agents, regulators etc.) involved in the development of these services.
According to her, there are ‘issues of customer servicing, maybe even understanding the
product itself… (on the part of the agents) …a lot of training and education has to be
done’
Targeting the unbanked sector of the population by its very nature also brings with it the
challenge of communicating with segments for which not much marketing information is
available, and for whom language and literacy may present further marketing hurdles
(Beshouri et al., 2010).
Interviewee 3 spoke highly of one organisation (not his!) in the Zimbabwean setting that
is blazing the trail in terms of educating the public, which he admitted was a major
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challenge for his organisation from inception. Some of the more prominent tactics this
particular organisation has employed in this regard include running various promotions,
as well as distributing their marketing material in all the vernacular languages (where
some organisations, faced with limited budgets, still primarily focus on pumping out
material in English, which while it worked for the ‘banked’ may not make sense for the
‘unbanked’ who may not always be as educated or comfortable with English)
Related to marketing, interviewees also spoke of challenges in penetrating the market,
budgetary constraints, as well as multiplicity of competing products coming onto the
market.
4.2.1.6 Otherfactorsdiscussed
During his interview, interviewee 2 alluded to the generally conservative nature of
Zimbabweans, more so on electronic channels, as well as the challenge of the very staff
members who are supposed to push the gospel of m-banking not being so techno
savvy/appreciative of technology themselves. Interviewee 1 also spoke of the same,
stating that they ‘faced some setbacks in terms of acceptance by staff ‘ and have had to
really push and make continuous proactive efforts to get them onboard.
4.2.2 Regulatory Barriers
Another area that was found to be a major challenge in the Zimbabwean context was that
which one of the interviewees described as being ‘regulatory barriers’. The world over,
regulatory barriers inhibit successful implementation and scaling up of m-banking
(GSMA, 2011).
Emerging from the interviews, some of the regulatory challenges being faced by service
providers in Zimbabwe include:
Lack of understanding of the product/service (m-banking) itself on the part of the
regulator(s)
Time taken as every new feature has to be verified and approved by regulators,
who themselves may not understand or appreciate what the features mean
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Licensing and operational requirements (e.g. requirement to always be in
partnership with a bank, from an MNO perspective)
Lack of full clarity and distinction on roles to be played by the different types of
service providers
Issues to do with ensuring fair play, protecting industries as well as organisations
etc.
Heavy regulation in certain areas as a hindrance/limiting factor to the roll out of
certain desirable features e.g. International remittances
According to interviewee 3, one of the challenges they have faced has been ‘regulatory
barriers posed by the Central Bank and by POTRAZ’, where the Central Bank (aka the
Reserve Bank of Zimbabwe, RBZ) is the regulator of all financial services (banking
included) in Zimbabwe, and POTRAZ (Postal and Telecommunications Regulatory
Authority of Zimbabwe) holds responsibility for regulation of the Zimbabwean Telecoms
sector.
It is widely accepted that the creation and sustenance of enabling and effective legal and
regulatory frameworks is critical to the success of m-banking services in any context. It
follows then that ineffective regulation is one of the challenges to the success of m-
banking (Diniz et al., 2011; Mwangi&Njuguna, 2009 cited in Ngugi et al., 2010; Porteus,
2006). Whilst Weber and Darbellay (2010) in a discussion on the legal issues in m-
banking, discuss m-banking as falling just under the auspices of financial regulation and
seem to imply that Telecoms regulators have no direct part in regulating the service, it is
held by others (Porteous, 2006), and witnessed in Zimbabwe that m-banking falls under
the regulatory domains of both Banking and Telecommunications.
In Zimbabwe m-banking services are regulated by both the Central Bank and POTRAZ.
It has however been pointed out that Zimbabwe, as with most other developing
economies, lacks proper and effective regulation in the field of electronic banking. This
remains a challenge that is affecting the development of mobile banking in the country
(Dube at al., 2011). As described by interviewee 5, a lot of what happens in this space is
still by ‘trial and error’.
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Interviewee 4 made the comment that ‘…regulation… [is] one area that authorities
really need to look at ... technology is happening much faster than these guys
[regulators] can actually cope…’, implying that the regulators themselves were not
always abreast of the latest developments, or that even when they became aware of new
developments, their response rate to technological changes was too slow [such that they
would be quickly overtaken by even later developments while still considering earlier
ones]. This could also be linked up with a comment made by interviewee 5 that
‘…even our regulators; they don’t really know what to look for…’, which would also
present challenges as this implied ignorance may slow down progression of the service as
the regulator then needs to ‘catch up’, as it were, before they can then make what should
be an informed decision on any new features or directions for m-banking. Overall,
understanding the risks posed to one industry (Banking vs. Telecoms) by the other can be
a major challenge for regulators who must quickly familiarize themselves with new
business configurations, technologies, partnerships across industries etc. This hinders the
progression of m-banking (Dermish et al., 2012).
Interviewees 3 & 5 also spoke of the dimension of time taken in getting regulatory
approvals for any new features. ‘…if you go with a new service that you want to launch, it
may take time because they don’t understand the product’. The added dimension of there
being two regulators to ‘report to/consult’ may also add to this. As pointed out by
interviewee 5, ‘This product is kind of fusing Telecoms and Banking’. According to her, it
is possible that issues of goal congruence could arise. In her words - ‘there might not
always be goal congruence…’. Porteus (2006) raises a similar issue, highlighting the
possibility of potential coordination failure across the multiple domains encompassed by
m-banking. However, when asked what would happen if the two regulators were
contradicting each other in any way, interviewee 3 pointed out that thus far it was ‘not
really that there is any contradiction’ between the two regulators (RBZ and POTRAZ).
Licensing issues were also bought up in the interviews – these were classified under the
theme of ‘Regulatory barriers’ as it is the regulators that are responsible for the awarding
and monitoring of the [currently] relevant licenses in Zimbabwe. Lyman et al., 2008
argue that from a licensing perspective, non-banking institutions should be allowed to
offer limited banking services under an e-money license, whilst Alexandre et al., 2011
argue against this, holding that regardless of the configuration of the m-banking service,
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depositors funds should always be held by a regulated bank (both cited in Dermish et
al.,2012). Interviewee 4 indicated that in some countries non-bank players have been
licensed to offer limited banking services independent of banks, whilst in some settings
banks have been issued with licenses that allow them to exclusively operate via
electronic channels. Neither scenario exists in Zimbabwe, where by regulatory law,
MNO’s are required to partner up with banks in order to provide m-banking services.
In the opinion of interviewee 4, these current regulatory requirements may pull back on
the development of m-banking as either one of the players (he spoke of the banks
specifically) may in fact end up being the bottleneck if they are not as ‘progressive, not
as aggressive’ or as willing to take on risk as the other. He believes that ‘as long as the
company has got capacity and required capital…maybe they should be allowed…let the
most innovative people…be allowed to do so’ [without the restriction of requiring a
specific type of partner]. Interestingly enough though, he seemed to contradict himself in
highlighting that regulators also need to protect other incumbent players and industries -
‘protect other industry...if you are a Mobile Network Operator stay there, if you are a
bank, stay there…stay in your core... .
Interviewee 4 spoke of protecting ‘boundaries’, as did interviewee 1 in a discussion on
other issues affecting the industry. Both spoke of defining/clarifying roles for all players
in the space and ensuring ‘fair play’, because if we are not careful, ‘the one with the most
clout will win [the] race’, regardless of who gets quashed along the way. Some evidence
of this can already be witnessed in the m-banking space in Zimbabwe, where one
particular player, an MNO, though not the first to market, clearly has more muscle than
the others, and is in such a powerful position that rumours have even circulated that it
was venturing into financial services and could ‘become the largest bank in Zimbabwe’
(Times Live, 2012), which is very interesting considering it is a mobile network operator,
and thus far, banking has never been its business!
According to Anderson (2010) m-banking in developing markets has the inherent
potential to lean towards the dominance of one platform, notably that of an MNO who
already commands dominance in the said market. Anderson states that from a regulatory
perspective, the two issues that regulators of m-banking in developing markets will have
to consider include ‘Monopoly outcomes’ and ‘spill over effects’ (p.23). Monopolistic
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outcomes would be ‘winner takes all’ type of situations, where, as stated above the
operator with the biggest platform (most likely the one with the largest market share)
essentially ends up in a position where they monopolise the profit across the [m-banking]
industry and render it unviable for other players to continue to offer the service. Spill-
over effects would be closely tied to this ‘winner takes all’ scenario as increased
switching costs of being on any other m-banking platform besides the dominant one
would increase in such a way as to strengthen the position of the dominant player, whilst
continuing to bleed out the other players, maybe even into oblivion. (Anderson, 2010)
Competition protection and ensuring fair play in the industry would fall under the domain
of Regulation. Interviewee 4 also made a comment that ‘most businesses in
Zimbabwe…don’t believe in shared infrastructure’. This in turn brings up the cost of
offering m-banking services, and presents an interesting challenge especially for third
party service providers as ‘Bank A wouldn’t want to come onto the platform because
Bank B is there…’. Players try to outdo the other, or refuse to work with/share platforms
with their competitors, leading to a less than ideal situation where a client may be forced
to sign up for two or more m-banking services across different providers because the
systems do not talk to each other and there is no way to transfer funds between them!
This kills the ‘convenience’ aspect often touted as one of the biggest pluses of electronic
forms of banking, and makes for a harder sell of m-banking services (Beshouri et al.,
2010; Ngugi et al., 2010; GSMA, 2009). It would seem that in this case, ultimately, the
player who has the platform with the most subscribers, i.e. the dominant m-banking
platform is positioned to ‘take it all’ as described previously.
4.2.3 Technical
This being a technology driven product, it goes without saying that technical/system
related challenges would have an effect on its development and subsequent progression.
Some of the technical challenges discussed as being faced in Zimbabwe include:
Mobile network downtimes
System stability and availability
Integration challenges
Compatibility issues
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On the telecoms side, m-banking is ‘affected by network…If network down, can’t have
any services’. In this particular case, interviewee 5 was alluding to the mobile network on
which their platform rides, but this can also be extended to the actual m-banking solution
itself, whether it is hosted by a bank or an MNO, as well as any other IT systems that are
integrated into the m-banking offering. According to interviewee 4 the instability of
platforms is ‘one of the other things that often times kills confidence’. If customers begin
to lose confidence in a particular product or service, they are likely to shy away from it,
and worse still to speak badly to others about, thereby increasing negative perceptions
and turning potential customers away.
According to interviewee 3, they have faced a myriad of ‘teething challenges…general
system challenge… [in these] early days’. Related to the fact that there is ‘no precedence’
(Interviewees 1 and 5), IS systems purchased from other markets may not always take off
in Zimbabwe as they did in other markets. Budgetary constraints may mean organisations
attempt to start out with lesser infrastructure (e.g. smaller servers) than may have been
implemented with in other markets running the same systems, or because no one knows
what to expect the systems purchased may later turn out to be unsuitable for what actually
needs to be done in this market etc.
The stability and availability of IS systems is a big challenge in developing economies.
System ups and downs are not uncommon with new IS deployments in these economies
that may be dealing with multiple other [system affecting] challenges that include erratic
power supplies, limited mobile coverage, lack of adequately trained personnel etc. (Diniz
et al., 2011; Aker and Mbiti, 2010).
These and other system hiccups especially do not auger well for a financial system.
Customers are very sensitive when it comes to issues to do with their monies (Weber &
Darbellay, 2010; Morawczynski and Miscione, 2008). Zimbabweans would seem to be
particularly sensitive post hyperinflation, and post dollarisation as they accustom
themselves to ‘real’ currencies whose value is not as easily influenced as the old currency
(Zimbabwe dollar) that was controlled locally and more prone to manipulation.
Something as simple as the system going down for a few minutes, or failing to send a
confirmatory SMS message within the expected time frame, can send customers into
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immediate panic. As put by interviewee 5, when their system goes down, even for a short
period, ‘these customers [the previously unbanked] do not understand…panic
immediately…our money is locked up in that system and we can’t get it out…becomes so
chaotic…’. Another interviewee also expressed similar comments: ‘if the system is
down…[people] think we are trying to do something with their money…mentality of the
old days’. People have been burnt before, and their confidence is still very easily shaken.
Additionally, in order to increase their perceived usefulness, and thus adoption
(Venkatesh, 2000 cited in Ngugi et al., 2010), it is also essential that m-banking offerings
be well integrated with a number of different systems e.g. national payment systems,
retail systems, utility payment systems etc. As put by interviewee 3, for this system to be
more effective and increase traffic, there is ‘…need to integrate with so many other
systems…’. This in itself presents a myriad of technical challenges. According to him,
some systems being used in Zimbabwe are very old and for example may not have the
necessary API (Application Programming Interface)’s for them to be integrated with
more modern IS systems, some organisations may not be willing to allow direct
connections to their systems, some may be unwilling to pass on data etc. as such, ‘all
those integrations… from a technical point of view…huge challenge…’.
Other technical challenges raised included handset ‘compatibility issues’ (Interviewee 3).
4.2.4 Lack of Precedence
Another challenge that came up in the discussions was that of a felt absence of
precedence. M-banking is in its nascent stage in Zimbabwe, more so the
‘transformational’ kind of m-banking targeting the unbanked (Porteus, 2006). Most
current m-banking services in Zimbabwe purporting to ‘target the unbanked’ were
launched between 2011 and 2012 (Techzim, 2012) – the service is still very young.
Interviewee 1 used the phrases ‘new territory’ as well as ‘new waters with no
precedence…’ to describe her experience of m-banking in Zimbabwe. She also made
mention of the fact that even as an organisation, they have had to put new structures in
place, and create new positions (such as her own), in order to launch this type of m-
banking. In the words of another interviewee, m-banking in Zimbabwe is ‘fairly new, …
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venturing into the unknown, … no precedence…mainly trial & error’, a statement which
again corroborates just how nascent m-banking in Zimbabwe is.
This challenge also tied into some of the other challenges e.g. those challenges being
faced in driving adoption of the product. M-banking is new not only for the service
providers, but by extension, also new to all parties in the ecosystem, which include the
agents, retailers, end users etc. As alluded to earlier, people ordinarily gravitate to what
they are used to and resist what they do not know.
4.3 Discussion
In searching for peer reviewed IS studies focussing in technology adoption and
implementation, the researcher did not come across theoretical frameworks specifically
looking at this aspect at country level, more so in the Zimbabwean context. The
researcher did however come across one framework, Technology-Organisation-
Environment (TOE) framework developed by Tornatzsky and Fleischer (1990) that was
deemed a close fit. Zhu, Kraemer and Xu in a study on the innovation assimilation by
firms across different countries certified the TOE framework as being suited to studying
the take up of electronic business (Zhu, Kraemer and Xu, 2006), of which mobile banking
is part. Consequently, the researcher elected to use this framework as the basis of crafting
new contextualised theory on the challenges facing m-banking in the Zimbabwean
setting.
4.3.1 The Technology-Organisation-Environment (TOE) framework
The Technology-Organisation-Environment (TOE) framework has been widely cited in
IS literature on technology adoption (Zhu et al., 2004; Oliveira and Martins, 2011;
Pudjianto and Hangjung, n.d). Studies citing the TOE framework tend to look at
technology adoption from the perspective of individual firms, analysing aspects of firm
contexts that influence their (firms’) adoption and implementation of technological
innovations. (Zhu et al., 2004).
This framework identifies three broad aspects of firm context that affect technology
adoption as being:
1. Technological context
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2. Organisational context
3. Environmental context,
Wherein the technological context is technologies (both internal and external) that are
relevant to the firm, whether existing within, or available to the firm. The organisational
context looks closer at the institution of the firm itself, looking at characteristics of the
institution and its internal resources. The last context, the environmental context, is an
external view, looking at the space within which the firm operates, more usually the
broad industry, competitive forces, access to resources supplied by others, dealings with
the government and other external parties etc. (Zhu et al., 2004; Oliveira and Martins,
2011).
Taking the firm as one type of institution operating within a certain context, the
researcher offers an extension of the TOE framework looking at a different type of
institution in a different context, in this case, Zimbabwean society within a developing
economy context. The proposed theory is presented in section 4.3.3, but first follows a
discussion on how aspects of the TOE framework were linked to the findings discussed
earlier.
4.3.2 Adapting the TOE framework to the challenges facing m-banking in Zimbabwe
Technological context
Technical challenges discussed earlier seemed most suited to falling under this category.
They were however challenges discussed under other categories that also contribute to
the technological context in Zimbabwe. These were:
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Table 2: Technological context in Zimbabwe
Description of Challenge Related terms in earlier studies
Network Challenges unresolved technical issues (Teo et al. 2006)
Platform Stability and Availability unresolved technical issues (Teo et al. 2006)
Integration Challenges technology integration (Oliveira and
Martins 2008 and 2009)
back-end integration Zhu and
Kraemer 2005
Compatibility Issues unresolved technical issues (Teo et al. 2006)
Conservative approach to use of
technology/low appreciation for
technology
e-business know-how (Zhu et al.
2003);
lack of IT expertise and infrastructure
(Teo et al. 2006);
technology competence (Zhu and
Kraemer 2005);
IS expertise (Lin and Lin 2008)
*all references in this table are as cited in Oliveira and Martins (2011)
Terms that have been used by other researchers relating to this context include IS
Infrastructure, IT infrastructure, ICT Infrastructure, Technology resources (Hsiu-Fen Lin
et al., 2008; Ming-Ju Pan et al., 2008; Srivastava et al., 2007; Gibbs and Kenneth, 2004
respectively – all cited in Pujianto and Hangjung (n.d)).
Organisational [Institutional] context
Zimbabwe itself was taken as the ‘organisation’. The term ‘Institution’ was however
adapted as it seemed more appropriate and representative. Both firms and countries can
be taken to be institutions of one kind or the other.
The bulk of the socio cultural factors identified earlier were slotted under this context, as
was the Lack of Precedence as these are factors specific to the Zimbabwean institution
(organisational context) i.e. they are internal characteristics that are specific to
Zimbabwe. Factors identified as falling under this context were:
Adoption Challenges
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o Socio cultural factors:
Limited understanding (and consequently, appreciation) of the
product
Cultural preference for cash
a generally conservative approach to use of electronic
channels/low appreciation for technology
Need for substantial amounts of training and education/Marketing
challenges
o Trust issues:
Low confidence in the banking sector
Other negative carry overs such as mistrust in the functionality of
systems, as well as a reduced moral conscience tied to wider
occurrence of fraud and other dishonest practices
Lack of Precedence
Environmental Context
The remaining category of challenges, i.e. ‘Regulatory Barriers’, was deemed appropriate
to be classified under this context as regulation is something that is external to the firms
providing m-banking, but is a large part of the operational environment in the Zimbabwe
and plays a critical role in defining competitive forces and other the enforcement of
relevant legislature. As discussed earlier, regulatory issues in Zimbabwe included:
Lack of understanding of the product/service (m-banking) itself on the part of the
regulator(s)
Time taken as every new feature has to be verified and approved by regulators,
who themselves may not understand or appreciate what the features mean
Licensing and operational requirements (e.g. requirement to always be in
partnership with a bank, from an MNO perspective)
Lack of full clarity and distinction on roles to be played by the different types of
service providers
Issues to do with ensuring fair play, protecting industries as well as organisations
etc.
Heavy regulation in certain areas as a hindrance/limiting factor to the roll out of
certain desirable features e.g. International remittances
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Terms that have been used by other researchers relating to this context include perceived
industry pressure; competitive pressure; regulatory policy (Pan and Jang 2008);
unresolved legal issues; fear and uncertainty (Teo et al. 2006); regulatory support (Zhu
and Kraemar, 2005) etc – all cited Oliveira and Martins (2011 ).
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4.3.3 Putting it all together: Diagrammatic representation of the TOE Framework as
adapted to the Zimbabwean context
Putting it all together, the researcher proposes the following diagram as a broad overview
conceptual framework representative of the main challenges being faced by service
providers in the rollout of mobile banking services in Zimbabwe:
Figure 1: Adapted TOE Framework showing the challenges facing m-banking in Zimbabwe from a
Service Provider Perspective
Environment Context
Regulatory Barriers
Institutional Context
Socio cultural factors
Trust issues
Lack of Precedence
Technical Context
Network Challenges
System Stability & Availability
Integration Challenges
Compatibility Issues
Technology appreciation
M-Banking take
off in Zimbabwe
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4.4 Recommendations
In light of the findings discussed above, the researcher makes the following
recommendations broken down by category of challenges being faced:
4.4.1 Addressing Adoption + Lack of Precedence Challenges
The following recommendation is targeted to addressing these two categories of
challenges. Lack of Precedence was put together with Adoption as not much can be done
to change the fact that m-banking is new in Zimbabwe (i.e. lacks precedence locally), but
the researcher is convinced that if more people use the service and become convinced of
its benefits, the fact that it is a new way of doing things will over time be nullified as that
‘new’ way works so well it becomes ‘The’ way to do things. Everything has to start from
somewhere - even the traditional forms of banking were new at some point.
A starting point for addressing the adoption challenges being faced would be to increase
understanding and appreciation of the service and in so doing, to enhance positive
perceptions of m-banking in Zimbabwe so more people begin to make repeated use of it.
As perceptions are shifted, more people can be convinced to try out the service. If this is
achieved concurrent with the address of the regulatory and technical challenges (i.e.
making sure that the service runs well, consumers and industries are protected etc.) and
more people can use the service and have a positive experience doing so, the researcher
believes this will auger well for the propagation of m-banking in Zimbabwe.
As alluded to earlier, a starting point for this changing of perceptions is education.
Educating the key players and consumers on the service itself cannot be overemphasised.
In the opinion of the researcher, whilst addressing all the challenges is important, there
can be no success story for m-banking in Zimbabwe even if Zimbabwe has the best
regulations and best systems, best technologies etc. in place as along as users, merchants
and other key players continue to resist or retard adoption of the service.
Marketing plays a major role in consumer (and in this case agent, regulator etc.)
education. The GSMA 2011 Annual report identifies bringing a consumer who has never
heard of m-banking to using the service, and using it often, as a major marketing
challenge. Marketing is responsible for the message that goes out to the general public.
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To counteract perception of risk and the associated mistrust, and thus push adoption
levels, it is imperative that marketing efforts for m-banking services be geared towards
educating the public and getting them up to speed on what the product is, and as
highlighted by Brown et al. (2003), demonstrating to them the advantages of this service
over other alternatives. Whilst this was made in the context of a discussion on ‘additive’
forms of m-banking (cell phone banking for clients with existing bank accounts), the
researcher would argue that this is also applicable in the case of ‘transformative’ models
of m-banking targeting segments of the population that have previously not been banked
(Porteus, 2006). The previously unbanked need to be made increasingly aware of why
this banking product is for them, and how they, who have so far done without banking
services, stand to benefit from it.
Awareness and exposure, both of which Marketing feeds into, have been found to have
an effect on the adoption (or non-adoption) of a product or service. Essentially, the job of
marketing is to ensure people are made more aware of the service itself, and that more
positive, than negative perceptions of it are created in people’s minds. Where positive
perceptions outweigh negative ones, adoption is more likely to occur (Brown et al.,
2005).
Therefore, the main recommendation for service providers in terms of shifting adoption
of m-banking services in Zimbabwe upwards is to firstly focus on educating the public
[and other players in the ecosystem, notably regulators and agents] on m-banking.
Through this, most adoption related challenges being faced at the moment will be
addressed, more disciples of m-banking created within the market and the product will
begin to sell itself. Word of mouth is a very powerful tool, not to be underestimated.
4.4.2 Addressing Technical Challenges
In terms of the m-banking applications themselves, short of getting the technologies right,
the researcher is not qualified to make specific recommendations on what technologies or
platforms to use. The researcher also holds that some of the issues around the system
challenges are macro challenges (e.g. those triggered by erratic power supplies or lack of
other supporting infrastructure) beyond the scope of recommendations that can be made
in this research as some are national issues. However, the researcher urges service
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providers not to lose heart in this regard. It may be possible that if the players in the
industry come together and combine forces to apply pressure towards the address of
these national issues, perhaps more progress can be made as there may be greater
coercive power than as is the case when individual players all try to make their own
plans.
4.4.3 Addressing Regulatory Challenges
Again, this too may be beyond the immediate control of players in the industry, but again
the researcher would like to suggest that perhaps if players come together and apply
pressure jointly, progress may come at a faster pace.
The researcher recommends however, that in as much as is within their power, players in
the sector must also invest in ensuring regulators are not left behind in terms of what is
happening in the industry. A possible suggestion would be to sponsor one or two
individuals from the regulators to attend relevant conferences/symposiums on m-banking
or if possible, to bring people with relevant know how in from other markets to work
alongside the regulators in crafting relevant legislation etc. However, this may raise
ethical and competitive issues if individual companies with more ability are seen to be
taking the lead in this regard, so again, it may have to be done through some sort of
collaborative effort amongst the players.
4.5 Research Limitations
Perhaps owing to the nascence of the industry, a major limitation of this study is the size
of the sample used in conducting this research. Interviews could only be held with two
bank representatives, two MNO representatives, and just one third party service provider
representative. As such, the results of this study may be limited as these five individuals
may not be representative enough of the industry.
Also, a number of the interviewees had only been specifically involved with the
transformational m-banking (i.e. targeting previously unbanked customers) for not too
long; about two years – though this can largely be explained by the fact that the industry
in Zimbabwe only started developing in this way in the past two years. Prior to that, m-
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banking in Zimbabwe was largely additive, with most banks availing simple SMS
banking services to their already existing clientele.
5.0 RESEARCH CONCLUSIONS
In conclusion, this study profiles some of the challenges being faced by service providers
as they roll out mobile banking services targeting the previously unbanked in Zimbabwe.
These challenges were found to largely be related to Adoption, Technical and Regulatory
hurdles, as well as the Lack of Precedence. Within each of these larger categories, several
subthemes also emerged. As pertains to adoption, most of the subthemes were related to
the socio-cultural context within Zimbabwe. Subthemes identified under Adoption
included the preference for cash, a conservative approach to use of electronic channels, a
limited understanding (and appreciation) of m-banking for the unbanked, and related to
these - challenges in marketing the product. Trust was also found to be a subtheme under
Adoption. Related to trust was the low confidence in the banking sector, as well as other
negative carry overs prevailing in the Zimbabwean setting.
Regulatory Barriers encompassed issues to do with understanding of the product on the
part of the regulators, time taken to obtain regulatory approvals, licensing and operational
requirements, as well as a lack of clarity and distinction on roles within the industry,
amongst others. Technical Challenges were linked to mobile network downtimes, general
system stability and availability, integration challenges, as well as some compatibility
issues. Lack of Precedence was a pervasive category as it was closely related to the other
categories e.g. with no precedent to go on, a lot of what then goes on is trial and error,
errors which may have significant impact on how the market perceives, and thus adopts
the service. Overall, adoption seemed to emerge as the broadest challenge facing service
providers in Zimbabwe.
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6.0 FUTURE RESEARCH DIRECTIONS
This research was exploratory in nature, and it may be argued that it only skimmed the
surface given the abject lack of research specifically on m-banking in Zimbabwe. Whilst
the potential transformational effect of m-banking has been hailed, further research still
needs to be done to establish whether such effects have even begun to manifest in the
Zimbabwean context. In this regard, a starting point for future research could be to
establish IF m-banking is being transformational at all – a broad study profiling
consumers of the product in Zimbabwe would give good indication of this.
It would also be interesting to further examine which models/configurations may have
greater transformational effect in Zimbabwe. There have also not been published studies
done to ascertain the needs of the Zimbabwean unbanked, it would seem that a lot of
what is being rolled out in terms of service is being ported from successes in other
markets, and may not actually necessarily be the best way to serve the unbanked in this
context. This could perhaps in part account for some of the challenges discussed in the
course of this research.
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7.0 REFERENCES
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Dube, T., Njanike, K., Manomano, C., & Chiseri, L. (2011, August). Adoption and Use of SMS/Mobile Banking Services in Zimbabwe: An Exploratory Study. Journal of Internet Banking and Commerce, 16(2), 1-15.
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8.0 APPENDICES
8.1 Appendix I: Interview Guide
1. Establish length of time in the industry, relevant experience
2. Please give a brief description of the mobile banking product offered, launch dates
etc.
3. How has the response been thus far?
4. What would you say have been some of the major challenges you have faced in
deploying this product? How would you rank these?
5. Where do you see the industry going in the next 5 years? General comments on
the industry, thoughts/perspectives
6. Any other issues you may deem relevant?
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8.2 Appendix II: Consent Form
(As adapted from UCT Information Systems Master’s Research consent form)
RE: RESEARCH FOR MBA DISSERTATION, PARTICIPATION CONSENT
FORM
Dear Sir/Madam,
I am a part time MBA student undertaking studies with the University of Cape Town. As
part of my course, I am undertaking a thesis study on the challenges facing mobile-
banking in Zimbabwe. As part of this process, I will be conducting one-on-one interviews
with practitioners in the mobile banking arena to gain relevant insight from their
experiences.
Participation is voluntary, and it will be your prerogative to withdraw this participation at
any time, should you wish to do so, with no repercussions. All data collected is intended
only for academic use and will be available for that purpose only to myself and my
supervisor. Your participation in this study will be greatly appreciated.
The interview procedure and questions have been approved by the GSB Ethics
Committee. Data will be treated with utmost confidentiality. Your identity, as well as that
of your organisation will not be implicitly or explicitly published at any time. A copy of
the study, once complete, can be made available to you on request.
For any further queries feel free to contact either myself or my supervisor as per contact
details below.
Your time and cooperation is greatly appreciated
Sincerely,
……………………………………….
Emily Mutyavaviri (GSB, MBA 2011/12 Student), [email protected]
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Prof. Irwin Brown (Supervisor), [email protected]
University of Cape Town
PARTICIPANT CONSENT FORM
By signing this participant consent form, you are agreeing to participate in the research
project entitled “Exploring the Challenges Facing Mobile Banking in Zimbabwe”
Signature: __________________________________
Date: ______________________________________