How Mojaloop Is Transforming Financial Inclusion Across Africa

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This podcast only exists because of partners like NordLayer. I'm incredibly grateful for the support that helps me deliver these conversations every single day. And one of the things I've learned in those many conversations is that hybrid work has changed everything about how teams operate. People are now working from different locations on different devices and often outside traditional networks. But the one constant here, no matter where people are working, is the browser.

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And it is that balance between flexibility and control that is where a lot of companies are still struggling. So if anything that I mentioned there resonates with you, if it sounds familiar, please, I encourage you to take a closer look at nordlayer.com/browser. But now, on with today's show. What if the future of payments was less about flashy apps and more about making sure people can actually send money to each other without carrying two phones around? Well, my guest today is from the Mojaloop Foundation, and he's joining me in a conversation about part of the digital economy that doesn't get enough attention.

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And as regular listeners will know, I'm very passionate about shining a light on every corner of the world and understanding how technology can improve things. And while many of you listening will take instant payments for granted, I want you to spare a thought for the millions of people that still live with fragmented financial systems, limited banking access, and everyday friction that affects how they earn, how they spend, and how they support their families. So my guest today will bring to life all this through the story of Liberia, where a new inclusive instant payment system was deployed in just seventy three business days. I wanna learn more about that and what it means in practical terms, why interoperability matters so much, how digital payments can open the door to broader financial inclusion all the way across Africa. I think it's a fascinating discussion, this one, because beneath the infrastructure, the code, and the policy, this is really a story about human access, dignity, and giving people better options in their everyday life.

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There's enough doom and gloom out there on your news feed, so sit down with me and we'll have a more positive story on the role of tech in the lives of people all around the world. So a massive warm welcome to the show. Can you

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tell

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everyone listening a little about who you are and what you do?

[00:03:16] - [Speaker 1]
Sure. Thanks, Neil. My name is C Haley. I I work for the Mojin Foundation, what we call the the director of market development. And so what I do is work with work within all of the the stakeholders in their country, particularly the central banks and the national switch operators to help them understand how they might use the Mojudu toolkit to increase financial inclusion in their country.

[00:03:39] - [Speaker 1]
And as a quick on what Module is, Module is primarily an open source software used for building national and subnational instant payment systems. What we mean by instant payment systems is is push payment systems. So then UK, you guys have Faster Payments UK. And a lot of countries in the world since The UK introduced Faster Payments have have started adopting similar systems, things like UPI in India or PICS in Brazil. And there are very few countries that who would go into either have an instant interoperable instant payment system in the pipeline or already live.

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And most of them are looking for ways to to make those systems more inclusive, increase the number of use cases, increase the number of financial institutions connecting to them, and that that's what we do at Margin Loop.

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Love it. And for many people listening, well, maybe tech in the world of banking or quick payments for granted. And a quick stat I read before talking with you today was 1,400,000,000 adults around the world are unbanked. That represents around 25% of the world. So for people learning about Mojuloop for the very first time, how how would you explain the the problems that you're solving in global payments, especially for underbanked populations?

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Because it's something we don't shine a light on in Norfolk, I don't think. So tell me more about that.

[00:05:05] - [Speaker 1]
Sure. You know, and I think you the word you used in the second part is like it was perfect, the underbanked. Yep. And so and there's both unbanked and underbanked. And the first problem that Mojiloop is trying to address is is the people who are underbanked.

[00:05:18] - [Speaker 1]
And so a lot of the people in the world are currently being served by mobile money wallet or or even a micro finance institution or a SACA or a credit union account that offers them some loans or some payment service. But those are largely disconnected. Whereas those of us who are more accustomed to particularly the urban western banked world, we have all of our financial services interconnected and and we're accustomed to that type of world. So that's what to to to have the ability to actually have a very healthy relationship with the the formal financial services industry. Part of that is having them be interconnected.

[00:05:58] - [Speaker 1]
And so bringing the first thing is bringing people who are currently being served by wallets or or SACOs or microfinance to have those accounts be connected into a national payment system is the first priority. And that makes those accounts it makes those people more banked or more included than they currently are. And then the next set is once those accounts are then much more much more useful for people who are largely excluded from the financial serve the formal financial services sector, then then we'll start to see more and more people adopt those services. So that's how we we try to tackle not just the 1.4 that are that are still unbanked, but also those that we consider underbanked.

[00:06:44] - [Speaker 0]
Just to bring to life what we're talking about today, I'd love to bring up real world example. I'm wondering a little research on you guys. I was reading, I think it was Liberia. They've had traditionally been a cash led economy. So what are what were the real world challenges that people face before interoperability?

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And why did it some sometimes mean even carrying two phone phones around just to make payments? Again, many people listening will be completely unaware of the challenges that many have been putting up with for many years.

[00:07:16] - [Speaker 1]
For sure. It's and Ledgeria is an amazing example. And I think what we've seen there is the the transition from from pretty much a cash only economy where traditional banking services that we are accustomed to, like wire transfers where you have to go into a into a branch or even or or cards are are just not suitable. And so with with the introduction of mobile money, you start seeing a growth in the number of people holding accounts, but they had two providers that were largely competitive. And so think about a world for the most of the rest of us where Visa and Mastercard didn't become interoperable with other, and you had to go into a to a merchant and say, do you accept Visa or do you accept Mastercard?

[00:07:58] - [Speaker 1]
And that would mean we would all have to carry around two cards, and all the merchants would have to carry have two two POS machines. And that's what the system was like in Liberia, and actually most countries that we work in, where even with relative ubiquity of mobile money, you still would have to ask a person, do you have this provider or do you have that provider? And if you wanted to be sure that you were going to be able to transact digitally, you had to have two phones, one phone for one provider and the other phone for the other provider. I mean, another thing a lot of people listening might say, well, you just have an eSIM for both providers, but that's that's not the kinds of the the the people that we're trying to serve are those that they're still using feature phones, not people who are who who have an iPhone that allows them to have unlimited number of eSIMs. And so that the the interoperability in Liberia allowed people to to only carry around one phone.

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And it's not just carrying around one phone. It's that you have money locked up in both of those accounts. So it means that the the person who needs to transact, you need to carry you need to carry money in both of those accounts, which means the money you have accessible to you to make a payment is gonna be half than what you would normally have. And so it's not just the the the extra cost of carrying the two phones, it's the extra cost of capital of having your money locked into a place that you can't always use it at. And so we have seen a significant decrease in Liberia in just a few months of of the requirement for people to carry two phones.

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Because now you don't have to say, are you on this provider? Are on that provider? You just have to say, what's your phone number? Much simpler, much much lower cost.

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And I think, again, many people, this thing, the thought of solving a problem like this, introducing widespread change and implementing complex technologies, etcetera, would be incredibly expensive, time consuming, take years to implement, etcetera. But I was also reading that the Liberian inclusive instant payment system was deployed in just seventy three days, which is phenomenal. Feels incredibly fast for national infrastructure. We've all seen bad examples of that everywhere. So what made that speed possible, and and what can other countries and people from other countries listening learn from this approach?

[00:10:20] - [Speaker 1]
Well, obviously, I'd to be able to talk about how the the modular toolkit made that was the only thing that made that possible, and everyone's gonna be able to achieve that with with the Mojulup Toolkit, with Mojulup Open Source Software. And that was obviously a contributing factor. The fact that you don't have to have a negotiation with some central provider to do it. The code is there. It's ready.

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It can be easily executed by even a local service provider. But in this case, I would say that the all we did was have a tool that allowed something like that to happen quickly. In this case, what it really took was incredible leadership from the Central Bank of Liberia that really drove this process. A lot of times what we see with these big government any big government infrastructure projects is that they're they're lost in bureaucracy. And and what we have found was leadership at the central bank willing to say, no.

[00:11:12] - [Speaker 1]
Me as the leader, I am taking responsibility for this, and I'm going to push it forward. And then subordinate leaders at the central bank who also were empowered to to make decisions on a daily basis to ensure that things moved moved forward quickly. And and I think that was by far the the biggest factor in in them being able to move as quickly as they as they could. In addition though, they they also were were also lucky to have hired a technology company that was capable of delivering this complex system for them, like built on Mojaloop with that was really focused on execution. And I think having service providers that are really, really, really focused on execution.

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This service provider was was one of the first Mojaloop service providers that called Fitsworks that came out of Myanmar and was involved in one of our first implementations. And so I think they all coming from Myanmar, I think they also had a really good understanding of of what it was like to work in work in emerging markets. And and I think that their their partnership with the Central Bank of Liberia also made that very possible. But, again, I would like to reemphasize that I the the ability of the the open source toolkit and all the the guides that Mojulid makes available, and it has made it possible for other countries to come close to that seventy three day day record that that Liberia has hit.

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And if we just put the technology aspect to one side for a moment, I'm curious. From the moment the first real money deployment went live and people got their hands on with it, what kind of feedback did you get? And and what does it actually unlock in in practical terms for everyday users, businesses, and fintech innovators that are on the ground in these countries?

[00:13:00] - [Speaker 1]
Well, I in Liberia in particular, again, it it was just very quickly that they not only the the end users, but also the financial institutions were able to very quickly recognize that the the number of errors that happened in the transactions was incredibly low. And this is something that I mean, this is this is one of the reasons that Mojoop was built is that doing low value, high volume transactions that cover multiple types of financial institutions from getting from mobile money to banks to rural small financial institutions, they increase a lot of errors and risk. And the fact that they've been able to from day one, demonstrate that that that they can have such low error rates. I think they have a lot of confidence in the system that made people want to made people willing to be able to transact over it. And and so they've seen a rapid growth of of transactions in Liberia.

[00:14:00] - [Speaker 1]
But what Liberia would the the real unlock for Liberia and for for other countries that are using Mojuloop or any inclusive instant payment system, is actually going their ability to add additional use cases and additional services as the the system rolls out. So now just being able to do the the transactions between two different mobile money operators seamlessly is definitely a huge benefit. They very quickly were able to also roll out for all government payments to go through the system. So anytime the government was willing to pay a citizen or one of their employees, then that was pushed through the system digitally as well. So all all payroll is now going through the system.

[00:14:44] - [Speaker 1]
And they were able to add that in just one more month after that. The next is to roll out government to person payments so that taxes can be collected, fees can be collected much more seamlessly, lowering the cost for the government, but also lowering the the pain for the the citizens to be able to actually transact with their government. Then after that, they're gonna be looking at cross border payments. Liberia most countries that we work with rely heavily on particularly inbound remittances. And so their ability to have people wanting to send money into their country at a lower cost is also going to dramatically increase, again, through a centralized infrastructure that lowers the cost for everybody involved in the transaction.

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And then it gets that's gonna be the big unlock is having all of their transactions going through this public utility lowers the costs of all types of transactions. It makes the rails ubiquitous and allows businesses to build better use cases without having to think about how does the actual money move from point a to point b.

[00:15:47] - [Speaker 0]
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[00:16:22] - [Speaker 0]
So please visit denodo.com. And when we hear words like interoperability, they're often talked about in very technical terms. But, again, what does it mean in everyday life for someone using MTN or Orange in Liberia? Anything else that it changes around how money moves between people? You've got some great examples there.

[00:16:43] - [Speaker 0]
Just curious if there's any others as well.

[00:16:45] - [Speaker 1]
Well, I think I and then the biggest one is eventually gonna be the biggest unlock is is merchant payments when when we talk about how money moves. In the end, if we look at how people remit money between each other with whether it's to their family or or friends or or what or or whatever it might be, it's still a a a low number of transactions compared to the number of merchant payments that people make on a daily basis. And and in in our part of the world, we we think about we don't think about that in the in in Europe or in the West because we use credit cards for almost everything when we when it comes to merchant payments. But that's not true of most people in in Africa and Asia and and Latin America where where for most particularly small transactions, it's still cash. And so once we get to the point where people are actually able to transact and and do all of their merchant payments through these platforms, the amount of cash in circulation can significantly reduce.

[00:17:46] - [Speaker 1]
And people can actually go out and do their shopping and even whether it's to whether it's going to a Starbucks or whether it's going to a street merchant, they know that they're gonna be able to transact digitally. Because they know that even though all of their money is in an orange wallet, they know that that the the merchant will be able to accept it whether they're with NTN or Orange or a bank or or or whichever financial service provider. And and I think that kind of mental ease of knowing when I leave the house, I don't actually need cash to do all the things I'm gonna have to do is just a a fundamental change in how people how people approach their daily lives.

[00:18:29] - [Speaker 0]
And I think the success of any tech solution, no matter how great it is or how many problems it solved, is often determined by adoption. And in Liberia, I think you've already reached over 50% account ownership largely through mobile wallets, which, again, is incredible. So how does a system like this build on that progress and and move the country closer to to real financial inclusion, which was obviously the the big mission from the outset?

[00:18:55] - [Speaker 1]
Great question. I think the question itself brings up the point that the the drivers of the initial drivers of financial inclusion have been the mobile money providers, and we need to absolutely recognize that. And that they're the ones who actually opened up all these accounts and gave people the initial services that they needed. And now it's a matter of giving people those additional services. A wallet on MTN does a great job of allowing you to transact with somebody else who has an account on MTN, or merchants or billers who have agreements with MTN.

[00:19:30] - [Speaker 1]
And that's a great thing. Now the next step is making sure that that that account can now transact with anyone. Anyone in the country, anyone out of the country. And so and a a particular part of that is moving from now that those people are are are actually starting to be included with a payments account or transaction account. It's actually moving towards making sure that they have other tools that enable their financial health, in particular savings and also productive credit and and income smoothing credit as well.

[00:20:10] - [Speaker 1]
And obviously, we're not as interested about consumption credit because that can actually lead to over indebtedness, but but in particular that that that that safe credit and and that that ability to put money into savings that allows people to actually stabilize their their income flows and and and particularly, hopefully, grow their improve their financial health. A a transaction account doesn't actually do that. And so by having these making these transaction accounts more connected into the rest of the financial ecosystem, the people who are currently only included with a transaction account and increase their financial their financial health and and in many cases, out of poverty.

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And you're also involved in similar initiatives across Africa, including Rwanda and The Gambia as well. So from your perspective, everything you're seeing and hearing here, what what kind of patterns are you seeing across these markets? And how could the model maybe shape the future of digital payments across the continent? It feels like an exciting time and lots of opportunities here. But what are you seeing and hearing?

[00:21:20] - [Speaker 1]
It really is. I think that this is definitely not something that that Mojo Loop is driving. This idea of having inclusive instant payment systems that allow every account in the country to be connected in every account in the country is actually something that's a demand coming from every African market that we've seen. Every central bank has a strategy to adopt this type of of national infrastructure, and some are well on their way already. And what we're seeing, you know, so for across the continent, what we're seeing is the ones that were the early drivers of this movement have started to realize that their platforms aren't they had a great vision, but they haven't maybe not haven't been able to achieve as much as they wanted to.

[00:22:00] - [Speaker 1]
So a lot of them are looking at revamping their platforms to make sure that they can lower their costs, increase their operational efficiency, and reach more use cases and more more more citizens. And then others who are realizing that some of the other financial market infrastructure that other that central banks have built aren't required anymore or aren't as urgent as this kind of instant payment system. So I I would say there I don't think there are any countries that we've seen across Africa that are not currently in the process of building or improving their instant payment system. The cool thing that we'll be seeing in in my opinion is once we get every country having an inclusive payment system, and and many of them built on either directly on Mojulupuran, some of the Mojulup principles and and transaction, say, transaction, like, flow principles, is that the interoperability between countries becomes much more seamless. And that can increase the amount of trade that's happening across across African countries without having the money to needing to flow through New York.

[00:23:13] - [Speaker 1]
And something's very very rarely known is that when if I'm if I'm here in Rwanda and I'm trying to send money to Kenya, likely my bank and the Kenyan bank is going to are actually going to settle that money in US dollars based in New York. And that increases a significant they it will grand drastically increases the cost of that of that transaction happening. Whereas if these if these domestic infrastructures can be built in similar ways and we can come up with better ways of doing forex and settlement between these national infrastructures, we're gonna significantly reduce the cost of cross border transactions between intra African cross border transactions that is gonna drastically grow African cross border trade.

[00:24:07] - [Speaker 0]
And for anybody listening anywhere in the world, wanna hear more about this. It might impact them and their region or people interested in talking with you guys. Where where would you like me to point everyone listening to that?

[00:24:19] - [Speaker 1]
I mean, you know, you can go to our website at mojolub.io and and check out the the docs that we have there. And whether you're looking at the the docs of the the all of the code, you wanna just dig through the code yourself, or even some of the tools that we have about how to go about building an an inclusive instant payment system. And there you also find all of the the contacts for everybody on our team who who is is able to help you out. And lastly, we got a pretty active community of of payments experts across Africa, across the world. Most of them are very active in our Slack workspace.

[00:24:54] - [Speaker 1]
So, again, going to our website, you'll be able to get access to our Slack workspace where where we have a lot of community conversations.

[00:25:02] - [Speaker 0]
Well, I'll add links to everything that you've mentioned there, and I do encourage people listening to go check you out. The end of every episode, I always say technology works best when it brings people together, but you're taking that a step further, increasing financial inclusion by ultimately empowering organizations to create these interoperable payment systems that enable a digital financial service for all. And I commend you for what you're doing here. I'd love to stay in touch and see how you continue to evolve. But more than anything, thank you for sharing your story today.

[00:25:33] - [Speaker 1]
Thanks, Neil. It's been a pleasure.

[00:25:34] - [Speaker 0]
I think one of my big takeaways here is just how easy it is for many to overlook the payment systems that are sitting behind daily life until that is that you realize just how many people are excluded by them. And I think Steve did a great job today of showing that interoperability is not some abstract banking term. It actually means fewer barriers, lower costs, less dependence on cash, and far more freedom in how people move their own money. And when you hear what is happening in Liberia and the wider momentum building across Africa, you get a real sense that this is much more than just faster transactions. It's building financial systems that work for most people.

[00:26:19] - [Speaker 0]
And if you enjoyed this conversation, make sure you check out the Mosier Loop Foundation and learn about the work that they're doing. And as always, let me know your thoughts. How often do we stop to think about the payment rails that quietly shape so much of our everyday lives? And wherever you are listening in the world, please, I'd love to share your story too. So pop over to techtalksnetwork.com and let me know your story.

[00:26:46] - [Speaker 0]
But that's it for today. A massive thank you to my guest for really bringing this topic to life today. And thank you to you for listening to this podcast, but staying right through to the end. It means a lot. Okay.

[00:26:59] - [Speaker 0]
That's it for today. I'll speak with you tomorrow. Bye for now.