Investing in the Future with Vumi

“An investment in knowledge pays the best interest.”
– Ben Franklin

Promoting Economic Security for Girls in South Africa

At Stellar, our core mission is to leverage education and local knowledge to extend financial access to the 2.5 billion unbanked people worldwide. Mobile economic tools that can span wide geographic areas at a low cost are a critical component of these efforts. And, as we explore powerful ways to alleviate poverty through digital financial services, we need to think in particular about how those tools can reach women and girls.

A groundbreaking project by the Praekelt Foundation takes on both challenges. Using Stellar’s open-source protocol, Praekelt is working on a mobile wallet that allows people to save cash or airtime using Vumi, their messaging platform—think Whatsapp, but open source and designed for the developing world, with a focus on improving the economic security of girls in South Africa.

Why girls?

In the developing world, only 37% of women have bank accounts. Research from Women’s World Banking has shown that poor women are inherent savers, putting away 10-15% of their earnings for emergencies. Due to a lack of financial services, however, they’re forced to save in unreliable and sometimes expensive ways—women often hide cash in their homes, where it isn’t secure, or buy livestock, which can become ill or die.

We believe that low-cost and reliable methods for savings could have an enormous impact on women, as well as on their families and communities.


How Vumi reaches women

When Stellar began digging into this issue, we met the team at Praekelt Foundation, an amazing nonprofit based in South Africa that has been using open-source technologies to deliver essential information and inclusive services to millions of people living in poverty.

Vumi already powers South Africa’s national maternal healthcare program,MomConnect, which sends expectant mothers prenatal health information over the course of their pregnancies. After a successful launch in South Africa last year, Praekelt is introducing the service in Nigeria, Africa’s most populous country. Since its founding, Praekelt’s programs have reached over 50 million people across 15 countries in sub-Saharan Africa.

Personal savings accounts for girls

With a particular focus on formal savings for girls, Vumi’s financial infrastructure allows anyone to open a personal savings account. And cash isn’t the only thing that users can save: you can also deposit airtime, an established alternative currency, and withdraw it later as cash.

Vumi’s savings program, currently a pilot program in South Africa with plans to expand to Kenya and Nigeria, encourages early financial literacy. For many in the program, especially girls, Vumi may be their first formal savings account.

Deposit cash…and airtime?

The few examples of mobile-based banking solutions for youth that focus on traditional mobile wallets have had limited success. In many emerging markets, opening a mobile-money account requires waiting for days after showing ID.

Vumi, on the other hand, fits easily into girls’ lives. With the rapid spread of mobile technology, girls are already familiar with an alternative currency that’s built into their daily interactions: airtime minutes. Because many telecoms firms in Africa and elsewhere transfer minutes nationwide free of charge, airtime is especially useful for sending and receiving small amounts.

Vumi’s pilot program and its focus on girls closely aligns with our core mission at Stellar—financial access for all. Through careful research and measurement, Vumi aims to demonstrate that accepting airtime while also offering incentives and education will result in increased savings and improved financial security for girls.

Girls who are saving small amounts for school fees today could be contributing monetarily in their homes and communities in a few years. We want to start investing in that future now.