Barclays Motshelo Account

Development of the 1st group savers account in the Botswana Market

Innovation presentation

Background:

For decades African consumers have acknowledged the need to set aside some money for unexpected and emergence expenditures. The challenge has always been the discipline to do this as an individual. In many cases individuals lacked the discipline and could only turn to the community in cases of emergencies like sicknesses, and funerals. In response to the stress in the communities, community village heads started the concept of collective contributions to assist village members in need. The concept developed from larger community based groups to smaller groups comprising of family members, friends or people of similar affiliation like religious groups. For a long time these groups operated informally with nominated group members acting as treasures and keeping the money in their household exposing them to risks. It is estimated that in Africa the collective savings schemes are worth USD10 billion. Barclays identified a need to create a home for these savings balances and provide security for these groups. To this end a Group Savings Account was developed and first launched in Botswana named ‘Barclays Motshelo Account’ named in vernacular to resonate with how this concept is called and understood in Botswana.

The Solution:

The practice of keeping the savings group money at home led to many challenges as these groups lacked a safe place to keep their funds and proper funds reconciliation resulting in disruptions to the operation of these savings schemes. In Botswana alone the market value of these groups is believed to beUSD50 million. The other challenge particularly in Africa was that since these groups consist mainly women who are illiterate, unemployed and un-banked, they could not access a bank account due to lack of formal documentation. In addition, banks have been unable to assist them due to lack of a suitable product for this market.

To provide a solution to the risks faced by these informal savers and ensure financial inclusion, the Barclays Group Savings Account (Motshelo Account) was developed after further engagements with the groups through focus group interviews to understand their financial needs. The Barclays Motshelo account is the 1st of its kind in the market to recognise informal savers and capture the essence of African tradition which is doing things together to achieve a common goal. The account allows group members to access the account for deposits and withdrawals as well as benefit from a free Funeral insurance cover.

Since its launch, The Barclays Group Savings (Motshelo Account) has proved to be a success in the Botswana market with 21,160 customers with a balance sheet of USD2.2M. To date, Motshelo account is still the only account for group savers in the Botswana market.

The Barclays Motshelo account, won the Barclays Citizenship Award. The Barclays Citizenship Awards recognises and celebrates colleagues for their amazing work in their local communities all around the world.

After the phenomenal success in Botswana, Barclays Africa is now rolling out this product to other 11 Barclays Africa markets.

Uniqueness of the project

The Barclays Motshelo Account offer householder savers the opportunity to save together as a group in a formalised and organised way, something that had never happened in the market. In addition, the members are able to enjoy free funeral insurance cover, free deposits and attractive interest rates facilitating favourable return on investment.

The fact that the application process does not require formal registration certificates and constitutions has facilitated opening of this account. This is in line with the Company strategy to penetrate the unbanked market , develop the market and ensure financial inclusion.

This innovation changed the way group savings operated and increased accountability and reduced the temptation for group members to utilise group funds for personal use.

The Reason Behind

Motshelo account was developed and launched to address security needs of the household savers which include risks associated with theft and lack of proper funds reconciliation between members. It was characteristic in Botswana for groups members to fight and take each other to court over missing funds.

The Botswana Police and Central Bank had experienced increasing reports of money theft from household savers and called in the support of banks to provide solutions. Therefore the account offered security of funds as well as aids proper reconciliation of funds. It has promoted and facilitated financial inclusion and development of this market.

Results

Total Number of Customers : 21, 160

Balance sheet : BWP 17 Million (USD 2.2M)

Fee Income : USD 91.5K (annual)

Interest income : USD 62.5k (annual)

The Barclays Motshelo account won the Barclays Global Citizenship Award