Tigo Tanzania has made another quarterly Tigo Pesa profit-share payment to its customers, amounting to US $1.8 million. Ruan Swanepoel, head of mobile financial services for the operator, said that the profit distribution for this year’s second quarter is 17 percent higher than the US $1.5 million that the company paid in the previous quarter, according to a news report. This is the sixth payment in as many quarters that Tigo is distributing from interest generated from the Tigo Pesa Trust accounts held with major banks in Tanzania. The return to customers is calculated based on the average daily balance stored in their Tigo Pesa wallets.
We have written frequently about the vitality of the mobile money sector in Sub-Saharan Africa. Originally, the unavailability of traditional banking services to large sections of the population, especially in rural areas, drove the adoption of mobile money as an alternate source of liquidity. As mobile money services grew in popularity, competition came to the marketplace, along with rapidly increasing revenue for providers and increasing involvement of traditional banks. As the sector matures, mobile money providers are having to do more to appeal to potential customers, and Tigo’s profit-sharing arrangement is an excellent strategy for retention and customer acquisition for the operator. Distributing interest is bound to boost Tigo’s image and increase loyalty, making it clear to customers that they are not being left out as the industry becomes more and more profitable and mainstream.