Africa's Business Revolution: How to Succeed in the World's Next Big Growth Market by Acha Leke & Musta Chironga & George Desvaux

Author:Acha Leke & Musta Chironga & George Desvaux [Leke, Acha]
Language: eng
Format: epub
Tags: Business & Economics, Strategic Planning, International, Economics, Development, Economic Development, Management
ISBN: 9781633694415
Google: gMxXDwAAQBAJ
Publisher: Harvard Business Review Press
Published: 2018-10-30T15:43:38+00:00

INNOVATION PRACTICE 2: RETHINK YOUR BUSINESS MODEL TO TRULY ENGAGE YOUR CUSTOMERS

Equity Bank’s innovation of turning thousands of shopkeepers into banking agents was a brilliant move to solve the problem of last-mile delivery. That is a challenge for businesses in almost any sector: Africa is a vast continent with generally poor transport infrastructure and big gaps in communications. Many millions of people lack formal postal addresses, or even a street name. While English or French may be the common tongue in the big cities, many rural people speak only their local language—of which there are more than 1,000 across the continent. Nigeria alone has more than 500 languages, Cameroon has 250, and Kenya has 68.

When we met with James Mwangi, he reflected on how his team had shaped the agency banking model: “We asked, how can we use shopkeepers as outlets to serve our customers? It took us six years to convince the Central Bank that shopkeepers could accept cash as banking agents. But once we did, we were able to multiply our network a thousandfold.” As a result, he added, “banking now competes with sugar and salt as a product.” The agency model has also demystified banking. Mwangi says: “Our agents don’t talk to customers in banking jargon—they use the language of the common man.” The agents have benefited too. As Mwangi notes, “We’ve helped those thirty thousand shopkeepers professionalize. They’ve become owner-managers, managing a bank for a commission. That in turn has distributed wealth across the country.”

Margaret Wanjiku, who runs a pharmacy in a suburb of Nairobi, is one of Equity Bank’s many agents. She told us that she typically serves between twenty and fifty Equity Bank customers each day, who mostly make cash withdrawals and deposits. “Around month end, there might be one hundred customers coming in over a couple of days,” she said. That traffic has helped her grow the pharmacy business, too. Customers appreciate the convenience of the agency model. “Equity Bank agencies are just all over, so you can drop in anywhere,” said one customer at Wanjiku’s pharmacy. “It’s really made my business faster and safer,” said another, who runs an informal trading stall. “I don’t have to carry a lot of money from one place to another, because there’s an agent just next to where I work.”

Tolaram, too, has driven fundamental innovation in getting Indomie noodles to consumers throughout Nigeria, starting with its approach to marketing. The company created a TV and radio ad campaign targeted at children. One ad features a young girl skipping down a supermarket aisle to grab handfuls of Indomie noodles packets as her mother, following with the shopping cart, smiles approvingly. “Changing people’s eating habits is not easy,” Deepak Singhal told us. “So we decided to start with the children and go all the way up.” Indomie’s fan club is a key part of this marketing campaign: it has branches in more than three thousand primary schools, which it supports with activities such as art competitions and excursions for pupils and teachers.

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