1. Lesson Learned

2.  Population: 2,029,307  Population density: 3,5 inhabitants/sq km  Population:  0-14 yrs. – 34,8%  15-64 yrs. –61,4%  65 and over – 3,9%  Population below the poverty line: 23,1%  Rural population: 35%  Literacy rate: 81,2%  People with formal bank product: 49%  People with mobile phone: 61%  Annual remittance: 124 $M (inflows), 145 $M (outflows) High-level macro-economic overview Some Learnings for M-Banking Key highlights about Botswana Macro-economic review  Potential market for unbanked is maximum 600.000 due to the:  Limited size of the population  Already developed financial sector  Botswana has a developed financial sector mainly in urban areas. Rural areas lack adequate financial services (63% unbanked in rural areas) Key learnings With 35% of population living in rural areas, most unbanked, P2P payments from urban to rural and within local communities and G2P may make sense Low population density will make agent roll-out a challenge Market size will likely not enable more than 2 offerings to be viable and critical mass will be key Opportunity to jointly develop both MFS and mobile penetration in rural areas Sources: CIA, CGAP, WorldBank

3. Overview of MFS (Mobile Mobile) Transactional Interactive banking services Direct contact with bank Informational Alerts Account balance & history Bank direct CRM Payment Bill payments Onsite payment/NFC Money Transfer P2P transfer Mobile Banking Transactional Informational Mobile Payment Payment Mobile as a medium Payment Bill payment Merchant payment Remote payment (e.g. : top up) Onsite payment/NFC Money Transfer Domestic transfers International remittance International top up Salary payment Micro-Finance Loans Savings Integration with bank accounts and debit / credit card Mobile Money Payment Money Transfer Micro-Finance Mobile Financial Services Mobile as a wallet ( Mobile used to access bank services ( Mobile as a channel to access payment account Mobile wallet used as a bank account

4. Payments to Electricity, water 7 7 Mobile Wallet (cash-in, cash- out) 1 1 Key Steps 1. Rollout mobile wallet with cash-in cash out 2. P2P money transfer 3. prepaid recharge (17%) 1. Rollout mobile wallet with cash-in cash out 2. P2P money transfer 3. prepaid recharge (17%) 4. Develop services to get critical mass and regular “funding” 5. companies’ payments 6. MFI for loan payments 7. Contracts with utilities to collect payments 5. companies’ payments 6. MFI for loan payments 7. Contracts with utilities to collect payments 8 payment at merchant stores 9. offer remittances in neighbour countries 8 payment at merchant stores 9. offer remittances in neighbour countries P2P Money Transfer 2 2 Social benefits and Pension Payments Social benefits and Pension Payments 4 4 Merchant payment 8 8 Company Payments (supply chain) Company Payments (supply chain) 5 5 Prepaid Recharge 3 3 Loan disbursement and payment 6 6 Basics Corporate/ Institutions Consumer International Remittance 9 9 Full M-Banking Services offer 10 10. Work with FNB to offer a suite of Banking services like Savings Accounts FULL MOBILE FINANCIAL SERVICES - ROADMAP Phase 2 Phase 1 Phase 3

5. CONVENIENCE Ease of access to Agents for Cash in/ Cash Out Ability to make Payments directly using MFS without withdrawing cash Entire Process can be done on a Mobile device Secure Trusted mode No Need for a Bank Account COST Less Expensive in Transaction costs SPEED Real time beMOBILE value proposition

6. beMOBILE - FNBB PARTNERSHIP RESPOSIBILITIES Marketing ► Joint responsibility ► Branding strategy defined and agreed ► beMOBILE has to implement aggressive acquisition strategy ► Recommended role for beMOBILE ► Telecentres to be leveraged ► beMOBILE involved in reconciliation for agent commissions and airtime purchase ► Joint responsibility ► Branding strategy defined and agreed ► FNB has limited involvement ► Limited involvement by FNB, Fully handled by beMOBILE ► FNBB to audit beMOBILE’s KYC adherence and AML. beMOBILE FNBB Customer acquisition Agent network Business operations ► beMOBILE will provide the mobile channel ► beMOBILE will depend on FNB’s technology platform, but can become a technology outsourcer ► FNB to extend their merchant acquiring platform, customize and develop new functionalities to support mobile money offerings Technology ► beMOBILE customer service/call centre to be improved in order to support this new service ► Opportunity to use FNB customer service or to outsource to third party Customer Service ► Marketing and branding of the product ► Acquisition promotions ► Bonuses to agents ► Production of starter packs ► Recruitment, training and management of the required agent network ► Cash management, settlement between partners ► Regulatory reporting ► Reconciliation Description ► Technology platform and mobile channel ► Standard customer service facility provided in a MFS project

7. Headquarters 150 Telecentres Cash Bazar Agents Cash supply agents (cash supplier for other agents only) 187 retail stores 6 warehouses 90 wholesalers Potential of 3.000 locations Key offices 120 post offices 20+ branches 138+ ATM’s 30 petrol stations 30 petrol stations 49 outlets ? locations Sefalana Trans Trident 5 locations Softcell Seipone Podder Super agent PLANNED AGENT DISTRIBUTION NETWORK Current Agent network 11 BTC/beMOBILE stores

8. Tele Centre Key Findings Telecentres Project at BTC Government supported project in remote communities 154 business centers live end of June 2012 Connected to BTC broadband and mobile It offers faxes, scan, printing, phone, internet, airtime and sim card It is managed by communities (2 community supervisors and 2 youth people to manage it) BTC trains and support these 4 people in the development of the Center

9. Mobile Money key lessons Mobile Money key lessons Accessibility Cost Distribution network Speed Trust Instability of the platform Extra costs to travel to the nearest dealer outlet Have a dedicated team Launched with only 8 outlets LESSONS LEARNED CONT Distance to the nearest dealer Partnership model Operator led model

10. KEY CHALLENGES Marketing Bank partnership Agent network/ distribution Business operations Technology partnership Customer Service Description Regulatory compliance Organizational structure Distance to SMEGA outlets (Small/limited agent net work) Cash availability at dealers limited agent net work to cash in/out Agents cannot transfer money from cards to SMEGA wallet as initially proposed Staff buy in of SMEGA system support System reporting tool not user friendly and sometimes not working at all No automation of electronic funding of virtual accounts from real accounts Running a bill payment which is direct competition to phase 2 of SMEGA Failure for the system to do a reconciliation of funds and the balances on people accounts Product cannibilisation (SMEGA & eWallet) Systems had to be manually credited from back end There is no department that manages SMEGA as it is treated as a product like any other i.e. Mascom and Orange have a dedicated team for their mobile money solution Monthly reports not carried out as per a requirement form Bank of Botswana because of system limitations SMEGA financial process unclear Processes never handed to relevant department No strategy for Staff Smega buy in. Customer facing personnel unaware of SMEGA processes

11. THANK YOU