Wizzit, the virtual cellphone bank, has discovered an untapped market in farmworkers. In the past three months, Wizzit has opened 4 000 accounts for farmworkers across 60 farms. The success of Wizzit in tapping this market shows that a focused, small bank can deliver cost-effective banking to low-income earners while delivering superior service to customers.
While the farming community may be opening new opportunities for the bank, Wizzit is also making a significant difference to the lives of farmworkers, the lowest paid workers in South Africa — exactly the type of people the government had in mind when demanding increased access to banking.
Farmers such as Marisa van der Heever in Mpumulanga were desperate to find a bank that provides workers with accounts. This was not some altruistic motive to improve banking in rural areas, but driven by practicalities. Every Friday afternoon, farmers and their workers are targets for criminals who know that the farmers will be carrying tens of thousands of rands to pay their workers. By getting their employees banked, farmers can simply transfer the money into their bank accounts — a safer and cheaper option.
According to Van der Heever, low-cost solutions by other banks had their complications. One bank required a R50 minimum balance which, as Van der Heever points out, is a lot of maize for a worker. Most bank accounts cannot be left dormant, which is a problem for seasonal workers, and there were also issues with workers having to go into town to open accounts during banking hours — which was a production cost to the farm.
Wizzit responded by sending in employee Beyers Coetzee on a two-seater plane. Within an hour he had signed up all 54 workers, one at a time, and no production time was lost.
While getting their workers banked may be purely self-serving, the effect it has made on the farmworkers has vindicated the government’s drive to increase the number of people using banks. According to Van der Heever, once the workers have built up confidence in the bank, they start to save. “I recently discovered that one of my workers had saved R1 200,” she says, which is pretty impressive when the minimum wage rate for farm workers in the region is R850. However, overcoming both basic and financial illiteracy is a challenge. When dealing with mostly illiterate customers, service levels have to be higher than with other account holders, but this costs money, which is one of the reasons the big four banks are losing tens of millions of rands on Mzansi. Wizzit MD Brian Richardson admits that at this early stage it is not making money from these accounts, but the key is to increase transaction levels, which requires education.
Banna Botha, who oversees the Groblersdal region, returns each month to the farms to sign on new farmworkers and educate the existing customers on the product. “I take them into town and show them how to draw money from the ATM and how to do cash back at the stores.” Cash back is where a customer can draw any amount of cash from a store for R1,99. Compared to the R13,95 that it costs to draw R1 000 from an ATM, this knowledge is a real money saver.
And as Botha works on commission, it is in his interest to service his customers. Farmers who understand the safety and cost benefits of having their employees banked pay them extra to cover the costs of banking transactions, so it’s a win-win situation for employer, employee and Wizzit.
As a spin-off, Wizzit is making money out of cost-conscious farmers moving their own bank accounts to Wizzit. Botha recently met a farmer who had spent R286Â 000 in bank fees in one year, mostly due to the fact that he drew cash to pay his workforce. Farmers are even using their cellphones to buy tractors, which is pretty smart when you consider that Wizzit charges a flat R1,99 per transfer irrespective of value.