Communication and Banking
Before I get started on this week's blog entry, let me thank everyone who helped make the first Barnabas Bear Newsletter a huge success. I am hearing stories of a Chick-Fil-A in New York that printed the newsletter at their cost and gave it to customers purchasing a kid's meal. Another story from California is a church kindergarten that sent printed copies home with all the kids. Thanks to all the folks who sent encouraging words concerning the newsletter. We will continue to do them and I will look at doing them more frequently if we continue to get such great feedback. Those events happened because you, my friends, shared the newsletter with others and shared it with others, but it started with you.
Now to this week's blog. Yes Communication and Banking do go hand in hand here in Tanzania. You see while there are real banks here, they charge for everything. The reason is that unlike more developed countries, where people get loans for everything, it is difficult to get a loan here and therefore the banks have to make their money other ways. So they charge to wire money, put in a deposit, withdraw money, cash a check etc. And these fees are not cheap.
So the cell phone companies decided they could offer a better alternative. The verdict is out on better, but it does appear to be working in that direction. So I have a cell phone through Vodacom, one of the major cell phone companies. They have a system called Mpesa. Each phone company has their own system. Basically I can go to any Mpesa location and give them money and my phone number and they will put the money on my Mpesa account for a small fee (much smaller than the banks) I get a text message telling me the money has been put on my account. Mpesa locations can be anything from an actual Vodacom shop to a person with a plastic table, chair and umbrella that says Mpesa. I tend to prefer "brick and mortar" types though they are normally just slightly more secure than the table and umbrella types. Those that I get to go inside and deal with are my favorites because no one sees me pull my wallet out. So that is how I am "paid" here, FDM USA sends money to the Tanzania accountant who puts money on FDM's Mpesa and then they send money out to everyone who needs to be paid like the nurses, doctor, school teachers etc. Then these folks go to an Mpesa location and withdraw money. Basically you go up and first get them to acknowledge they are open and have money to pay your withdrawel with. You will be amazed how many times they don't have any money on hand. Then you dial up Mpesa and go through the instructions and enter the "till" number for the store and then the amount and your password then confirm. Then they give you money. What you don't see in the transaction is that a small amount of money is deducted from your account and given to the till location to pay them for operating the location. For a 60,000 Tanzania shilling withdrawel it will normally be around 1000 shilling fee. The going rate is 1600 shillings per US dollar.
Now for safety reasons if I have to withdraw a large amount of money, I tend to go to several shops at different times of the day to prevent followers from catching on. Normally I go to the hotel and stash the money somewhere safe in between trips. Fortunately my new hotel accepts Mpesa payments for the month, but I still have to pay a fee to cover the cost of their getting the money out.
It has actually gotten to the point that a current program being offered is to let people use their cell phone activity to count as collateral for a loan at a bank now through the phone companies "banking system." So if you call people several times a day and text all the time you have more collateral for a loan. Not sure who thought this bright idea up, but it sounds like a loan market bubble set for bursting.
I do have a phone here, but since it is fairly expensive to call and text home, I tend to keep it for family and FDM business. It costs about 10,000 shillings for a 15 minute conversation with my parents. Texting is not so bad at around 500 to 1000 shillings.
I also get my cell phone service through Vodacom device called a bombastick or we would call it a USB Modem dangle. I get "unlimited" for a "month" for 40,000 shillings. It is unlimited to 2.5 GB when they slow my speed down and it has only lasted for 28 days at a time.
The speed of such service is normally a low level 3G speed and sometimes only a 2G speed. This means that Facebook and Gmail often do not function as they are supposed to because of the slow speeds and nothing really works at 2G. There is no reception yet in the Yulansoni area so I am not online when I am there.
It is fun at the clinic site to see workers at night wandering around looking for a cell phone signal and then when somebody finds it they all rush there to see if they can get one too. It unfortunately is normally nearby the bathrooms which are latrine types and well I don't need to talk to anyone that bad.
It is probably as funny as me moving through the hotel with my wifi device to use with the bombastick trying to get an actual 3G service. I can connect that device to an auxiliary power source and roam around to set it up.
I also wanted to share one of my rare selfies. I took this as I started my hike to the tree where the bus stops. It is a little more than an hour away and arrives at 7 (sometimes). I am attached to the head lamp-I promise.
Now to this week's blog. Yes Communication and Banking do go hand in hand here in Tanzania. You see while there are real banks here, they charge for everything. The reason is that unlike more developed countries, where people get loans for everything, it is difficult to get a loan here and therefore the banks have to make their money other ways. So they charge to wire money, put in a deposit, withdraw money, cash a check etc. And these fees are not cheap.
So the cell phone companies decided they could offer a better alternative. The verdict is out on better, but it does appear to be working in that direction. So I have a cell phone through Vodacom, one of the major cell phone companies. They have a system called Mpesa. Each phone company has their own system. Basically I can go to any Mpesa location and give them money and my phone number and they will put the money on my Mpesa account for a small fee (much smaller than the banks) I get a text message telling me the money has been put on my account. Mpesa locations can be anything from an actual Vodacom shop to a person with a plastic table, chair and umbrella that says Mpesa. I tend to prefer "brick and mortar" types though they are normally just slightly more secure than the table and umbrella types. Those that I get to go inside and deal with are my favorites because no one sees me pull my wallet out. So that is how I am "paid" here, FDM USA sends money to the Tanzania accountant who puts money on FDM's Mpesa and then they send money out to everyone who needs to be paid like the nurses, doctor, school teachers etc. Then these folks go to an Mpesa location and withdraw money. Basically you go up and first get them to acknowledge they are open and have money to pay your withdrawel with. You will be amazed how many times they don't have any money on hand. Then you dial up Mpesa and go through the instructions and enter the "till" number for the store and then the amount and your password then confirm. Then they give you money. What you don't see in the transaction is that a small amount of money is deducted from your account and given to the till location to pay them for operating the location. For a 60,000 Tanzania shilling withdrawel it will normally be around 1000 shilling fee. The going rate is 1600 shillings per US dollar.
Now for safety reasons if I have to withdraw a large amount of money, I tend to go to several shops at different times of the day to prevent followers from catching on. Normally I go to the hotel and stash the money somewhere safe in between trips. Fortunately my new hotel accepts Mpesa payments for the month, but I still have to pay a fee to cover the cost of their getting the money out.
It has actually gotten to the point that a current program being offered is to let people use their cell phone activity to count as collateral for a loan at a bank now through the phone companies "banking system." So if you call people several times a day and text all the time you have more collateral for a loan. Not sure who thought this bright idea up, but it sounds like a loan market bubble set for bursting.
I do have a phone here, but since it is fairly expensive to call and text home, I tend to keep it for family and FDM business. It costs about 10,000 shillings for a 15 minute conversation with my parents. Texting is not so bad at around 500 to 1000 shillings.
I also get my cell phone service through Vodacom device called a bombastick or we would call it a USB Modem dangle. I get "unlimited" for a "month" for 40,000 shillings. It is unlimited to 2.5 GB when they slow my speed down and it has only lasted for 28 days at a time.
The speed of such service is normally a low level 3G speed and sometimes only a 2G speed. This means that Facebook and Gmail often do not function as they are supposed to because of the slow speeds and nothing really works at 2G. There is no reception yet in the Yulansoni area so I am not online when I am there.
It is fun at the clinic site to see workers at night wandering around looking for a cell phone signal and then when somebody finds it they all rush there to see if they can get one too. It unfortunately is normally nearby the bathrooms which are latrine types and well I don't need to talk to anyone that bad.
It is probably as funny as me moving through the hotel with my wifi device to use with the bombastick trying to get an actual 3G service. I can connect that device to an auxiliary power source and roam around to set it up.
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| selfie at 5:30 AM as I start hike to bus station |
I also wanted to share one of my rare selfies. I took this as I started my hike to the tree where the bus stops. It is a little more than an hour away and arrives at 7 (sometimes). I am attached to the head lamp-I promise.
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