Tigo Helps Remittances Go Mobile

Tuesday, March 20, 2012



Over the past decade, a Luxembourg-based telecom provider called Millicom has established itself across Latin America and Africa by offering, under the Tigo brand, prepaid phones and expansive coverage to low-income consumers. “When our competitors saw us adding rural communication towers,” says Tigo exec Juan Carlos Arriaga, “they said, ’You’re throwing your money away. Those people won’t have money to buy a phone or a scratch card.’” They were wrong, and now Tigo is the market-share leader in many of the countries it serves.

In 2011, Tigo launched a domestic mobile-transfer program in Latin America, allowing its customers to send cash to one another via cell phone. To ensure easier access to that money, it tapped 1,600 of its prepaid phone vendors to become cash-out points. Explains Arriaga, “We’re using hardware stores, local pharmacies, and big grocery stores. The financial institutions in Guatemala charge 15% to 25%, but our fee is just 6%.” Tigo already has more affiliates than all the other remittance centers in the country combined, and it plans to expand to 3,000 next year.

Source: Fast Company (link opens in a new window)

Base of the Pyramid, financial inclusion, mobile banking