Tigo Building Mobile Financial Services Portfolio
Mobile operator Tigo is one of four new partners for insurance company Bisa Seguros y Reaseguros to sell traffic accident insurance (Seguro Obligatorio contra Accidentes de Tránsito - SOAT). The insurance will be sold through Tigo's m-banking service Tigo Money, which has 213 retail points across the country. Tigo is at the forefront of Latin America's mobile money market and BMI believes it is a key company to watch for strategy on operating m-payment services.
|Potential For MFS Expansion|
|Bolivia Mobile Forecasts, 2011-2018|
Although Tigo is the second largest player in the Bolivian mobile market, the company is the market's leading innovator. With financial backing from regional player Millicom International Cellular, Tigo has launched a number of new products in the Bolivian mobile market. The World Bank's Financial Inclusion Database shows that only 28% of the population has an account at a formal financial institution and only 10% receive their wages using an account. These low indicators show the potential for expanding the reach of mobile financial services (MFS) to Bolivian consumers.
Millicom reports that 29% of its subscribers in Paraguay were using MFS on its network in September 2013, highlighting the strong potential for such developments. Figures for Bolivia were unavailable. Offering SOAT at its Tigo Money retail locations is a good step in educating subscribers on the potential applications for m-banking services and building growth in the sector.
BMI believes Tigo Money has plenty of potential in Bolivia, particularly for remittances to families living in rural areas. Mobile subscribers are expected to continue growing across Bolivia, with rural communities increasingly gaining mobile coverage and buying basic mobile handsets. With over 200 Tigo Money retail locations as well, Tigo is building its reputation among existing subscribers for providing these additional services and encouraging increasing usage of MFS on its network. BMI believes Tigo's MFS portfolio has the potential to boost its subscriber base, seeing it challenge Entel for the top spot in the market.