Mama Money now has more than a million users who pay fees as low as 3% for international money transfers. Founded in 2013 as a social impact business by Mathieu Coquillon and Raphael Grojnowski, the company was launched to drastically reduce remittance costs so that more money arrives in the pockets of the people who really need it. After growing by over 300% in 2019, Mama Money had to expand its team rapidly to keep up with the explosive growth.

“We’re incredibly grateful that 2020 was our best year yet. It’s terrible to see how tough the pandemic has been for so many people and businesses. We’re humbled and very lucky to have added over 70 permanent team members during this time,” said co-founder Mathieu Coquillon. “Lockdown restrictions spurred the adoption of digital money transfer services. While there is a large informal network for money transfers that operates predominantly in cash, services like Mama Money make it easier for people to transfer money from the safety of their homes, which became particularly appealing during lockdown.”

“There was a clear need for a safe, low-cost, and reliable way to send money across borders using mobile technology that makes sending money as easy as sending a WhatsApp message.”

Mama Money started with money transfers from South Africa to Zimbabwe in 2015 and now sends to over 50 countries across Africa, Asia, and Europe with more to come. The company has partnered with the world’s leading payment providers and money transfer operators which allows their customers to send money to Western Union, MTN Money, Airtel Money, and many more while still keeping costs low for their customers. “We saw that people were paying ridiculous fees of up to 20% or more for sending money to their families for essential needs like school fees and medical bills. Many were handing cash to a driver to physically transport it across the border to their mama. It was a slow and unsafe process and sometimes the money would never arrive,” said Coquillon.

“There was a clear need for a safe, low-cost, and reliable way to send money across borders using mobile technology that makes sending money as easy as sending a WhatsApp message. It’s now possible with Mama Money’s mobile app.” “A challenge is hiring the best talent to keep up with our growth. We focussed on fostering an inclusive company culture, though we still have a lot more opportunities for top talent to join us with many vacant roles that still need to be filled,” said Bentolina Nnadi, Mama Money’s Head of Talent. Two years ago, the business employed just 30 staff and now Mama Money has close to 200 permanent staff and over 2,500 field agents operating across South Africa.

Question 1 (Marks: 10)
We all interact with a range of business every day, whether it is the large chain store in the mall or the vendor selling goods next to the side of the road. Some businesses are formal and others are informal. Read the case study above and answer the following questions.
Q.1.1 With the use of examples, distinguish between a formal and an informal business. (5)

Q.1.2 Determine whether Mama Money is a formal or informal business and provided
reasons for your answer. (3)

Q.1.3 State whether Mama Money is private, state-owned or a parastatal enterprise and
provide reasons for you answer. (2)

Question 2 (Marks: 20)
All businesses operate within the economy of the country or countries in which they operate. There are different kinds of economic systems, such as the command economic system, the market economic system and the mixed economic system. Read the above case study and answer
the following questions about economic systems.

Q.2.1 Identify the type of economic system that Mama Money operates in. (2)

Q.2.2 Explain how a market economic system works by:
a) Discussing the role of government in the market economic system.
b) The role of entrepreneurs in the market economic system.
c) The advantages and disadvantages of the market economic system.
Question 3 (Marks: 20)
Entrepreneurs start and manage a business by producing a product or a service under conditions of risk and uncertainty. Entrepreneurs need to have certain characteristics and skills to achieve their goal of owning a profitable business. Read the above case study and answer the following questions with regard to entrepreneurship.
Q.3.1 Discuss five characteristics that would make someone a successful entrepreneur. (10)

Q.3.2 Identify five characteristics that helped Mathieu Coquillon and Raphael Grojnowski (founders of Mama Money) to be successful entrepreneurs and discuss how each one helped them on the road to success.
Important: You are required to refer to the case study and conduct additional research. (10)

Question 4 (Marks: 15)
Recommend an appropriate form of ownership for Mama Money. Include in your recommendation:
• The advantages and disadvantages of the recommended form of ownership.
• Justify why your recommendation is appropriate for Mama Money.

Question 5 (Marks: 5)
Mama Money wants to continue growing its business. Choose one of the following organic growth strategies and suggest how it can be used by Mama Money:

a) Market development
b) Product development
c) Diversification.

Question 6 (Marks: 30)
Managing a business in Africa must include the consideration of different insights and dimensions unique to Africa. In an essay format, advise Mathieu Coquillon and Raphael Grojnowski (founders of Mama Money) on the different dimensions of African management as well as the skills required by managers to successfully manage a business in Africa. Provide examples relevant to Mama Money to support your discussion.

• Your essay should be between 1000-1500 words. Please indicate the word count at the end of your answer.
• An essay requires a clear introduction and conclusion.
• Write in an academic tone.
• See the rubric attached to guide you in your answer.
• Use more at least three academic sources (including you prescribed textbook) to formulate your answer.

Answers to Above Questions on Business Management

Answer 1: Formal business and informal business are important concepts that have unique characteristics, structure and operations. A formal business is required to be registered with applicable loss and legal regulations whereas there is no such formal registration required in case of an informal business. Formal businesses have to maintain complete records of their performance, and account for tax liabilities; various informal businesses might not maintain such detailed records and may not also report to tax authorities.


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