Kenya has recently been acclaimed world over for the mobile revolution that is MPESA. MPESA for those who don’t know is a payment system which allows Kenyans to transfer money instantly to other Kenyans through their mobile phones. This service is offered by Safaricom which is Kenya’s largest Mobile Network with a reach of 17 or so million subscribers. Safaricom is both a privately and publicly owned company with Vodafone a UK based consortium having 60% shares in the company and the Kenyan government and public owning the rest on a 50:50 basis.
Safaricom MPESA advert
Mpesa on its own transacts about 17 billion shillings monthly and has a market of 6 million users in the country. This will on the surface make MPESA a USD 2.5 billion venture making sending it into the realm of PAYPAL.com which is one of the worlds most prolific virtual money transfer ventures. For this to happen in what is ostensibly a third world nation is what is making the whole world take notice.
World acclaims mpesa Part 1
World acclaims mpesa Part 2
In fact i posit that MPESA will be on its own a major driver of the economic expansion of the Kenyan economy and best of all it will take a bottom up approach because it will empower the mama mboga (woman grocer) by allowing her to manage her finances efficiently.
In order to bring the MPESA issue into perspective i would like to share some videos of the progress made by various small, medium and large scale enterprises with regards to adoption of this service. However before i do that here are some steps the government and mobile phone players should take to increase the earnings and effectiveness of virtual payment systems such as MPESA and achieve their full potential.
MPESA needs to move from a payment system to a payment gateway: Safaricom should develop MPESA into a platform where other software developers can build applications on top of the platform an thereby increase utility and reach of this technology. The legal foundations are already in place with adoption of the ICT bill late last year. Limits of MPESA have already become apparent.
A good example is the Easy Hisa share trading system developed by Symbiotic Media Consortium and launched recently by Standard Investment Bank which allows for semi automated buying and selling of shares was allowed to sit on top of the MPESA Platform it would allow for fully automated real time trading which would have meant less operational costs for the bank and more control for the end user in this case the trader.
In fact Standard Investment bank could fully outsource the trading aspect of its business to software and concentrate on core activities such as share transfers and management and international banking and trading without having to worry about its own internal risk factors. This would allow for their easy expansion across the East African and International markets because all they would have to do is add new currency codes and open up their access NSE to anyone with a mobile phone or debit card. Nevertheless introduction of EASY HISA is a step in the right direction. Watch launch below.
Standard Investment Bank launches Mobile application
The second issue that is crucial is the development of a address system that is based on housing as opposed to postal boxes. This is crucial to support E-Commerce and the delivery of goods and services. If the government succeeded in creating such a postal system then i believe it would increase the G.D.P dramatically because it would open up more markets and reduce strain on transportation and security costs.
It would also open up new industries whereby e-commerce enterprises such as MamaMikes.com would have incentives to enter the warehousing and distribution industries. Together with Mobile banking such postal systems would mean the expansion of the Kenyan economy within a very short time. Similarly efforts of giving squatters title deeds would also automatically increase earnings because these individuals could access Bank loans as well as other finance sources.
Lastly there has to be support for the country’s budding webprenuers. They are the ones who will innovate and create solutions that utilize these platforms once they exist they are already a few which i have already featured and here are some links and videos. The support so far has come through a number of initaitives being led by Kenya’s top university Strathmore University through its mobile technology seminars and the ICT board and Ministry of Information and Technology led Permanent secretary Bitange Ndemo. However much more needs to be done to encourage these innovators to pool together and acquire required skills to establish viable business ventures that solve local problems.
We at JohnKaranja.com will continue to support these individuals by sourcing funding information and providing start up guides.
Here are some of Kenyan mobile innovations developed lately.
Car track mobile application
Home management system
Wilfred Mworia has kindly provided some guidelines for mobile application development.
Are you a Webprenuer or do you have a project you would like to tell us about? Post it the comments section and we will get back to you.