alice makochieng- speaker & lecturer africa week-nmmu 2...

Alice Makochieng- Speaker & Lecturer

Africa Week-NMMU 2nd Avenue Campus

Key words- Innovation, Africa, mobile money, fintech, investments

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A. Makochieng Africa Week 24th May

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GREEN AND SUNNY NAIROBI


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Mpesa’s History

Mpesa’s financial figures

Mpesa’s impact and innovation

Future developments

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For years, the emerging markets…Africa in particular has looked to the West for innovation and ideas to manage their financial systems.

Except in this one area where globally, the world is looking to Africa for ideas…in the mobile money transfer technology

80 % of the worlds mobile money transactions occur in East Africa, with Kenya as the leading country globally in this. The Economist 2017-

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The big banks reaped higher returns, charging expensively for poor services and looked relatively successful- but with very unhappy customers

These mainstream banks were monopolistic, considered themselves too big to fail, and not innovative to serve a large unbanked market.

African economies, long underserved by the mainstream banks, have leapfrogged into fintech-banking meets technology

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Safaricom started Mpesa in 2007. The idea was- ‘what if we allowed people to transfer money using their mobile phones’…

The Government of Kenya, Safaricom and the DFID (UK) put in the initial investment for a trial mobile money transfer technology

Two British scientists and the Kenyan team (Including the University of Nairobi) started working on this silly idea…

NB- Universities, Govt & Industry collaboration 10


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Even the name- Mpesa –it sounded so African that one of the team members said it will not take off-

But, Safaricom stuck to their gun that that is the name….Mpesa- ‘money’ in Swahili

With a ready market of many unbanked adults- it quickly took off; leaprofrogged into fintech 11


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Mpesa has grown quickly and is a cash cow for Safaricom > $30 million per day. 40% of Kenya GDP passed through Mpesa.

Mpesa has 29 million subscribers, and is available in 10 countries across Africa, Asia and Europe

Mpesa revenues for Safaricom was Ksh 55 billion ($ 567 million) for the year ending March 2017. In total, Safaricom made Ksh. 200 billion (1.9billion USD) >> R25 billion; 32% rise in Mpesa revenues 12


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Mpesa’s market share of mobile payments 69%, no other mobile payment has these impact (even Square by Twitter CEO J.D)

Africa has 1.1 billion population, 70% of which is unbanked, with 557m mobile subscribers (GSM Association)

330 million Africans accessing the internet with mobile payments as the big opportunity, and still growing

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Africa is very much in need of user-centered innovation…

Focus innovation on a problem that is bugging a lot of people. Mpesa focused on serving masses of unbanked population. Has 150 000 agents

Mpesa has been able to lift many people in Kenya out of poverty by stimulating rural economies especially in agriculture, retail, energy and transportation… 2% of households

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MAY 2017


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1. Develop an incredible product

2. Mpesa meets these 3 innovation questions: Can you Deliver- Connect-Scale?

3. Mpesa connects with many service providers from airlines, banks, the stock exchange, pay TV to credit providers

4. Have an agile business model… MPESA keeps improving and scaling up

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5. Solve a deep problem- a real need for people (many people)

6. As you show traction- build a community –along the financial value chain - of

customers, suppliers, investors- gain scale

7. MPESA is linked to banks and many service providers hence seamless movement of money

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Africa will build the future… Mark Zukerberg

"This is where the future is going to be built," Zuckerberg

He said this in his first stop in Kenya in May 2016 ... on Kenya's most famous innovation, the M-Pesa mobile money transfer service

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Factor conditions- Kenya’s economic base is service-oriented ‘intangibles’ as opposed to dominance by commodities- hence the country has real capabilities in an educated workforce with skills and research capabilities

Demand conditions from customers-Kenyan’s have an experimental mentality and are risk takers, ready to try new technologies. The first CEO of Safaricom Michael Joseph called them peculiar Kenyans:-)

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CURIOUS!


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Firm strategy- Safaricom’s strategy, operational excellence has driven Mpesa-they focused on it. The presence of other mobile rivals spurred competition thus driving Mpesa’s service delivery and growth

Government investment- The best investment that the Government of Kenya has ever made

Chance- Mpesa innovation was triggered by random events and the right timing

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Safaricom- Vodacom deal…

Safaricom is set to expand its M-Pesa financial services across Africa.

South Africa's Vodacom has just bought a 35% stake in the Kenyan telecoms operator from Britain's Vodafone.

This deal is important for Vodacom and it paid Ksh 266.6 billion (2.4 Billion UK Pounds)…

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http://telecom.economictimes.indiatimes.com/tag/africa

http://telecom.economictimes.indiatimes.com/tag/vodacom

http://telecom.economictimes.indiatimes.com/tag/vodafone

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MPESA CAN SOLVE SASSA

PAYMENTS, RSA


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More innovation & linkages via Mpesa.

Users in Kenya can buy Government bonds in the NSE, a first in the world… besides other services

Mpesa launched a card payment system- in May 2017, directly competing with Visa and Mastercard

With mobile technology, 4th industrial revolution will be Africa’s, via fintech

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More inter-connectedness across the continent; and across industry boundaries

Investment by government in the infrastructure to bring down the cost of data-

Changing education system to include more coding and tech hubs. The iHub, Silicon Cape

Hybrid education- of Engineering and Management degrees

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“This continent needs to be a future hub of global growth, not just African growth”- President Obama, 2015

When Obama praised Kenya’s tech entrepreneurs during his trip there in July 2015 during the Global Entrepreneurship Summit (#GES2015)

Can Africa lead the future in innovation?

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Thank you all!

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alice makochieng- speaker & lecturer africa week-nmmu 2...

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