Following the runaway success of M-PESA in Kenya, global payment players are beginning to converge in East Africa.
Read more>>> Mobile Payments in East Africa: The World is watching.
Nov 19, 2013
Nov 17, 2013
Airtel Money Partners with Grameen Foundation to Provide Mobile Financial Services to Savings Groups in Uganda
Bharti Airtel (“Airtel”), a leading telecommunications services provider with operations in 20 countries across Asia and Africa, today announced that it is working with the Grameen Foundation to initiate a project to provide mobile financial services to Savings Groups in Uganda.
The innovative project, dubbed ‘Airtel Chama’ (“chama” means “savings group” in Swahili) aims at reducing Savings groups’ reliance on cash and seeks to introduce the benefits of mobile technology to approximately 900,000 people in Uganda.
Uganda currently has over 45,000 village savings and loan associations (VSLAs) with over 900,000 members. The country is the largest market for savings groups globally.
Savings Groups (SGs) are self-managed community-based groups that provide members access to basic financial services. SGs are very popular amongst African women, especially those who are not involved in the formal financial sector. Currently, most saving groups are cash-based, thus the potential for fraud and theft is very high. The Airtel Chama service will address this issue by making the savings groups’ processes more secure, efficient and transparent.
In addition, the Airtel Chama service will also provide credit to those who don’t have access to it through traditional channels. Given that at least 70% of savings groups’ members are women, the innovative service will be a catalyst for women empowerment in Uganda. Thanks to the Chama platform, women will have better access to credit facilities and their loan applications will be processed faster in financial institutions. The Airtel Chama service answers the government call of empowering women and enabling them to contribute towards development.
“In some cases, women cannot save their earnings because they are obliged to give any money they have to their husbands. With Airtel Chama, women’s savings are private and digitized; these women will be more empowered because their husbands will have a harder time taking their money away”, explains Chidi Okpala, the Director of Airtel Money Africa.
He continues: “At Airtel, we recognize innovative telecommunications solutions have the power to transform communities. The Chama initiative will promote more economic transactions in the rural areas. It will lead to rural development and it will reduce poverty. We are excited and thankful to the partners involved in birthing this initiative: GSMA and the Grameen Foundation”.
GSMA mWomen has lauded Airtel Uganda’s efforts and has awarded the Innovation Fund grant to the telecommunications company. Airtel will use the money towards decreasing the gender gap in mobile access and increasing women’s use of mobile in Uganda. The Grameen Foundation will monitor the social impact of the Airtel Chama service on Ugandan women.
Airtel plans to further develop the Chama initiative and is eager to implement it across all its markets on the continent.
Nov 14, 2013
Kopo Kopo, a merchant services platform serving thousands of businesses in East Africa, announced today that it raised $2.6 million in Series A financing. led the round with, an existing investor. also participated. Noah Doyle of Javelin Venture Partners will join Kopo Kopo’s board of directors.
In the last two years, Kopo Kopo has become a premier merchant services platform by partnering with mobile operators launching mobile money payment systems. Kopo Kopo’s end-to-end platform allows operators and other payment providers to acquire and manage merchants who wish to accept mobile money payments. The Company will use the new capital to hire top talent, expand its platform offering and accelerate global growth beyond East Africa with the goal of incorporating millions of merchants across the economic frontier into the formal financial system.
Kopo Kopo aspires to create the merchant ‘operating system’ of choice for businesses in emerging markets.
“Merchants in emerging markets — like merchants anywhere — need tools and services to grow their business,” said Dylan Higgins, Kopo Kopo’s co-founder and CEO. “Kopo Kopo, in partnership with rapidly growing mobile money systems like M-PESA, helps merchants succeed by moving their businesses onto a digital platform and empowering them with state-of-the-art software tools like remote monitoring, bank integrations, customer messaging, and even Android applications.”
“Mobile money has emerged as one of the fastest growing consumer products ever, with adoption rates reaching as high as 70% in only five years in Kenya. The Kopo Kopo platform creates a vital link in the mobile money ecosystem by allowing consumers to pay at the merchants of their choice, unlocking billions in potential demand. Javelin is thrilled to support Kopo Kopo’s mission to enable flexible mobile payments for merchants across emerging markets,” said Noah Doyle, a partner at Javelin Venture Partners.
“Digital payment acceptance is a fundamental on-ramp to financial inclusion in the global economy and financial safety in the local context,” said Vinod Khosla. “Kopo Kopo is at the forefront of making this happen for merchants in Africa, and soon, around the world.”
Nov 12, 2013
Kenya has become a global leader in mobile banking, thanks to Safaricom M-PESA service. M-PESA has redefined retail banking by making mobile phones all-in-one credit cards, ATMs, money transfer offices, and branches.
Since its inception in 2007 M-PESA has continued to make leaps and bounds globally. Here is Safaricom’s CEO Bob Collymore putting it into perspective.
The following are the latest M-PESA statistics according to the latest reports released by Safaricom.
- M-PESA has 18.2 million registered users of which 11.6 million are active users.
- There are 78,856 M-PESA agent outlets countrywide.
- 34% of airtime top-ups are done directly through M-PESA.
- The value of P2P (person-to-person) transfer per month is KES 77.3 Billion
- The value of P2B (Person to Business) per month is KES 9.9 Billion
- The value of B2P (Business to Person) per month is KES 7.6 Billion
- Over 36,749 merchants have been acquired for the Lipa Na M-PESA cashless merchant payment service.
- There are 142 Cashless FMCG distributors using M-PESA.
- M-Shwari now has over 2.4 million active customers with KES 1.8 Billion in deposits, KES 0.8 Billion in loans with NPLs at 3.8%.
- There are over 15,377 households with M-KOPA solar system.
Nov 11, 2013
Nov 6, 2013
Airtel Kenya and Pepsi have partnered with the Nairobi County Government to launch an exclusive project that will provide youth groups in the County with 1,000 kiosks as a way of empowering youth to generate sustainable income.
The 1, 000 Airtel Money branded kiosks will be distributed to all city markets, estates and selected location in the Central Business District (CBD). Under the agreement, the kiosks will also operate as Airtel Money agents where customers (both postpaid and prepaid) can also access Airtel Money services where they can register for the service, deposit, withdraw as well as pay for their utility bills.
|Airtel Kenya Managing Director Mr. Shivan Bhargava and Nairobi City County Deputy Governor Mr. Jonathan Mueke during the launch of the Kiosk project|
This unique partnership is also going to make Airtel and Pepsi products and services available to more people within the communities.
Under this project Airtel will train the youth on Entrepreneurial Skills for sustainability and self-efficiency. A plan is underway to roll out a similar initiative with other Counties in the country.
Oct 31, 2013
The FinAccess 2013 survey results shows that Kenya’s formal financial inclusion now stands at 66.7% in 2013, an increase from 41.3% in 2009. This rate of expansion in the reach of the financial sector places Kenya second only to South Africa in Africa.
More than double the number of adults use mobile phone financial services (11.5 million) compared to banks (5.4 million).
Use of mobile phone financial services more than doubled from 28% to in 2009 to 62% in 2013.
Bank use has been rising over time from 13.5% in 2006 to 29.2% in 2013.
Use of MFIs has remained at 3.5% between 2009 and 2013.
Use of SACCOS has decreased since 2006, from13.5% in 2009 to 9.1% in 2013.
Use of informal groups has decreased from 39.1% in 2006 to 27.7 in 2013.
Women's use of the formal prudential institutions still lags behind that of men.
Exclusive use of informal financial services has declined for both men and women.
Since 2006, the reduction in exclusion has been much slower in the rural population than the urban.
Oct 30, 2013
Since the beginning, M-Shwari has been ‘savings-led’. Customers were encouraged to deposit money into M-Shwari in order to qualify for loans. The more you deposit into your account, the more you can borrow. This strategy failed to produce a revolution in inclusion desired since customers were not maintaining a balance in their M-Shwari account.
M-Shwari has now shifted to a credit-led savings strategy, whereby depositors are attracted to maintain funds in M-Shwari with a reciprocating borrowing proposition from M-Shwari.
With this strategy M-Shwari can offer loans to borrowers at account opening.
M-Shwari is trying to go beyond giving loans by incorporating methods of incentivizing savings in M-Shwari account and support discipline of saving. This will in turn enable clients to access larger amounts in the future while turning M-Shwari users into net savers over time.
M-Shwari is currently operating where demand in the low income market is. This service makes it possible for ordinary Kenyans to save, earn interest and borrow money using their mobile phones and the M-PESA service.
M-Shwari allows M-PESA customers to save as little as KSh 1 (0.01 $US) and to earn interest on their savings, together with access to micro-loans from as little as KSh 100 (1.16 $US). The loan can be accessed anytime and the funds are transferred into the customer’s M-PESA account immediately. There are no charges for transfers between M-Shwari savings accounts and M-PESA accounts.
M-Shwari now has 5 million registered users. This makes CBA the second largest retail lender after Equity Bank which has 7 million accounts.
Read more on the Business Daily
Oct 15, 2013
Extending the reach of formal financial services to include the very poor living in the most remote areas of the developing world, is not a new idea. And yet three quarters of the world’s poor still have no access to a bank account, reports the World Bank in their global survey.
The problem is the high cost of secure and reliable financial services, particularly in inaccessible rural areas. The solution is already out there argued Bill Gates at the Alliance for Financial Inclusion Forum this September, "Digital can lower the cost of a range of transactions by as much as 90%, providing nearly universal access to innovative financial products and services”.
But, then why have these digital solutions not reached the world’s population who earn less than $2 a day and have the greatest need for efficient tools for managing the little money they have?
Some countries have pioneered this solution. Kenya’s M-PESA mobile money product has demonstrated its utility subscribing 75% adults, and similar services in Tanzania and Bangladesh are also showing great promise. However, the majority of digital finance providers have failed to emulate this success. The secret seems to be the ability to copycat selected best practices, while listening intently to local market demands.
The Helix Institute of Digital Finance, a training and information institution for digital financial services, will launch next month in Nairobi to address these and other issues through training courses, operational, and other technical support. As a partnership between the Gates Foundation, the World Bank’s International Finance Corporation, the UN Capital Development Fund (UNCDF) and MicroSave, Helix’s mission is to help digital finance practitioners increase efficiency, improve profits, and extend financial services to low-income and rural communities globally.
Helix’s first training course is on AGENT NETWORK MANAGEMENT, 18th-22nd November 2013 in Nairobi, Kenya. . Future training courses will cover ‘Risk & Fraud Management’, ‘Data Analytics’ and ‘Behavioral Science for Product Design’. For more details, please visit www.helix-institute.com
Oct 1, 2013
Airtel Kenya and Pan Africa Life Assurance Limited have entered into a strategic partnership to provide a life insurance product dubbed ‘Bima Mkononi’ into the Kenyan market. The partnership will enable customers from both Airtel and Pan Africa Life Assurance Limited to access affordable life insurance via their mobile phones.
The service is a first to market innovation service that will see hundreds of thousands of Kenyans who have for the longest time been denied a chance to life insurance due to affordability and accessibility, get covered.
Bima Mkononi is a specially designed mobile cash service that allows Airtel subscribers to acquire life insurance for a minimum weekly premium that will provide cover for the subscriber and a family member. The amount of cover provided for the Airtel subscriber and the family member will depend on the weekly premium the subscriber pays.
The premium will start at KES 15 per week for a cover of KES 25,000. The other covers are KES 25 per week for a cover of KES 50,000; KES 35 for a cover of KES 75,000; KES 45 for a cover of KES 100,000.
No forms are required to be filled on application. To subscribe, customers dial *305# and follow the menu. Subscribers will also be able to pay their weekly premium automatically from their phone. Claim disbursements will also be through Airtel Money.
Pan Africa Life is a market Leader in Life Insurance in Kenya. The company has a rich history having commenced operations in 1947, was the first insurance group to be quoted on the Nairobi Securities Exchange and has operations in all major towns in Kenya. Its relation to South Africa’s Sanlam, the second largest financial Service provider in Africa and rich financial base gives it a competitive advantage among fellow players.
Speaking at the launch Pan Africa Life’s CEO Mr. Tom Gitogo said, “With a penetration of Life insurance at a low of 1.05% in Kenya, the untapped market is huge. However, the traditional models of distribution may not be efficient in improving this situation at the pace we need. Thus the need to venture into other models such as mobile insurance, bancassurance and web based selling. Our strategic partnership with Airtel will offer affordable life insurance right via one’s own mobile phone. The rates provided by Bima Mkononi also provide clients with the flexibility they need in terms of amount of premium and frequency of payment.”
Airtel Kenya Managing Director Shivan Bhargava said the partnership is timely and significant to the company’s customers as it will diversify product offering and differentiation thus ensuring that the subscribers get added value from the company.
“With the announcement, Airtel becomes one of the first mobile operators to offer insurance as a strategic differentiator in its portfolio of products. As a company, we are committed to entering strategic partnerships that meet the ever changing needs of our subscribers. We are keen on being part of the everyday life of our esteemed customers. This partnership will allow Airtel customers to easily access meaningful life insurance services through convenient channels,” added Mr. Bhargava.
Mobile Merchant Payments offers the Biggest Opportunity for Financial Inclusion among Youth-Owned Enterprises in Africa
Income-generating micro and small enterprises (MSEs) are one of the main instruments of economic empowerment for millions of young entrepreneurs in Africa. Micro-enterprises also provide employment opportunities to millions of youth across the continent.
In Kenya for example, the informal sector is dominated by micro and small enterprises. The sector has grown so rapidly over the past two decades that in 2006 it contributed 18 per cent of Kenya’s GDP. According to the 2009 Kenya Economic Survey, in 2008 the MSEs in the informal sector created 433,500 jobs, which constituted 93 per cent of jobs created in the economy that year.
However, a large proportion of these MSEs lack access to formal financial services, which impedes economic growth and development. Lack of enough funds has contributed significantly to the MSEs failure.
Funding for MSEs is poor which leads to poor financial base. Majority of MSEs do not borrow from banks at all due to lack of collateral, high interest rate, and general fear of getting a loan.
Sep 9, 2013
A couple of weeks ago Safaricom launched a campaign dubbed Lipa Na M-PESA which aims to drive use of mobile money for merchant payments in Kenya. Lipa Na M-PESA is a proximate payment from a customer to a business at the point of sale.
Safaricom is running the campaign to fuel recognition among businesses on the importance of accepting M-PESA payments at the point of sale.
As Lipa Na M-PESA continues to gain traction at multiple merchants in Kenya, M-PESA users are demanding to pay with M-PESA even at merchants who have not yet taken up the Lipa Na M-PESA service.
3 Reasons why customers prefer paying with M-PESA
Easy to use
Paying with M-PESA is simple, easy and fast. It takes less than 10 seconds to complete a payment.
It’s free for the customers. Before Lipa Na M-PESA, customers would have to withdraw funds from M-PESA at an agent and incur a withdrawal transaction cost.
M-PESA is ubiquitous
There are over 15 million M-PESA users in Kenya and over 10 million of them are active M-PESA users who are likely to have a balance in their m-wallet.
There is a high chances that a business will always have customers requesting to pay with M-PESA. Businesses are also realizing that accepting M-PESA payments will enable them to improve the relationship with their customers and attract new customers.
Safaricom is targeting 100,000 SMEs.
Photo credit: Kopo Kopo Inc