Pipeline Publishing, Volume 7, Issue 5
This Month's Issue:
Wireless for Developing Markets
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Will Kenya’s biggest bank be Safaricom?
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By Denis Gathanju

Mobile commerce and banking spreads across Africa

FACT: Information technology has been the biggest driver of the global economy for the last few years and has subsequently transformed lives across the globe, especially in the developing world.

FACT: Mobile telephony is the single biggest technological transformation in Africa, akin to the industrial revolution in Europe that heralded the expansion of European economies and creation of wealth for its people.

Though still in its nascent years, telecommunications, especially mobile telephony, is the single biggest technology that is rapidly changing lives across Africa. Less than two decades old, mobile technology is influencing every facet of African life today. Rural, remote villages without an electricity connection are today connected to the outside world, thanks to the mobile technology revolution that has swept across Africa.

Mobile telephony is the single biggest technological transformation in Africa.

people. However, it was laying the foundation of a much-need service that would resonate across Africa and spread into other developing markets such as India.

The M-Pesa service is billed by many in the telecommunications industry as the

Regarded as the last investment frontier in the world, teeming with an abundance of untapped talent while buried deep in the bowels of its surface lies an abundance of natural resources, oil and precious metals, Africa is truly living up to its billing.

Safaricom’s M-Pesa sets the trend

While the introduction of mobile telephony was considered to be Africa’s adoption of modern telecommunications trends, Africa finally announced its arrival about three years ago when it pioneered a value added service that rang closer home to meet the demands of millions. The service has, in essence, transformed the mobile telecommunications industry, not only in Africa, but in much of the developing world as well.

When Kenya’s leading mobile telephony firm Safaricom first introduced M-Pesa (Mobile Money), its flagship money transfer application, in March 2007, Safaricom thought they were merely introducing an innovative business application that was meant to meet the needs of small-scale business

perfect value added service that is helping transform lives in Kenya and across Africa. Many analysts are even comparing the Kenyan innovation to Silicon Valley, California, which has transformed the global IT industry.

From its humble beginnings as a money transfer service that was meant to ease small monetary transactions between small businessmen in Kenya, M-Pesa is today one of the most efficient mobile commerce applications in Kenya, and has been interlinked with many businesses and functions. The service has even transformed in to a bank account for many Kenyans, who have for many years been sidelined by commercial banks due to their low incomes and low deposits.

According to Safaricom, more than 525.84 billion Kenya Shillings (Kes) ($ 6.573 billion US) has been transferred to date since M-Pesa was first introduced in March 2007. Safaricom notes that at least 20 billion Kes ($ 250 million US) is being transferred every month, with monthly transactions increasing by at least 30 per cent.

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