M-Pesa Still The Benchmark For Kenyan Innovation

VENTURES AFRICA – Kenya is pushing hard to create its very own Silicon Savannah as it continues to foster a reputation as a technology hub on the back of its successful export of the M-Pesa model.

Technological advancement is at the heart of the government’s Vision 2030 scheme, a wide-ranging project that, it is hoped, will put Kenya on the way to greater economic growth and encourage local and international investment in the sector.

International attention has been on Kenya since the pioneering M-Pesa was introduced in 2007 by Safaricom, the country’s biggest mobile provider. In a country where the majority of people own a mobile phone but are unbanked, M-Pesa allows Kenyans to transfer amounts as low as Sh50 (60 cents) in seconds. It is now used by 70 percent of the adult population, approximately 14 million people, and boasts 28,000 agent outlets across the world. It processes more transactions within Kenya than Western Union does globally.

“We did not look at it as a revenue centre,” says Dr Bitange Ndemo, permanent secretary at the Ministry of Information and Communications. “It was meant to retain customers and solve some of their problems. Luckily it became a revenue centre and spread like a virus.” M-Pesa accounted for 11 percent of Safaricom’s 5.2 billion shillings ($62 million) earnings in the six months between March and September last year, with commercial banks pairing with mobile providers in order to prevent a loss of business. Though mobile money networks in East Africa currently only exist within individual countries, there are plans afoot to create a regional network in the next few months.

This “virus” has helped put Kenya on the map when it comes to innovation. “M-Pesa is part of the lure that brings the idea of Silicon Savannah to reality,” says Mark Kaigwa, a web marketing consultant at Affrinovator, pointing out that the model has been copied from California to Kabul. Within Kenya it has been used as part of the ‘Kenyans for Kenya’ initiative to fight hunger, with approximately $6.7 million raised so far from donations through the service. Yet it is its successful deployment abroad that has gained Kenya’s technological sector worldwide attention.

It is a rare example of the developing world showing the developed one the way forward. The International Monetary Fund (IMF) described it as a “resounding technological innovation” while the World Bank was so impressed that it has drafted in former Safaricom CEO Michael Joseph to help roll mobile money out across the developing world, announcing in a statement that Joseph will play a leading role in “spreading the use of mobile phone banking, applying his information and experience at the helm of Kenya’s biggest telecommunications service provider.”

M-Pesa is not the only Kenyan innovation that has been used worldwide to aid sustainable development. Kenyan start-up Ushahidi recently had the opportunity to showcase its open source mapping software at the pre-event for the United Nations Conference on Sustainable Development, demonstrating how technology can be used to increase transparency and democratise information. Ushahidi develops open source software that allows users to map anything from violence hotspots to healthcare facilities in any locality. Developed in response to the post-election violence in Kenya in early 2008, it now has more than 22,000 deployments in 154 countries, including Haiti and New Zealand. Like M-Pesa, it is an example of Kenyan innovation being adapted for elsewhere in the world, empowering normal people to do things they were previously unable to. Such innovation will not go unnoticed as Kenya seeks to build its Silicon Savannah.