On March 6, 2014, Safaricom celebrated the 7th
Anniversary of MPESA since it was launched by former Safaricom Chief Executive
Michael Joseph on March 6, 2007. The mobile money transfer service is one
of the biggest success stories in the history of serving more than two thrids
of the Kenyan population and flowing approximately 43 percent of the country’s
Gross Domestic Product (GDP). Most of
the unbanked in Kenya benefited from the service as a channel of conducting
business without incurring the hefty bank transaction charges and enjoying
convenience of doing commerce anytime anywhere. Soon the other service
providers followed suite with Airtel Money, Orange Money and Yu Cash. The
initial concept of M-Pesa was to create a service which allowed microfinance
borrowers to conveniently receive and repay loans using the network of
Safaricom airtime resellers. At the moment, MPESA has over 17 million users, over 65,547
agent outlets, 1,482 paybill partners and 541 bulk payment partners. Three factors are attributed to the great success of
mobile money in Kenya namely; the high mobile telephony penetration rate,
simplicity of the SIM based application and lack of extensive banking services
in the rural areas.
Kenya stands out
as unique with the thriving mobile money transfer market. The same service has
elicited different consumer reactions in other parts of East Africa. M-Pesa was
launched in Tanzania by Vodacom in 2008 but its initial ability to attract
customers fell short of expectations. Vodacom
M-Pesa offers mobile money services at around 53 percent of the Tanzania’s
mobile money market while Tigo Pesa is
at approximately 18 percent and Airtel
Money at approximately 13 percent. In June 2009, 14 months after the
launch of M-PESA in Tanzania, Vodacom announced that registrations had reached
280,000 users who were transferring USD 5.5 million per month at about 930
agent locations. When this is compared to the 2.7 million users and 3,000
agents that had been registered in Kenya 14 months after the local launch of
M-PESA, it is clear that some key differences exist between the two
implementations. However, there has been a change of trend with the future
looking more optimistic. Last year, Vodacom Tanzania reported that M-Pesa
revenue from its Tanzanian operations shot up by 125 per cent during its
financial year ended 31 March 2013. This shows a good trend of the Tanzania
market in adopting mobile money service and possibly follows the Kenyan
example.
In Uganda,
consumer can chose from Airtel Mobile Money, Warid Pesa , Orange Money, MTN
Mobile Money and UTL M-Sente. Since its introduction to Uganda in 2008, mobile
money solutions have had a profound effect – today some 9 million Ugandans use
the service to exchange, save and spend money. The Bank of Uganda (BOU) has showed
in its financial report for January to November 2013 shows mobile money
transfers in the country reached US$640 million. Small businesses can now bank
their money every day instead of handling large amount of physical cash, and
people are able to deposit money immediately without the risk of theft or
needing to travel to a bank. Some 80 percent of Ugandans are farmers, but with
mobile money, distance from traditional banking facilities is now no longer a
barrier to taking control of your finances. Since the introduction of mobile
money in Uganda, there are more mobile money users compared to bank account
holders.
In Rwanda,
citizens are finding it easier to transact business through the mobile money
platform provided for by telecom operators MTN and Tigo than using the bank.
Approximately about 45 per cent of the households have access to mobile phone
in Rwanda. As of 2012, according to Rwanda Utilities Regulatory Authority
(RURA), there were over five million subscribers in Rwanda. MTN Rwanda, the
country’s largest telecom operator by market share, has handled transactions
worth Rwf65 billion through its mobile money service since 2010. It has 470,000
subscribers registered on the MTN Mobile money service. TIGO, the second
largest operator has 9127 subscribers on its TIGO Cash with 1,917 transactions
daily. Judging by this trend, East Africa will become an economic powerhouse
facilitated by mobile money services.
Sources
The Financial
Inclusion Tracker Surveys Project
www.newtimes.rw
