Ali lice Makochi hieng eng- Sp Speaker er & Le Lecturer er nd Avenue Afri rica ca We Week-NM NMMU MU 2 nd nue Ca Campus pus Key words- Innovati vation, n, Afric ica, a, mobil ile e money, ey, fin intech ech, , in investments stments A. Makochieng Africa Week 24th May 2017- NMMU 1
GREEN AND SUNNY NAIROBI A. Makochieng Africa Week 24th May 2017- NMMU 2
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Mpesa’s History Mpesa’s financial figures Mpesa’s impact and innovation Future developments A. Makochieng Africa Week 24th May 2017- NMMU 6
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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 ist 2017- A. Makochieng Africa Week 24th May 2017- NMMU 8
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 A. Makochieng Africa Week 24th May 2017- NMMU 9
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 NB- Universities, Govt & Industry collaboration A. Makochieng Africa Week 24th May 2017- NMMU 10
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 A. Makochieng Africa Week 24th May 2017- NMMU 11
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 A. Makochieng Africa Week 24th May 2017- NMMU 12
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 A. Makochieng Africa Week 24th May 2017- NMMU 13
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 A. Makochieng Africa Week 24th May 2017- NMMU 14
MAY 2017 A. Makochieng Africa Week 24th May 2017- NMMU 15
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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 A. Makochieng Africa Week 24th May 2017- NMMU 20
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 A. Makochieng Africa Week 24th May 2017- NMMU 21
Africa will build the future… Mark rk Zukerb kerber erg "This is where the future is going to be built," Zucker kerberg berg He said this in his first stop in Kenya in May 2016 ... on Keny nya's a's most famous innovation, the M-Pes Pesa mobile money transfer service A. Makochieng Africa Week 24th May 2017- NMMU 22
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Factor or condi diti tions ons- 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 and condit itions ions 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 pec ecul uliar ar Ken enyans yans :-) A. Makochieng Africa Week 24th May 2017- NMMU 27
CURIOUS! A. Makochieng Africa Week 24th May 2017- NMMU 28
Firm strate ategy gy- 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 vernment inve vestment stment- The best investment that the Government of Kenya has ever made Chanc ance- Mpesa innovation was triggered by random events and the right timing A. Makochieng Africa Week 24th May 2017- NMMU 29
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)… A. Makochieng Africa Week 24th May 2017- NMMU 30
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MPESA CAN SOLVE SASSA PAYMENTS, RSA A. Makochieng Africa Week 24th May 2017- NMMU 33
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 th industr With mobile technology, 4 th dustrial ial re revolut volution ion will be Africa’s, via fintech A. Makochieng Africa Week 24th May 2017- NMMU 34
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More in inter-conne nnecte ctedn dness ess across the continent; and across industry boundaries Investment by government in the in infrastr astruc uctur ture to bring down the cost of data- Changing educat ation ion syst stem em to include more coding and tech hubs. The iHub, Silicon Cape Hybrid id education- of Engineering and Management degrees A. Makochieng Africa Week 24th May 2017- NMMU 36
“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? A. Makochieng Africa Week 24th May 2017- NMMU 37
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Thank you all! A. Makochieng Africa Week 24th May 2017- NMMU 39
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