As mentioned in one of my previous posts, I am currently working on a concept paper focusing on building a local Kenyan version of MYC4 – for Kenyan investors and Kenyan businesses only – http://www.myc4.co.ke
In my research for this paper I stumble upon a lot of interesting fora, blogs, articles, videos, books, etc. from which I extract and use as foundation when building the myc4.co.ke concept.
One of the articles on my have-read-list is rather thought-provoking and kind of conflicting with realizing local MYC4 platforms in African countries outside Kenya, which is why I want to share this with you here today.
It is about mobile money and why M-PESA actually succeeded in Kenya based on a loophole in the system. It is no secret that mobile money is a key building block in my jigsaw puzzle of offering Kenyan investors an attractive interest rate from lending to local businesses; if you want to offer the opportunity to invest as little as KES 10, well then mobile money is not just a key building component, it is an absolute necessity!!
There is not a business school with respect to themselves who have not had a case about M-PESA in their curriculum or who have sent researchers and classes to the streets of Nairobi to have on-gound-first-hand experience… it all looks very nice – on the surface that is! Ask yourself, why is it that mobile money has not mushroomed across Africa like a wild-fire?? Or said with the author of the article own words:
“In a continent where less than 20 percent of Africa’s population has a bank account and where latent demand for money services is so high, why are there no other success stories on the scale of Safaricom’s MPESA service, in Kenya?“
I have since been reading an extensive number of articles covering same ground and actually everybody (but the banks) seems to agree. It turns out that banks are RATHER scared of this fast-moving digital monster entering their arena (I understand why!!) and collaborate to challenge the existence of mobile money operators. It simply can’t be right that innovation and development of this kind is not allowed in this sector.
I am not voting for mobile money should be fully liberated regarding compliance and regulation, but when I read that M-PESA offered “bank-grade security and controls to its customers” upon the review that was made in 2009, I do see a runway for taking mobile money airborne.
Yes, the road of balancing between innovation and regulation is thin as ice, but please do not let old thinking of how a bank looks (steel and glass towers) be the guiding star – I mean with 80% unbanked it must be in (nearly) all’s interest to see mobile money implemented and obvious that new models are needed!!