What was last week’s blog conclusion? Right, stories from Africa are rarely about success, prosperity or innovation. Although there is so much opportunity for successful business. Today’s blog post is supposed to deliver an example of proof: Successful business in Kenya.
Before starting, hold on for a moment and sort your thoughts: Keyword Kenya – what comes to your mind?
Apart from those who have been there for its wonderful beaches and exciting wildlife safaris, I suggest that except for drought, hunger, Dadaab, Somali refugees and maybe even post-election violence and ICC investigations, there is not much about the East African country that has stroke us during the last five years.
Did you know about Kenya’s economic sunny sides? About its mobile phone sector?
Any statistics will show you that it is Africa which has the world’s fastest growing mobile phone market. And an unbelievably versatile one – no comparison to Europe! Kenya’s mobile phone system is incredibly adapted, innovative, cheap – and accessible for millions of people, facilitating their everyday life.
There are small changes that come with those small mobile devices: The craftsman is reachable and able to flexibly dispose even when he is on the go, caterer can respond to changes in supply and demand more quickly, farmer and fishermen can inform themselves on market prices for wheat and perch and thus improve and adjust their warehousing. Microeconomic impacts that make macroeconomic impacts. According to studies of the London Business School, an increase of 10 percent more mobile phones for a country’s population raises growth in developing countries by 0.6 percent.
To make an illustration: In the 40-million-inhabitants-country Kenya, there are 20 million mobile phones.
Here comes the strength of the Kenyan network: First of all, the acquisition of a phone number is much less complicated, credit units can be transferred from the old to the new model without further ado. If a customer is out of balance, some providers offer to raise a credit over 50 cents. That one has to be repaid within three days, 10 percent interest. Access to the internet is not coupled with expensive rates. Every day comes an offer on free text messages or calling. Since 2009, Kenya’s primary provider offers a solar phone for converted 30€. Produced out of recycling material.
However, the centerpiece of the mobile phone revolution is the triumphal procession of an innovation called “M-Pesa”, in English: Mobile Money. Since 2007, M-Pesa is an offer to process money transfer via mobile phones. Revolutionary in a country where only around 15 percent of all adults possess a bank account.
The proceeding is conceivably easy: The customer gets registered at M-Pesa, receives a number and a password and thereby operates an account on his simcard. He can now remit cash via his mobile phone. Over 11,000 agents throughout the whole country enable customers to withdraw and deposit money on their accounts.
At the beginning of 2010, there were already eight million M-Pesa subscribers and a converted 200 million euro were transferred monthly within the Kenyan mobile phones. Since 2011, the service is being extended to other countries: Instead of using expensive money transfer via Western Union, transactions between Great Britain and Kenya can now be done via mobile phone. Within the shortest period, all big companies braced up this new service: Electrical power and water bills are now paid via M-Pesa, the purchase in the big supermarkets, flight tickets, school fees. Even prostitutes moving with the times, accept M-Pesa, but that is…well, a different thing. In the end, what is clear is that Kenyan mobile phone providers have been unevenly more innovative than European, Asian or American ones. Their concept works out. Say what?! A success story from Africa!!