The State of the M-Pesa
The State of M-Pesa by Samuel M for Bitcoins.co.ke
One day in early February, Safaricom announced that Mpesa transactions would cost 10% more and in doing so, created an uproar by many Kenyans online. Several Facebook groups “against increase in Mpesa charges” were formed, and there were heated discussions in leading forums. The heat was directed at the Kenyan government which had increased the excise duty on mobile money transactions. It was felth that the government was killing the goose that laid the golden egg, for Mpesa has become a pillar of the economy, with an estimated 16 million users and about an equivalent of 20% of the GDP having been transacted through the service. How could the government be seen to curtail the growth of such a powerful wealth creation tool?
However the government in all likelihood was viewing Mpesa the same way it views alcohol and cigarettes; as items users are hooked to, and can’t do without. In five years Mpesa has moved from a 20,000 member service favored by a few business people to a mass product with countless peer to peer transactions, where even those who would like to keep away from it find themselves pulled in.
Though Mpesa is still employed for the basic uses which made it internationally famous, and a must-have locally, for instance sending money to a sick relative to purchase medicine, there have been many more innovative applications. Some of these, driven by big corporate and utility companies, include UAP insurance and Sygenta foundation’s Kilimo Salama which allows farmers to buy insurance and pay small premiums through their phones.
Meanwhile in the health sector, Grundfos Lifelink a non governmental organization allows rural families to access safe water and pay through Mpesa. Other creative uses of Mpesa come from individual users with many self published authors writing and selling ebooks on the local Internet scene, receiving payment via Mpesa. The topics covered in the ebooks range from health and relationships to politics and finance. For instance a blogger who claims to be an “insider” in Kenyan politicians sells an ebook “revealing the secrets” at Ksh.900 (about $10.60 or 0.5 btc).
Lately though the talk has been about M-Shwari, a product launched by Safaricom in partnership with Commercial Bank of Africa. M-Shwari allows Mpesa users to save as little as Ksh.1 (0.011 $ or 0.56 mBTC) in a day and also borrow as little as Ksh. 1000 ($11.76 or 0.57 btc). In the three months since its launch almost a billion Kenyan shillings have been banked, and 120 million loaned through M-Shwari.
This year it is hoped Safaricom will open the Mpesa API to developers, and if this actually happens Mpesa, despite the increase in transaction fees, will become more integrated in the lives of many Kenyans. Developers hopefully will come up with not just creative Mpesa based products, but also relevant ones.
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