Friday, September 2, 2011

M-Pesa: Mobile Banking in Kenya, Africa

Slide #1: M-Pesa Overview:
In Kenya, 5 million m-Pesa customers in less than two years. M-Pesa is 45% cheaper than other transfer services
Kenya & Philippines have fastest growing mobile banking networks serving poor people. Providers established large agent networks,.
Success Partners:
1-Safaricom (Record Keeper) - it gets loyalty & revenue sharing 
2-Agent Network
Money transfer

Slide #2: Kenya Overview

East Africa
Capital Nairobi
Population 40m
GDP $60b
GDP per capita $1,700
$1= KES 75 (local currency in Kenya)
Life Expectancy: 47 ~ 55

Slide #3: M-Pesa Historical Development:

MAR 07: m-Pesa launched (developed by Vodafone UK)
The m-Pesa application is installed on the SIM card of most handsets. Exclusive carrier provider is Safaricom.
FEB 08: m-Paisa launched in Afghanistan with Roshan; mobile operator there
DEC 08: Safaricom press release “Will launch int’l money transfer service via m-Pesa network”

SEP 08: Person2Person P2P transfers reached $682m
FEB 09: Daily 160,000 P2P transactions (valued $4m)
FEB 09: 5 million m-Pesa customers in less than two years. M-Pesa is 45% cheaper than other transfer services
1. Send money to relatives in rural Kenya
2. Purchase mobile phone credit
3. Store money
4. Entrepreneurial activities (Pay suppliers & receive from clients)
5. Emergency

Slide #4: Statistics

Slide #5: Operations

m-Pessa trains & tests agents for one day. Agent earns $0.5 for signup customers and $0.5 for first deposit. Agents receive commission when handling transaction for subscriber
A typical agent generates more than twice as much revenue through M-PESA than through the sale of airtime
One agent said he could maintain only a US$250 float, and had to pay US$1.77 for a bus to the nearest bank. That more than ate up the US$1.01 in commission he earned. Some agents reported having trouble keeping a sufficient float to maintain service continuity in rural areas.
m-PESA is investigating improving money distribution by phone to create a model where money can move around just by using a phone, and are not having to go to a bank. Other improvement is to enable more payment recipients to accept payments through m-PESA accounts rather than strictly in cash.

Customers did not trust the agents within M-Pesa network but did trust Safaricom
* Conduct marketing campaigns with strong brand name
* Ease agents help to customer problems (i.e. hot line)

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