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Bob Collymore
The Mobile Generation
By Bob Collymore

More Africans have access to mobile phones than to clean drinking water. M-PESA, a money transfer scheme run by Kenyan mobile phone operator Safaricom, is working to use those mobile phones to greatly increase not only access to clean water, but also to tackle gender inequality, maternal and infant health, and malnutrition—both in Kenya and abroad. TLQ caught up with Bob Collymore, CEO of Safaricom, to hear his thoughts on M-PESA’s impact in Kenya and to discover how M-PESA is being used to provide innovative solutions to reach the Millennium Development Goals.

In March 2007 Safaricom launched M-PESA, an innovative payment service for the unbanked.  The approach behind the technology of the M-PESA platform was simple. It stemmed from the understanding that access to finance facilitates entrepreneurial activity, which in turn creates wealth through economic activity, job creation, and trade.

M-PESA has been a key driver of financial inclusion, allowing the unbanked—with no banking details, no bank account and no credit card—to enjoy financial services that were previously the exclusive preserve of those with bank accounts. M-PESA now boasts a customer base of over 15 Million users and a network of over 60,000 agents across the country making the service easily accessible. Annual transactions on M-PESA are equivalent to over 20% of the country’s GDP.

At the time of launch, M-PESA offered only money transfers; an M-PESA customer was able to use his or her mobile phone to move money quickly, securely, and across great distances, directly to another mobile phone user.

Since then, M-PESA has evolved beyond money transfer to an end-to-end financial service provider, radically changing the way commerce is conducted and how money is relayed in Kenya.

In November, we launched M-Shwari, a partnership with the Commercial Bank of Africa (CBA), which gives access to banking products right from your mobile phone. M-Shwari gives low income Kenyans access to cheap loans based on their savings and usage of Safaricom’s products and services.  Importantly, M-Shwari enhances the culture of saving among Kenyans while providing access to affordable credit. This helps to sustain many poor Kenyan families by providing a seamless avenue to save, earn interest, and borrow. Within 5 months of launching, M-Shwari now has over two million active customers.

It is the core values of safety, affordability and convenience that have driven M-PESA to continue to break new frontiers. We will continue to capitalize on the mobile phone to drive financial inclusion and development through innovative services.


MDG 1: Eradicate Extreme Poverty and Hunger

Concern Worldwide, an international humanitarian organization dedicated to tackling poverty and suffering in the world’s poorest countries, set up an aid initiative in the slums of Nairobi to combat the sharp increase in severe malnutrition in the city’s slums. Operating in the urban slums of Nairobi & Kisumu, Concern’s urban nutrition project addresses the rising levels of acute malnutrition in mothers and small children. Concern Worldwide uses the M-PESA money transfer service to enable people to buy food. Carefully selected beneficiaries are allocated SIM cards by Concern and M-PESA. Concern then deposits ksh1500 (about $16) on the SIM card at the start of the season. The beneficiaries can withdraw the money by visiting an M-PESA agent.

The use of M-PESA to distribute the aid ensures that the money is delivered accurately and securely, with Safaricom taking full responsibility for the cash from the time it is deposited in its account until the time it is distributed directly to the beneficiaries. This is just the latest example of how mobile phones, and mobile money transfers, are being used to help the world’s poorest citizens.


MDG 3: Promote Gender Equality and Empower Women

Over 50% of M-PESA’s 15 million users are women.

M-PESA provides women with financial security, giving them an independent place to store and manage their funds. The service also provides women a means to access financial services such as savings accounts, insurance cover and micro credit loans—previously unable to be accessed without a formal bank account.

Many Kenyan organizations have partnered with M-PESA to provide services that empower rural and urban women.  For example, the Kenya Women’s Finance Trust (KWFT) is a deposit taking microfinance institution that provides financial services to women. KWFT has integrated M-PESA as a means of accessing funds, receiving loans, and loan repayment.

Additionally, Women Enterprise Fund, a semi-autonomous government agency in the Kenyan Ministry of Gender, Children & Social Development has partnered with Safaricom to provide an easier, faster, more secure, and more efficient loan repayment method through the use of M-PESA. The Fund also provides business support services such as capacity building, marketing, promotion of linkages and infrastructure support. The Women Enterprise Fund is the only institution in Kenya that provides financial services to women in all of Kenya’s 210 constituencies.  The Women Enterprise Fund and KWFT—and their M-PESA enabled services—are a demonstration of the Kenyan Government’s commitment to the realization of the Millennium Development Goal on Gender Equality and Women Empowerment (MDG 3).


MDG 4: Reduce Child Mortality & MDG 5: Improve Maternal Health

According to the World Bank, Kenya is among the highest 15% of countries for maternal mortality, and the highest 20% for infant mortality.  M-PESA has partnered with the Kenya integrated Mobile Maternal Newborn and Child Health information platform—a partnership between the Kenyan Ministry of Health, World Vision, AMREF, Care, NetHope and other NGOs—that seeks to work towards Millennium Development Goals 4 and 5 on child and maternal health. The specific objective is to reduce the maternal mortality rate and the mortality rate of children under 5.

We believe that the mobile Health (mHealth) solution will help us achieve this by encouraging visits to health facilities for pre and postnatal women through SMS messaging, as well as by encouraging mothers to have hospital or health centre deliveries by providing electronic vouchers that an be redeemed for services at women’s health clinics.  M-PESA and Safaricom also facilitate electronic medical records, SMS reminders for check-ups, and detailed health information for pre and postnatal women.

Safaricom has also partnered with Changamka to launch the Changamka (Kiswahili for cheerful) card.  The program is a convenient outpatient savings scheme that enables mothers to save up for their antenatal and postnatal care via M-PESA. The card is very popular with women in low-income and rural areas and since its launch over 12,000 cards have been sold.


MDG 7: Ensure Environmental Sustainability

Water is life, and in most rural areas, women are tasked with the responsibility of fetching water, often having to walk long distances to get to water points. To address this, M-PESA—through Safaricom—partnered with Grundfos LIFELINK to provide sustainable water solutions to developing countries by combining proven pump technology, renewable energy and an innovative service platform, along with unique solutions for revenue management and remote monitoring. The unique payment system is facilitated through M-PESA. Since launch in March 2009, 38 LIFELINK water projects have been implemented, providing reliable access to water every day for nearly 100,000 people.  New water sources are at the center of the villages, and the water quality is tested and approved by government authorities, providing a radical improvement of the water service level in the community.

Kickstart, a global non-profit focused on entrepreneurial aid in Africa, is also successfully operating an M-PESA powered layaway program in Kenya known as “Tone kwa Tone Pata Pump”, Kiswahili for “Drop by Drop gets the Pump”. The layaway program funds man-powered irrigation pumps, which enable small-scale farmers to move from subsistence to commercial irrigated farming. In the past, a lack of purchasing power and limited availability of microfinance services has prevented many small-scale Kenyan farmers from buying irrigation pumps—a common challenge facing many men and women in rural and marginalized areas.

The M-PESA layaway program provides an innovative new solution to this problem, enabling farmers to make M-PESA payments of any amount, and at any frequency, towards the purchase of the pumps. The M-PESA layaway program enables small-scale farmers to make smaller payments via M-PESA on the irrigation pumps until the purchase price is paid in full, rather than paying for the pump in credit and adding interest to the cost. Kickstart then ensures that the irrigation pumps, which cost $70-$100, are ready to pick up when the final payment is made.

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