Kenya has been mentioned in the Harvard Business Review as one of the African countries emerging as leading innovators of Financial Technology (FinTech) in the world.
Harvard Business Review says Nigeria and Kenya have emerged as FinTech hotbeds, and are using inexpensive, accessible tech to mobilize consumers in ways never seen before.
“The definitive exemplar is Kenya. The country has seen skyrocketing mobile penetration rates, with subscriptions surpassing the total population amount by 12%, and FinTech innovations have followed,” HBR said in a report on February 18.
It gives the example of the telecommunications giant Safaricom, which contributes five per cent of the county’s GDP and in 2007 introduced M-Pesa money transfer service. It now has about110,000 agents throughout the country to conduct transactions in person.
HBR also cites Equitel, a mobile virtual network operator competing with M-Pesa, is pushing boundaries for financial inclusion even further by offering a full suite of banking services on mobile devices.
“Conceived equally through ingenuity and necessity, Equitel is a new type of hybrid firm: a telecommunications company born of a bank. Parent company Equity Bank collaborated with international telco Airtel to give users a product coming from two longstanding companies.”
“It sent agents throughout the country, even to remote areas where other banks and telcos had not ventured, to demonstrate usage. Equitel grew to capture 22% of the mobile money market in just five years through this locally-focused strategy” HBR says.
It notes that the companies have vastly expanded financial inclusion in the country.
“While financial inclusion in Kenya was at just 26% in 2006, today 83% of the population has access to at least basic financial services. Besides simply becoming exports, these innovations have become models for other African countries,” the report says.
Twenty-four countries have committed to a Digital Economy Blueprint following Kenya’s example. Results are spreading — the GSMA estimates that West Africa’s mobile penetration has doubled over the past decade, with mobile payments and banking driving development in its 15 member states. By the end of 2018, the region saw an increase of 23 million mobile money accounts from the previous year. Women, the rural poor, and the displaced are especially benefiting by the use of FinTech as their gateway toward empowerment.