nd Avenue Afri rica ca We Week-NM NMMU MU 2 nd nue Ca Campus - - PowerPoint PPT Presentation

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nd Avenue Afri rica ca We Week-NM NMMU MU 2 nd nue Ca Campus - - PowerPoint PPT Presentation

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Ali lice Makochi hieng eng- Sp Speaker er & Le Lecturer er nd Avenue Afri rica ca We Week-NM NMMU MU 2 nd nue Ca Campus pus Key words- Innovati vation, n, Afric ica, a, mobil ile e money, ey, fin intech ech, , in

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Ali lice Makochi hieng eng- Sp Speaker er & Le Lecturer er Afri rica ca We Week-NM NMMU MU 2nd

nd Avenue

nue Ca Campus pus Key words- Innovati vation, n, Afric ica, a, mobil ile e money, ey, fin intech ech, , in investments stments

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  • A. Makochieng Africa Week 24th May

2017- NMMU

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GREEN AND SUNNY NAIROBI

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Mpesa’s History Mpesa’s financial figures Mpesa’s impact and innovation Future developments

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 For years, the emerging markets…Africa in

particular has looked to the West for innovation and ideas to manage their financial systems.

 Except in this one area where globally, the

world is looking to Africa for ideas…in the mobile money transfer technology

 80 % of the worlds mobile money transactions

  • ccur in East Africa, with Kenya as the leading

country globally in this. The Economist ist 2017-

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 The big banks reaped higher returns, charging

expensively for poor services and looked relatively successful- but with very unhappy customers

 These mainstream banks were monopolistic,

considered themselves too big to fail, and not innovative to serve a large unbanked market.

 African economies, long underserved by the

mainstream banks, have leapfrogged into fintech- banking meets technology

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Safaricom started Mpesa in 2007. The idea was- ‘what if we allowed people to transfer money using their mobile phones’… The Government of Kenya, Safaricom and the DFID (UK) put in the initial investment for a trial mobile money transfer technology Two British scientists and the Kenyan team (Including the University of Nairobi) started working on this silly idea… NB NB- Universities, Govt & Industry collaboration

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 Even the name- Mpesa –it sounded so

African that one of the team members said it will not take off-

 But, Safaricom stuck to their gun that

that is the name….Mpesa- ‘money’ in Swahili

 With a ready market of many unbanked

adults- it quickly took off; leaprofrogged into fintech

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Mpesa has grown quickly and is a cash cow for Safaricom > $30 million per day. 40% of Kenya GDP passed through Mpesa. Mpesa has 29 million subscribers, and is available in 10 countries across Africa, Asia and Europe Mpesa revenues for Safaricom was Ksh 55 billion ($ 567 million) for the year ending March

  • 2017. In total, Safaricom made Ksh. 200 billion

(1.9billion USD) >> R25 billion; 32% rise in Mpesa revenues

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 Mpesa’s market share of mobile payments

69%, no other mobile payment has these impact (even Square by Twitter CEO J.D)

 Africa has 1.1 billion population, 70% of

which is unbanked, with 557m mobile subscribers (GSM Association)

 330 million Africans accessing the internet

with mobile payments as the big

  • pportunity, and still growing

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Africa is very much in need of user-centered innovation… Focus innovation on a problem that is bugging a lot of people. Mpesa focused on serving masses

  • f unbanked population. Has 150 000 agents

Mpesa has been able to lift many people in Kenya out of poverty by stimulating rural economies especially in agriculture, retail, energy and transportation… 2% of households

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MAY 2017

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  • 1. Develop an incredible product
  • 2. Mpesa meets these 3 innovation questions:

Can you Deliver- Connect-Scale?

  • 3. Mpesa connects with many service

providers from airlines, banks, the stock exchange, pay TV to credit providers

  • 4. Have an agile business model… MPESA

keeps improving and scaling up

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5. Solve a deep problem- a real need for people (many people)

  • 6. As you show traction- build a community –

along the financial value chain - of customers, suppliers, investors- gain scale

  • 7. MPESA is linked to banks and many service

providers hence seamless movement of money

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 Africa will build the future… Mark

rk Zukerb kerber erg

 "This is where the future is going to be

built," Zucker kerberg berg

 He said this in his first stop in Kenya in May

2016 ... on Keny nya's a's most famous innovation, the M-Pes Pesa mobile money transfer service

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 Factor

  • r condi

diti tions

  • ns- Kenya’s economic base is

service-oriented ‘intangibles’ as opposed to dominance by commodities- hence the country has real capabilities in an educated workforce with skills and research capabilities

 Demand

and condit itions ions from customers- Kenyan’s have an experimental mentality and are risk takers, ready to try new technologies. The first CEO of Safaricom Michael Joseph called them pec ecul uliar ar Ken enyans yans:-)

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CURIOUS!

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 Firm strate

ategy gy- Safaricom’s strategy,

  • perational excellence has driven Mpesa-

they focused on it. The presence of other mobile rivals spurred competition thus driving Mpesa’s service delivery and growth

 Government

vernment inve vestment stment- The best investment that the Government of Kenya has ever made

 Chanc

ance- Mpesa innovation was triggered by random events and the right timing

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 Safaricom- Vodacom deal…  Safaricom is set to expand its M-Pesa

financial services across Africa.

 South Africa's Vodacom has just bought

a 35% stake in the Kenyan telecoms

  • perator from Britain's Vodafone.

 This deal is important for Vodacom and

it paid Ksh 266.6 billion (2.4 Billion UK Pounds)…

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MPESA CAN SOLVE SASSA PAYMENTS, RSA

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 More innovation & linkages via Mpesa.  Users in Kenya can buy Government

bonds in the NSE, a first in the world… besides other services

 Mpesa launched a card payment

system- in May 2017, directly competing with Visa and Mastercard

 With mobile technology, 4th th industr

dustrial ial re revolut volution ion will be Africa’s, via fintech

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 More in

inter-conne nnecte ctedn dness ess across the continent; and across industry boundaries

 Investment by government in the

in infrastr astruc uctur ture to bring down the cost of data-

 Changing educat

ation ion syst stem em to include more coding and tech hubs. The iHub, Silicon Cape

 Hybrid

id education- of Engineering and Management degrees

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 “This continent needs to be a future hub

  • f global growth, not just African

growth”- President Obama, 2015

 When Obama praised Kenya’s tech

entrepreneurs during his trip there in July 2015 during the Global Entrepreneurship Summit (#GES2015)

 Can Africa lead the future in innovation?

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Thank you all!

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