Approval Pending: A Challenge to M-Pesa’s Mobile Money Dominance in Kenya

Before we start getting excited, we need to remember that MNO is completely different from MVNO. First, an MVNO is at the mercy of MNO’s agency network. A bank won’t compel an MNO to expand mobile agency and we are not talking of branchless banking here. An MNO may not want to ride on a bank’s agency banking network for obvious reasons. Second, there is the sim card issue. Who wants to keep interchanging sim cards to transact? Third, mobile money services ride on telecommunication and not the other way round. Fourth, compare apples with apples; a popular bank is a popular bank among banks for banking services. People would choose a telecommunication company with banking services than a bank with telecommunication services. Finally, however much you deodourise bank pooh, it will never smell like a rosy telco transfer even when common products are put in the mix. Telcos are associated with pleasure while banks are associated with pain. Fifth, If you want to test the power of a brand, especially when there is a smell of applecart upset, outright war would see Safaricom recruiting and incentivizing irresistibly, many retail outlets from petrol stations to local shops to supermarkets across the country into mobile agencies. If by now competing MNOs were able to do that, they would everywhere across the country. But we know them as crawling strugglers. That will be when brand power will be appreciated. M-kesho was the best product that never was, and corporate egos denied Kenyan the best service ever conceived. Rebound options won’t work; watch this space.

Thanks Beth. In one of our Nairobi newspapers today, Business Daily, Mr. Michael Joseph, Safaricom’s first CEO was quoted saying of M-pesa ” We were particularly fortunate to have a loyal customer base that trusted us, a banking regulator who believed in M-pesa and worked with us to make it happen, and entrepreneurial Kenyans who wanted to be agents”. Safaricom’s target for a year after launch was 350,000 subscribers. They got 1.3million users in 9 months. Joseph says ” What followed was total surprise. M-pesa had signed up 1.3 million users in 9 months, and marked its first birthday with 2.07 million customers-who had moved a total of Ksh 14.8 billion in person to person mobile transfers” Let’s note the Key words: TRUSTED, BELIEVED, WANTED.

Perhaps we burn our brain cells thinking of strategy which don’t work while luck has a role in success. Several forces aligning to deliver success in a way that shocks the innovators is perhaps what needs to be studied. Was it a coincidence that just around 6th of March 2007 when Safaricom was launching M-pesa, there was a friendly regulator, customers ready to trust, entrepreneurs willing to embrace a new business model? Was it Serendipity? Dr. Susan Johnson in her research to get answers on this globally intriguing M-pesa phenomenon summarized it as “RIFT REVEALED”. She concluded that Safaricom must have bumped into a gap that had gone undiscovered for a long time and just plugged it. But Michael Joseph in his modesty never acknowledged having seen the gap in the way it turned to be. Of course he must have seen an opportunity like any other entrepreneur but not as dramatic as Dr. Johnson described it. He was just trying. He wasn’t sure. His projections were extremely conservative(realistic to him at that time). So, he didn’t come out as a genius who saw the gap and decided to take advantage of it. This is unlike James Mwangi of Equity Bank who clearly saw a gap in the poor being neglected by banks. Facing near bankruptcy at Equity Building Society which he managed then, he SAW and BELIEVED that the future of the financial services in Kenya depended on the struggling BOP. He knew in himself that it was to take time to achieve his goal of banking the poor but he was to do whatever it took to make it happen. No bravado at all. Pure humility, trust and faith. The rest is history as Equity Bank is now the Kenya’s leading microfinance based bank in the country commanding a clear third of the entire accounts holding in the country and growing. Could the two institutions and their pioneer leaders be holding insights we can learn use to build success from pure trust at the BOP?

We in the financial inclusion, what are we holding onto to believe that we shall deliver to the excluded, what we have clearly visualized? At what point do we anticipate that things will fall in place to deliver the success? Are our hopes and actions contingent upon many forces falling in place in a synchronicious way to deliver financial inclusion? Are we just trying like Michael Joseph hoping to be pleasantly surprised or like James Mwangi, we are committed and convinced that our vision will come to be, slowly by slowly, however long it takes?