Mobile telephony: Kenya’s not-so-silent revolution

by Rasna Warah, The Daily Nation, November 8, 2009

Usually, the only news about Kenya that the editors of The Economist deem fit to print is the dark and depressing type: stories of grand corruption, poverty and poor governance.  So it was refreshing, if not startling, to see a recent editorial in The Economist describing Kenya as “a success story” in the use and application of mobile phone banking. The editorial states: “By far the most successful example of mobile money is M-Pesa, launched in 2007 by Safaricom of Kenya. It now has nearly 7 million users — not bad for a country of 38 million people, 18.3 million of who have mobile phones.”

Described as “Kenya’s Debit Card”, this uniquely Kenyan innovation is now being replicated in other countries, including Afghanistan. This Kenyan success story, says Ken Banks, founder of kiwanja.net, represents both “a revolution and a revelation.” Figures released by Safaricom in March this year show that an astounding 550 million Kenya shillings, or roughly US$7 million, is transferred daily using M-Pesa.

Although each transaction has an average value of 2,500 shillings, it all adds up in unexpected ways. The editorial in The Economist cites a study that shows that the income of Kenyan households using M-Pesa have increased by between 5 and 30 per cent since they started using mobile banking.

A detailed report in the same edition cites a study by a researcher at the London School of Economics who found that an extra 10 mobile phones per 100 people in a typical developing country added 0.6 percentage points of growth in gross domestic product (GDP) per person.

Mobile phone banking in Kenya has shown that when the formal sector fails the poor and the marginalised, technology and innovation can come to the rescue in amazingly successful ways. “People in developing countries are rarely simple, passive recipients of technology and rarely wait for outsiders to provide solutions to their problems,” writes Banks.

In Africa, bad roads, poor communication infrastructure, lack of electricity, rigid rules for formal banking and endemic poverty may have hampered economic growth and development, but mobile phones have provided solutions where none existed previously.

In Uganda, mobile phones hooked up to spare batteries are attached to bicycles (affectionately known as “Bodaphones”) which transport passengers to where the business is. The mobile phone business has also dramatically increased employment in the informal sector.

In 2007, the Uganda Communications Commission noted that while the formal ICT industry in the country employed a little over 6,000 people, informal employment in the industry was estimated at a staggering 350,000 people.

IN KENYAN SLUMS AND VILLAGES where electricity supply is either non-existent or erratic, “charging kiosks” have sprung up, allowing mobile phone users to recharge their phones for a small fee while they wait. People who have never seen the inside of a banking hall are now using their mobile phones to pay for everything ranging from school fees to fertiliser.

(A few weeks ago, a Maasai woman vendor in Narok “sold” me a necklace without any money changing hands. When she realised I did not have enough money to pay for the necklace, she asked me to send her the money via M-Pesa the following day, which I did.)

Kenyan innovations using modern communication technology have had a revolutionary impact socially and politically. In January 2008, as post-poll chaos threatened to tear the country apart, a group of Kenyans in Nairobi and the Diaspora launched Ushahidi, an online campaign to draw local and global attention to the escalating violence.

According to Joshua Goldstein and Juliana Rotich, two of the founders and developers of the software, within weeks, Ushahidi had documented in detail hundreds of incidents of violence that would have otherwise gone unreported.

Ory Okolloh, the South Africa-based Kenyan lawyer and co-founder of Ushahidi says that the innovation has now become a platform that allows Kenyans to report any event or incident (not just a crisis) via the Internet, mobile phone or Twitter. The event is then plotted on a map, allowing users to identify the exact location of the event or incident.

Kenyans have also become adept at innovating to respond to the realities of living in this crime-prone country. This year, George Njoroge of East Africa Data Handlers launched a software known as Ujanja that tracks stolen mobile phones — an innovation that came about after he was carjacked and robbed of his mobile phone, computer and other valuables.

Necessity is the mother of invention. In Kenya, poor infrastructure and poverty have sparked unique innovations in ICT applications, which are being recognised globally and which could lead the country out of the quagmire of never-ending underdevelopment.

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