Mobile Banking, an African Miracle
Last updated on March 29th, 2017 at 07:07 pm
So powerful a tool it is that the UN Economic Commission of Africa elects it as a means to tackle the endemic and to some proportions, pandemic plague of the 21st century : World poverty.
The global group points out that technology, more precisely information technology and mobile commerce to be exact, enable SMEs not only have better market access but also serve their customers better.
By facilitating the business of SMEs, information technology vouches for itself as Small & Medium Enterprises are seen as the vehicle that will lift the world’s poor from the suffocating shackles of poverty.
Moreover, centers agitating for human rights acknowledge that technological advances like the Internet have bolstered the human rights crusade by facilitating activities like the monitoring of incidents of human rights violations, advocacy issues and dissemination of justice.
Such noble efforts aimed at protecting human dignity have blossomed in the global information village.
What’s more? Inter-governmental discussions aimed at resuscitating the 2015 Millennium Development Goals crusade are narrowing down on information technology and betting on the mobile phone revolution currently in progress in Africa, to liberate the continent by injecting some life into such global efforts.
This is because reducing world poverty levels inexplicably calls for improvement of livelihoods in Africa; a continent where a majority of the failings of the 21st century are incubating and hatching in oceanic proportions and at mach speeds.
Information Technology laying down the Pipes
So what exactly is Information Technology? IT is the industry of computing, microelectronics, broadcasting and telecommunications. Naturally so, it therefore occupies itself in three key areas:
First; content – ranges from works of fiction to company information availed either in the form of the ‘written word’ or as audiovisual media.
Second; networks -epitomized by the increasing penetration and subsequent use of the Internet world wide. This is evident in the unprecedented growth of telecoms in emerging economies and huge untapped potential in the developing and under developed regions of the globe.
This momentum in ’emerging economies’ gives a boost to the steady growth already being experienced in the more mature communication industries of the developed world.
Third; Devices – in a line, technological advancement is all about the merging of technologies. Take for instance the observation that telecommunication networks have recently acquired additional use as conveyors of audiovisual material like videos and are also increasingly finding use as tools of money transfer.
It is this foray into commerce by technology that is generating so much excitement. In a way, with IT providing the backbone infrastructure, money has evolved once again.
In the 13th century, cowrie shells spread out from China to the rest of the world. Emperor Constantine gave us the ‘solidius’- a 4.5 gram coin made of pure gold. The 21st century it seems, is all about e- commerce and it’s ‘spin off’ m-commerce.
E- Commerce v M-Commerce
Whereas e-commerce entails the electronic handling of the entire business transaction process; from marketing to procurement, selling, buying and supply chain management.
E-commerce involves such activities like e-booking, e-ticketing , e-shopping and online banking.
M-commerce on the other hand, differs in the respect that M-commerce relies on wireless networks, specially designed operating systems and increasingly multifunctional mobile devices to carry out financial transactions.
M- commerce is therefore explained by some scholars to be the scion of the marriage of communication and commercial channels.
Through mobile phones, millions of people across parts of Asia and Africa are doing more than just chatting and texting. They are accessing the Internet, downloading music, doing their banking and conducting money transfer. All this, the ingredients of mobile commerce.
Retail Banking Paving Way For Kiosk Banking?
Effected via a network of mobile phone service provider affiliated kiosk money vendors in Asian economic powerhouses like India and more recently in East Africa’s largest economy: Kenya, the kiosk is replacing the banking hall.
Convenience, ubiquity, personalization and localization are the key value bargains for the consumer. Gone is the hustle of queuing in banking halls, gone is the inconvenience of strict banking hours, away with swollen feet courtesy of doing the mill window shopping for that bargain. In with on the go sms alerts on the progress of a bank transaction, up to time traffic updates and news alerts .
For a few cents, you can even personalize your call waiting tone and replace the traditional ring din with music from your favourite artist. All this from a hand held device- the mobile phone.
The value offering from m-commerce has thrust a tantalizing prospect into world of traditional commerce. While the motivation for a majority of businesses that have adopted m-commerce platforms in dealing with their clients has been gaining and retaining market share, the origin of this spring of change is the market.
M-Pesa & M- Kesho
In the backdrop of what is being billed as the worst global economic meltdown since the great depression, focus is somewhat shifting to newer markets such as Africa. Additional statistics that show that a majority of Africa still remains un-banked serve as seed for this latest IT revolution. Take for instance the story of M-Kesho, a mobile banking product introduced by the market leader in Mobile Telephony in Kenya- Safaricom.
A product aimed at allowing saving in small increments , it roped in 700,000 accounts in weeks of operation. A figure way above the total number of bank accounts in Kenya’s GDP(PPP) 62.56 billion economy. Some recent estimates point out that M-Pesa, the mobile transfer service run by the same company, will transfer an equivalent of 20% of Kenya’s GDP in 2010! Talking of a revolution.
Update: Safaricom Launches M-shwari
In collaboration with CBA ( Commercial Bank of Africa) Safaricom now runs a mobile loan facility which allows subscribers to save as little as 1 Kenyan shilling through the M-Pesa platform. Through the savings, the subscriber can access short term loans.