In February 2011 Michael Joseph, former CEO of Kenyan mobile phone operator Safaricom, was appointed by the World Bank to spearhead the expansion of mobile banking worldwide. Joseph grew Safaricom from five employees to a business with an 80% share of the Kenyan mobile phone market. But his most lasting legacy is undoubtedly the introduction of M-PESA, the company’s flagship mobile payment system, and the most successful of its kind in the world. M-PESA facilitates more transactions each day in East Africa than Western Union does in a year, globally.
Joseph’s appointment highlights the growing importance of mobile banking to businesses and donors alike. But it also signals a shift in thinking about how to provide poor communities with access to financial services. In sub-Saharan Africa, one in five households have access to formal financial services, whether bank accounts, microcredit or insurance. The majority of people rely on informal methods of saving, sending and receiving money. Whether storing savings at home or sending money to family living in rural areas, the majority of Africans take disproportionate risk when managing their finances … //
… There is some pressure for “inter-operability” in Kenya, but Safaricom claims that it “[risks] killing innovations in the money transfer market”. The Central Bank of Kenya has backed the company. But in countries where the mobile phone market is not dominated by a single service provider, network-agnostic mobile banking services could be a more productive approach to replicating M-PESA success. The progress of mobile banking in Nigeria will be a telling indicator for the viability of mobile banking elsewhere in Africa. (full text).