DEVELOPMENT OF DIGITAL FINANCIAL INCLUSION IN KENYA
FRANCIS WANGUSI DIRECTOR GENERAL/COMMUNICATIONS AUTHORITY OF KENYA
WHAT IS THE SUCCESS STORY? Active mobile money Customers 12.5M Registered mobile money accounts 26.2M Mobile money transactions per day 30.0M Adult population using mobile money 59% Mobile Money transactions in KES/month 192.6BN Mobile money agents 120,000 By 2006, only 185,000 of the adult Kenyans were formally banked, but by March 2014, 26.2M accounts had been registered on mobile money platforms, 59% of which were active with a total of 116,196 mobile money agents. KEY STATISTICS ON MOBILE MONEY IN KENYA - MARCH 2014 (SOURCE CENTRAL BANK OF KENYA)
THE SUCCESS STORY Motivator with its blue print of making a middle income economy by 2030 Motivator with its blue print of making a middle income economy by 2030 Financial Regulator/driver Financial Regulator/driver ICT regulator/driver ICT regulator/driver Deepened and broadened the penetration of ICT and Financial services Deepened and broadened Financial services through progressive financial regulation Deepened and broadened penetration of ICT services through progressive financial regulation
DRIVERS OF
Policy & Regulatory Actors Policy & Regulatory Actors MNOs MNOs Mobile Money Platforms Mobile Money Platforms KEY ACTORS IN MOBILE MONEY
EVOLUTION OF MOBILE MONEY SERVICES IN KENYA
DEVELOPMENT OF MOBILE FINANCIAL ECOSYSTEM IN KENYA
2005
• Safaricom finalizes the development of the framework for M-pesa pilot as microfinance repayment tool
• CBK gives Safaricom an authorization to pilot the M-pesa framework
• The M-pesa pilot commences in town called Thika in Kenya
2006
• M-pesa pilot successful complete
• Safaricom seeks further authorization to convert from microfinance to mobile money transfer
• The Financial Regulator directs Safaricom to further information regarding M-pesa legal structure
2007
• CBK gives an objection to the conversion M-pesa from microfinance to mobile money transfer platforms
• The first mobile money transfer launched in Kenya
2008
• M-pesa facilitates bill payment and bulk salary payments
• M-pesa customers begin getting M-pesa services at Post bank branches
• Introduction of cardless ATM withdrawals to M-pesa customers
2009
• National treasury gives M-pesa a clean bill of health
• GOK exempts all financial services including mobile money transfer from VAT
• Amendment of the financial act 2009 allows the use of agent banking
• GOK allows M-pesa customers to receive directly international remittances through M-pesa platform
• Some microfinance okeys customers to make payments through M-pesa (SMEP & MFL)
• Insurance companies begin to insure customers using M-pesa (Kilimo)
• Partnership between Kenya power and Safaricom to enable KPL customers pay bills through M-pesa
• Another partnership with Grundfors enable rural households to pay for safe water through M-pesa
• Celtel Kenya LTD and ESSAR mobile Kenya LTD introduce competition to M-pesa through Launch of their mobile money platforms.
DIVERSITY IN DIGITAL FINANCIAL SERVICES Flexible e-Banking on Mobile Platform Easy & Fast Mobile Saving & Loaning Services Accessible Bank Saving & Lending Service The mobile money eco-system now integrated under the National Payment System – Created more confidence and resilience through oversight. The mobile money eco-system now integrated under the National Payment System – Created more confidence and resilience through oversight.
FROM MOBILE MONEY TRANSFER TO DIGITAL INCLUSION
Rapid transformation from P2P to P2B, P2C, B2B and vice versa
Rapid transformation from P2P to P2B, P2C, B2B and vice versa
DFS HAS ACCELERATED E-COMMERCE GROWTH AND EMPLOYMENT CREATION The highest no. of transactions take place within the mobile money markets through selling of goods and services, including cattle trade as well as P2P money transfers Booming business in small markets being accelerated by Mobile financial services
GOVERNMENT WHIPPED TO DIGITAL FINANCIAL PLATFORMS TO IMPROVE SERVICE DELIVERY Enhancing the way every Kenyan accesses Government services Konza the first smart city in Kenya being built for digital compliance including digital financial inclusion
CHALLENGES FACING DIGITAL FINANCE SERVICES IN KENYA Managing Competition Unprecedented cases e.g Thin SIM for Mobile Money Dynamic Innovations requiring Dynamic Regulations Cyber Security Threats & Fraud
Digital financial inclusion is part of the enablers accelerating the country’s aspiration of being a middle income economy by 2030.
Kenya’s experience underlines the importance of PPP and international cooperation as the way to go in order to fully exploit the potential of DFS and DFI.
CONCLUSION
