Digital payments in Kenya have been ruled by Safaricom through its revolutionary MPesa services. This is despite there being other local players like Airtel Money and Telkom’s T-Kash competing for the local share of mobile money transfer.
Safaricom has gone global targeting international remittances and linking with global players like Western Union and Pay Pal to make trans-border transfers.
However, during the just concluded East Africa EuroMoney Conference locally hosted by Central Bank of Kenya, the CBK governor Dr Patrick Njoroge noted that these innovations though first tested and embraced in Kenya, must not sleep on their laurels.
Dr Njoroge noted that Kenya was able to enjoy the innovation and domesticate the technology, which has drawn the admiration of global players and replicated world over.
However, it is the entry of global players like WhatsApp, WeChat, Alipay and Apple Cash which have made it easier to transfer money, purchase items using a digital wallet for a greater global audience but still eating on what Safaricom enjoys.
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These organisations, Dr Njoroge said have a bigger budget and technology prowess which would give local players a run for their money. Both Apple Pay and Samsung Pay have been embraced in the US and Europe while WeChat and AliPay are greatly used in China.
“In marathon running it is called slip-streaming, we are in that stage right now. We’ve proven mobile money works to witness the adoption of the service by people who have not encountered technology before. All the initial problems and concerns on mobile money were ironed here and now the world is ready to pounce,”he said.
The East Africa EuroMoney Conference is a set of conferences organised in different places around the world and they look at the interplay between money regulations, innovation and financial inclusion.
The conference brought together over 300 key players in the fintech space – governments, regulators, banks, payment providers and innovators – in one room, to discuss why financial services need reinventing and what are the drivers for reinvention as well as regional trends in regulation with a conversation with central banks representatives and innovators.
Keynote speakers at the event included Dr Patrick Njoroge (Governor, Central Bank of Kenya), Selina Xu (Senior Vice President, CreditEase), Amolo Ng’weno (Chief Executive Officer, BFA), Dr Kenfield Griffith (Chief Executive Officer and Co-founder, mSurvey) and Peris Bosire (Co-founder and Chief Executive Officer, FarmDrive).
Banks in Kenya have been going through transition as they plan to set counter competition being brought about by mobile phone related technologies. Traditionally, banks in Kenya have had tough rules for availing credit to clients making financial inclusion hard for certain populations.
Then, came the mobile phones and recently, mobile lending apps which though unregulated have revolutionized how consumers access credit. Some are known to be effective, but as the CBK governor Dr Njoroge described them, they are ‘shylocks on steroids’.
“These apps look very good and attractive and are well coded for users to use. But behind them there are powerful individuals who are not keen on following rules set for fair financial credit access and inclusion.
These apps have pushed the local banks to set up lending schemes with Barclays Bank setting up Timiza with unprecedented adoption of its credit scheme and at least five banks setting up Stawi.
CBK is planning tough measures to curb these apps as bring sanity to the industry. A report by Financial Services Deepening- Kenya on digital lending shows there are at least 49 online credit providers in the country.
