Archives for posts with tag: Kenya

This will be the first in our new series, “Mobile Market Look”, where we look at mobile markets in Africa and other emerging countries around the World. Kenya is one of the hotbeds in terms of mobile innovation and sophistication and we hope you enjoy this article and please feel free to leave any comments you may have.

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Africa has been growing at an unprecedented rate and Kenya is one of the fastest growing tech and mobile markets in the World. Known as “Savannah Silicon Valley”, Kenya is home to over 500 startups in the mobile and digital industries. Kenyans are extremely tech savvy and 70% of the population owns a mobile phone, with 16 million Kenyans accessing the internet through their phones. Nairobi, the capital of Kenya, is home to the ihubs, incubator space for the tech community that includes 10,000 members an over 150 incubator start-up companies. Companies such as Google, Intel, and Samsung have a presence in Nairobi and IBM set up its first African Innovation Lab in Kenya. If you are in the mobile or tech industry, whether as a company or an investor, Kenya is a country you should get to know and want to do business in.

Kenya is the most developed economy in East Africa with a good education system and a strong business environment. Kenya is a young country with 70% of the population of 44 million people under the age of 35. Kenya also has its issues as 50% of the population lives in poverty and unemployment, although officially listed as 10.5%, can be as high as 40%. There are obstacles, but there are also opportunities. And no opportunity is bigger in Kenya at this time than the mobile money and mobile payment market.

Kenya’s Mobile Market Landscape

Kenya phones Kenya has the most sophisticated mobile money ecosystem in Africa, and maybe the World. Infrastructure improvements, and lack of rigid regulations by the Central Bank of Kenya and the government, have led to market growth and an increase in digital services. M-Pesa, established by Safaricom in 2007, started the current mobile payment revolution and now transacts over $5 billion annually which accounts for 17% of Kenya’s GDP. Over 2 million mobile money transactions take place every day and according to MEF studies mobile money and mobile payments still present the greatest opportunity for growth in Kenya. It is estimated that 85% of the population has used mobile money at some point and most Kenyans prefer mobile money to cash because of the ease of use and the safety. Most African nations are cash-based and people still carry large sums of cash on them, especially when they are sending money to relatives in remote parts of the country, so mobile money offers a safer and easier alternative. Kenya’s financial institutions have picked up on this and are jumping on the bandwagon and creating their own mobile money products. Equity Bank has its own M-Kesho mobile money product and I&M Bank has its own prepaid Safari Card available on the M-Pesa platform.

Even with growth and prosperity Kenya faces security issues and economic problems. There have recently been terrorist attacks on the Kenyan coast by Al-Shabaab, a Somali terrorist group associated with Al-Qaeda, and no one should forget the terrorist attacks that took place at the Westgate Mall in Nairobi over a year ago. The country has a high poverty rate and weak infrastructure and on the business side there is a lack of capital and belief and faith by investors towards the Kenyan market, and also the Sub-Saharan African market as a whole. Even the mobile market is experiencing its own issues. There is a current price war which has benefited the consumers by leading to decreased prices and more mobile subscriptions, but has created lean profit margins and less profitability for the mobile operators. There is also the concern of the dominance of Safaricom and M-Pesa who currently has the dominant mobile marketshare of 70%. Other mobile operators such as Airtel, Yu, and Orange have a presence but pale in comparison to Safaricom.ihub Kenya

Obstacles do exist, but even with these problems and many others the mobile industry in Kenya is experiencing good times. Mobile phone penetration is 78% in Kenya and Africa had an annual mobile growth rate of 82% between 2000 and 2013, highest in the World. There are currently 500 million mobile subscriptions in Africa and there is expected growth in subscriptions of 50% over the next 5 years. Kenyans have also taken to smart phone technology and 67% of all phones sold in Kenya are smartphones. Kenyans like to listen to music, play games, look for sports updates, and watch TV and video on their phones. They also like social media and Kenya has the second most Twitter users in Africa behind South Africa and the second most Facebook users in Africa behind Nigeria. So the promise and potential is bright and the opportunities for business and investment is maybe the best it has ever been. Kenya is definitely a place you should want to be!

Please visit MMIT at www.mmitonline.com and subscribe to our newsletter by contacting us at newsletter@mmitonline.com

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New mobile payment product M-Iflo launched to minimize risks as it is of great concern in the African markets.

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MMIT in partnership with Bango, a leader in mobile payments, has officially launched a product called M-Iflo to revolutionize the security of mobile payment environment in Sub-Sahara Africa. The M-Iflo product provides a safe payment solution that enables online transactions for digital content, which will unlock many opportunities in the world of mobile payments for Africa.

Africa is rapidly becoming a mobile hot spot with many consumers’ displaying their natural ability to quickly adapt to new technologies introduced to the market. The product is tailored to the African market by directly addressing the concerns surrounding the safety of payments and reducing the risks of transactions, which remains a barrier to doing business for new entrants into African markets. As a result of merchants’ fears regarding the technological and political risks factors, Africa has in many ways been limited or excluded from many of the break through technologies within the areas of mobile commerce and mobile billing. Jide Akindele, CEO of MMIT commented on these issues explaining, “unfortunately corruption remains a substantial risk within the mobile money industry in Sub-Saharan Africa. This has resulted in a reluctance from the world’s app stores and mobile brands to engage the African market.”

M-Iflo essentially is an intermediary between mobile merchants and mobile wallet providers. The product acts as a payment verification portal that provides a secure way for mobile content providers to reach African markets. This enables consumers of mobile wallets to select their wallet provider as a form of payment at the check out page of the transacting website. M-Iflo additionally allows those without mobile wallets to buy content from major app stores by using a top up card that can be purchased at retail outlets. Upon purchase of the top up card, codes are provided for the customer to enter upon checkout of a merchant site to complete the transaction online.

M-Iflo minimizes associated risks with online transactions and allows merchants to be paid up front, thus creating a work around to the common complexities of conducting business in Africa. This addresses app stores and merchant concerns of payments being held up in one country based on bureaucracy, fraud, or changes in regulation. Bango CEO Ray Anderson said: “There’s a smartphone boom in Africa and a frustrated demand for digital content. App stores and other merchants have been waiting for the reassurance of M-Iflo, which limits the risk of doing business in Africa, and has been designed to suit the ‘cash up front’ instincts of the African market.”

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M-Iflo has already integrated with major mobile wallet providers in Africa, including Mobipay in Kenya, Stanbic IBTC Mobile Money in Nigeria, and is working to add more to the list of partners. Jide Akindele, CEO of MMIT stated, “Merchants in the western market are yearning for a suitable payment process platform that minimizes their risk in the African market. We believe that our M-Iflo platform gives our clients that capability to do so. We look forward to opening up access to content store owners that are looking at the African market via Bango and MMIT’s Mobile money payment processing platform.”

MMIT is looking forward to this summer as the product officially launches in Nigeria with Stanbic within the coming weeks followed by Kenya’s launch later this summer.


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A look at the predicted mobile payment growth in Nigeria

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