Editor’s Note: Michael Klein is the former Vice President of Financial and Private Sector Development of the World Bank Group and is currently Visiting Professor at Harvard and Johns Hopkins University.
Nairobi 2006. Making Finance Work for Africa is the topic. Bankers, officials of monetary authorities, regulators, representatives of the IMF and multilateral development banks crowded in the conference room of the Serena hotel to launch the new Making Finance Work for Africa report. When I arrived at the airport, it was hard not to notice the omnipresent Safaricom ads: “Roam with the largest herd”. Luckily, I had chosen to present at the conference on the potential for mobile money, branchless banking and the like. Just a few months later in March 2007 Safaricom launched its M-PESA service. Today—less than 4 years later—M-PESA helps some 60 per cent of all adult Kenyans with payment services and is all the rage in the world of microfinance, in Kenya and beyond.
M-PESA reaches all over Kenya. 23,000 shops, often within just a few meters from each other, proliferate in slums and villages. Changing money at these cash merchants is pretty much like buying any other product in a shop; consumers face no or few lines, take advantage of opening hours from early till late, and can find cash merchants close to places of business or residence. The benefits are numerous: life is easier and safer; money is harder to steal or lose; waiting at the bank is over. Mobile phones make it possible. The herd of roamers comprises most adults in Kenya. And they have voted with their feet and money: payment services are what they want from financial inclusion.