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They don’t draw interest, but they’re more widely accepted than debit cards

Posted by: on Nov 25, 2007 | No Comments

I refer to mobile banking systems in Kenya.

Last week’s Economist had a major story – and one of its Leaders (Editorials) about mobile banking. The best example in the story was from Kenya in Africa. Banking is very poorly developed in all African countries compared to the industrialized world. There are very big barriers to getting banking services ranging from anything like high costs of opening an account, very limited bank branches and services, remarkably bureaucratic needs to verify identity for banking – on a continent where identity documents are not always well available, etc.

So in Kenya, a country of about 37 Million in population, there are only 3 million bank accounts. But then consider this, their local mobile banking system, M-Pesa, is used by 1 million Kenyans ! So even if none of the people with a “real” bank account use M-Pesa, the mobile banking system has already cannibalized 25% of the total banking customer base in Kenya (and those whose math is not that strong, yes, the more there is ovelap, the greater is the cannibalization; if all who use M-Pesa had also a bank account, then the cannibalization would already be 33%)

Communities Dominate Brands: Still doubting that m-Banking has potential? In Kenya 25% of all bank accounts are mobile

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