Kenya has shown just how popular mobile banking has become. It was easier to pay for a taxi ride there than it was anywhere else in the world back in the early 2000’s. It is fascinating that a country as poor as Kenya was so far ahead of the game when it came to mobile banking. It may not have been as fancy as an app that we use but it did the job, it allowed people who didn’t have bank accounts to buy. You can send money to someone as quick as it took for a text message to arrive. People could pay for their school fees and other bills.
Financial inclusion is a key driver in tackling poverty and boosting economic growth not only in places like Kenya but also here in the UK. I also believe that trade not aid is important to some of the poorest countries but that is a different topic.
Banks like Starling can help everyone in the UK who have been shunned by the ‘big banks’ to not only get an account but also have financial inclusion. A Study by MIT and Georgetown University concluded that M-PESA has lifted over 194,000 families (2% of Kenyan households)out of extreme poverty. That’s financial inclusion right there. I love this term financial inclusion.
Here in the UK 21% of people in 2012 used a banking app to access their account but that shot up to 61% by the time 2017 kicked off so says a report from the BBA. They also suggest:
Number of banking app logins reached
4.9 billion in 2016, up 34% over 2016.
• 159 customer logins each second.
Number of banking app transactions reached
932 million in 2016, up 57% over 2016.
• 30 customer transactions every second.
Mobile money or Fintech…call it what you will but whatever it is it is a consumer led revolution in banking led by you, started in Kenya. M-PESA has a great deal to answer for and it’s all good. It has lifted people out of poverty, enabled people to do things they would otherwise not be able to do and it has driven a host of start up business.
To think that M-PESA was regarded a safer place than a bank to keep money is remarkable. It may have been down to ethnic disputes but still.