To see a vision of tomorrow’s Africa and the possibilities therein, look to Kenya. Micro finance service M-Pesa has exploded across the country creating a new generation of African entrepreneurs in its wake. The success of this one simple mobile phone based innovation has surprised everyone and could propel Nairobi to become the continent’s very own Silicon Valley.
Take-up of the mobile money solution M-Pesa—the “M” stands for Mobile and “Pesa” is Swahili for money—has been staggering. In six short years the micro-financing service now accounts for nearly 30% of Kenya’s GDP. Yes. 30% of the country’s GDP now passes through the M-Pesa platform. The service launched by mobile operator Safaricom allows account holders with a national ID card or passport to deposit, transfer and withdraw money through SMS on simple mobile phone devices. Kenya now boasts 65,000 M-Pesa agents and a quarter of a million outlets allowing users to deposit and send money all over the country.
This innovation sparked by M-Pesa continues to sustain a fledgling start-up culture in Kenya. Local entrepreneurs, some returning from abroad (always a good sign) are now leap-frogging the infrastructure challenges that traditionally restricted commerce across the country. The capital Nairobi boasts several innovation hubs which wouldn’t be out of place in London, Berlin or San Francisco. Kenya’s budding entrepreneurs use them and are offered desk-space, internet access, mentoring and coaching and access to finance if the idea sparks investor interest. Listening to the BBC’s World of Business show-cases how much M-Pesa continues to spark innovation across the country as M-Pesa solutions connect payment systems for local stores, enables fairer trade for farmers seeking to get the best price for their crops; connects skilled labour to employment opportunities and matches micro finance to good ideas. The possibilities continue to grow and ideas keep on flowing.
Google chairman Eric Schmidt recently visited some of these innovation hubs on a visit to Nairobi and noted how the combination of relatively stable politics, the British legal system and a benign climate are attracting a significant share of foreign investment. Watch this space. Kenya could well triumph as the tech destination of choice for Africa.