Is there a moment or event that stands out in your mind as being symbolic (or a harbinger) of Kenya’s changing financial services landscape in the past 10-15 years? One moment that really stands out is when we were doing some research with FSD Kenya on the early concept for M-Shwari. Some young people said, “M-Pesa has always been there, we want to try something new”. I realized they had grown up with M-Pesa! Not just with M-Pesa existing, but with M-Pesa as a fundamental part of their financial lives.
How transformational or important have changes in the financial sector been to ordinary Kenyans? I have to believe that the giant increase in mobile money and banking services has utility and therefore, because of its ubiquity, it must lie somewhere between being important and transformational – for individuals, society and the economy. At the same time, the macro indicators and causal factors are not so clear, although this has certainly been a period of giant growth in the middle class and the economy more generally.
I feel it’s an opportunity that hasn’t reached it’s full potential – perhaps we haven’t even grasped its full potential yet.
What has been the single most important driver of financial inclusion in Kenya? M-Pesa, undoubtably, which I believe has also driven bank account adoption (it certainly pre-dated it). But what the drivers of M-Pesa adoption have been are myriad and often-commented-on without clear answers. They include regulation, literacy, Safaricom, the UK’s Foreign Commonwealth and Development Office (FCDO) , FSD Kenya, the growth of the middle class, the lack of other banking options, and new back-end technologies.
It still amazes me how hard it is to describe mobile money to someone who has never used it; and still puzzles me why it’s not more widely adopted worldwide.
What is the biggest challenge facing Kenya as it continues its journey of expanding financial services to the poor? Kenya faces both challenges and opportunities. I think M-Shwari was a super interesting step forward (and so did the public, apparently). And I admired how it was grounded––with FSD Kenya’s help––in research. The Kenya Financial Diaries showed us that there are still opportunities to make financial services work to support and harness social networks. They showed us that there are many, many opportunities to find ways to use finance to accelerate solutions for larger development problems including education, health, water and, possibly, the low productivity of agriculture and small business.
There are potentially little-regarded or even unknown areas that will truly unlock the power of finance. Before M-Pesa, who suspected that small-value payments were such an important part of the personal and economic lives of Kenyans?