MPESA: Harnessing the Potential of Mobile Money Transfer Platforms to Enhance Agricultural Valuechains

Transcription

1 MPESA: Harnessing the Potential of Mobile Money Transfer Platforms to Enhance Agricultural Valuechains in Kenya Presented by: Juma Odongo Naburi Ministry of Agriculture, Livestock & Fisheries, Nairobi, KENYA

2 KEY ISSUES This paper reviews the: 1. Current functionalities of MPESA platform 2. Opportunities in the agriculture sector that can be adapted to improve efficiency. 3. Recommendations on how mobile money transfer platforms (digital finance) can further enhance efficiency of agriculture value chains

3 BACKGROUND Rapid developments in the field of Information Communication Technology and the resultant explosive growth of the information services sector have radically changed the world s economic and social landscape This ICT-led growth is creating jobs, raising productivity, increasing incomes, opening new opportunities Leading the trail in the ICT-led growth has been the mobile phone Professor Jeffery Sachs (Director, Earth Institute, University of Columbia) described it as the single most transformative tool for development

4 cont d BACKGROUND Ban Ki-moon (UN-SG) - In today s world telecommunications are more than just a basic service they are a means to promote development, improve society and save lives Mobile phones is the most ubiquitous telecommunication technology in developing countries Mobile phones subscriptions million (2000) to 4 billion (2010) Number of mobile phone users (*projected) Year *2015 *2016 *2017 No. of Users (billions)

5 cont d BACKGROUND Reasons for rapid growth of mobile: Few barriers to access (unlike other technologies) Simple Inexpensive Convenient to use Expansion of networks to rural areas

6 KEY POLICY AND INSTITUTIONAL FRAMEWORKS Vision 2030 Roots for Universal access to ICTs MTP ( ) Strategies for what is described as Strengthening the foundation for a knowledge economy ICT policy (2006) ICT Authority State corporation that is on the frontline for development of a knowledge economy ICTs master plan Plan on how the potential of ICTs can be fully harnessed Communications Authority of Kenya (CAK) Regulator of ICT industry ASDS (Agriculture sector development strategy) - To develop, install and manage an integrated information system that informs programme planning and management

7 SELECTED AGRIC-BASED ELECTRONIC INFORMATION PLATFORMS IN KENYA PLATFORM NAME 1. NAFIS National Farmer Information Service 2. ASPIS Agricultural Science Providers Information Science 3. KEPHIS Kenya Plant Inspectorate Services 4. Biovision Infonet Biovision 5. KSC Kenya Seed Company 6. KACE Kenya Agric Commodity Exchange 7. AMITSA Marketing Information System for Agro-inputs MAIN CONTENT -General Agriculture production -General Agriculture production -Seed varieties & suitable areas -Crops, animals & environment -Seed varieties & suitable area -Market information -Market information

8 SELECTED AGRIC-BASED ELECTRONIC INFORMATION PLATFORMS IN KENYA PLATFORM NAME MAIN CONTENT 8. M-Farm 9. PCPB Pesticides Control & Produce Board 10. i-cow -Software solutions & agribusiness -Pesticides information & licenced agrodealers -Dairy production & artificial insemination providers

9 MOBILE MONEY TRANSFER PLATFORMS IN KENYA 1. Safaricom (MPESA) 78% of customers in Kenya 2. Airtel Kenya (Airtel money) 3. Orange Kenya (Orange money) 4. Essar Telecom (YuCash) 5. Tangaza Ltd (Mobilepay) 6. Mobikash Afrika (Mobikash) - 22%

10 MPESA MOBILE MONEY TRANSFER PLATFORM M-PESA - M-mobile, PESA-Kiswahili word for money Started in 2007 by Safaricom Telecommunications company MPESA functionalities: It allows users to - Deposit, withdraw, transfer money and Pay for goods and services MPESA current services: Bulk payment Buying airtime Deposit/withdraw cash to your account Send money to another customer (local & international) Pay school or college fees Pay bills Manage your MPESA account Loan application/disbursement Interest earning account

11 cont d MPESA MOBILE MONEY TRANSFER PLATFORM Launching of selected dedicated service specific functionalities Safaricom mobile GSM services MPESA money transfer -Paybill number system -Integration with banking systems - Lipa MPESA system na - M-Shwari services (interest earning account) (loan application & disbursement)

12 cont d MPESA MOBILE MONEY TRANSFER PLATFORM Facts about MPESA - One can send as low as Ksh 10 ($0.1)and withdraw as little as Ksh 50 ($0.5) - There are over 79,000 agents/outlets - Transaction per year ($ 90 million) on MPESA platform is just about ¼ of Kenya s GDP - Has expanded to Tanzania, South Africa, Afghanistan, India, Romania - Requirement by Central Bank of Kenya - The funds are deposited in several commercial banks - Funds to be held by Trust (therefore funds are out of reach by Safaricom, just in case Safaricom goes bankrupt, and the creditors would not have access to the MPESA funds. - MPESA has a 3-factor authentication SIM-card, ID card, PIN - Nowadays, people say can you MPESA me, to mean can you send me money

13 STATEMENT OF THE PROBLEM Faced with the challenge of feeding over 9.2 billion people by 2050, the world has to develop new and innovative ways of increasing food production. A lot of time is spent on accomplishing activities along the agriculture value chain. Much of these can be shortened by use of mobile platforms/applications Demand side (eg. Farmers) They are not utilizing many other available functionalities of MPESA Supply side (Mobile service providers) Some applications/functionalities that can enhance efficiency of actors are either lacking or are not adequate for effective use

14 OPPORTUNITIES THAT CAN DELIVER BROAD SOCIO- ECONOMIC BENEFITS THROUGH MPESA Services offered directly on MPESA platform functionalities 1. Mobile payments for farm produce, inputs, group members, service providers, bills, dividends, school fees, wages/salaries, fares 2. Micro-lending: M-Shwari, a collaborative product of Commercial Bank of Africa and MPESA. (interest earning account, loan disbursement, loan repayment) 3. Micro-insurance premium & claims payments (eg. Kilimo Salama Plus, a product of UAP and MPESA)

15 OPPORTUNITIES THAT CAN DELIVER BROAD SOCIO- ECONOMIC BENEFITS THROUGH MPESA Services not offered directly by MPESA platform functionalities 1. Agricultural trading & bartering platform 2. Shares/stocks trading 3. Functionalities for payment of specific key services/goods from certain actors (eg. Agro-meteorological information, insurance) 4. Sending/payments to accounts of other mobile money service providers outside Kenya

16 KEY FACTORS IN THE APPLICATION OF MPESA 1. Need for adequate and comprehensive supportive policies governing the mobile money services 2. Security of the mobile money platforms from intrusions will build customers trust to continue using the services 3. Access channels features should cater for everyone irrespective of mobile type (internet enabled or not) 4. Maximum transaction limit per day be reviewed upwards to encourage expanded use (currently it is maximum of $1,400) 5. Number and distribution of MPESA agents should be adequate for the population being served 6. MPESA should have wide functionalities/features

17 CONCLUSION AND RECOMMENDATIONS Since mobile phone penetration is high and growing (74% in Kenya), the agriculture value chain actors including governments should continue to encourage/increase usage of mobile money services that target specific aspects in the value chain with a view to improve there effectiveness and efficiency Mobile money service providers should continue to develop new business models and applications that cater for all agriculture value chain actors The mobile money platforms, because of there level of security authentication and little human interface, they certainly improve good governance wherever applied

18 PICTORIAL Customers at an MPESA agent s shop

19 AHSANTE SANA GOD BLESS YOU ALL