Presentation on theme: "DEVELOPMENT OF DIGITAL FINANCIAL INCLUSION IN KENYA"— Presentation transcript:
1 DEVELOPMENT OF DIGITAL FINANCIAL INCLUSION IN KENYA FRANCIS WANGUSIDIRECTOR GENERAL/COMMUNICATIONS AUTHORITY OF KENYA
2 WHAT IS THE SUCCESS STORY? KEY STATISTICS ON MOBILE MONEY IN KENYA - MARCH 2014(SOURCE CENTRAL BANK OF KENYA)Active mobile money Customers12.5MRegistered mobile money accounts26.2MMobile money transactions per day30.0MAdult population using mobile money59%Mobile Money transactions in KES/month192.6BNMobile money agents120,000By 2006, only 185,000 of the adult Kenyans were formally banked, but by March 2014, 26.2M accounts had been registered on mobile money platforms, 59% of which were active with a total of 116,196 mobile money agents.
3 Financial Regulator/driver DRIVERS OF THE SUCCESS STORYMotivator with its blue print of making a middle income economy by 2030Deepened and broadened the penetration of ICT and Financial servicesDeepened and broadened Financial services through progressive financial regulationDeepened and broadened penetration of ICT services through progressive financial regulationICT regulator/driverFinancial Regulator/driver
4 KEY ACTORS IN MOBILE MONEY Policy & RegulatoryActorsMNOsMobile Money Platforms
5 DEVELOPMENT OF MOBILE FINANCIAL ECOSYSTEM IN KENYA EVOLUTION OF MOBILE MONEY SERVICESIN KENYADEVELOPMENT OF MOBILE FINANCIAL ECOSYSTEM IN KENYA2005Safaricom finalizes the development of the framework for M-pesa pilot as microfinance repayment toolCBK gives Safaricom an authorization to pilot the M-pesa frameworkThe M-pesa pilot commences in town called Thika in Kenya2006M-pesa pilot successful completeSafaricom seeks further authorization to convert from microfinance to mobile money transferThe Financial Regulator directs Safaricom to further information regarding M-pesa legal structure2007CBK gives an objection to the conversion M-pesa from microfinance to mobile money transfer platformsThe first mobile money transfer launched in Kenya2008M-pesa facilitates bill payment and bulk salary paymentsM-pesa customers begin getting M-pesa services at Post bank branchesIntroduction of cardless ATM withdrawals to M-pesa customers2009National treasury gives M-pesa a clean bill of healthGOK exempts all financial services including mobile money transfer from VATAmendment of the financial act 2009 allows the use of agent bankingGOK allows M-pesa customers to receive directly international remittances through M-pesa platformSome microfinance okeys customers to make payments through M-pesa (SMEP & MFL)Insurance companies begin to insure customers using M-pesa (Kilimo)Partnership between Kenya power and Safaricom to enable KPL customers pay bills through M-pesaAnother partnership with Grundfors enable rural households to pay for safe water through M-pesaCeltel Kenya LTD and ESSAR mobile Kenya LTD introduce competition to M-pesa through Launch of their mobile money platforms.
6 DIVERSITY IN DIGITAL FINANCIAL SERVICES Easy & Fast Mobile Saving& Loaning ServicesFlexible e-Banking onMobile PlatformAccessible Bank Saving& Lending ServiceThe mobile money eco-system now integrated under the National Payment System – Created more confidence and resilience through oversight.
7 FROM MOBILE MONEY TRANSFER TO DIGITAL INCLUSION Rapid transformation from P2P to P2B, P2C, B2B and vice versa
8 DFS HAS ACCELERATED E-COMMERCE GROWTH AND EMPLOYMENT CREATION Booming business in small markets being accelerated byMobile financial servicesThe highest no. of transactionstake place within the mobile money markets through selling of goods and services, including cattle trade as well as P2P money transfers
9 GOVERNMENT WHIPPED TO DIGITAL FINANCIAL PLATFORMS TO IMPROVE SERVICE DELIVERY Enhancing the way every Kenyan accesses Government servicesKonza the first smart city in Kenya being built for digital compliance including digital financial inclusion
10 CHALLENGES FACING DIGITAL FINANCE SERVICES IN KENYA ManagingCompetitionUnprecedentedcases e.g Thin SIM for Mobile MoneyDynamic Innovations requiring Dynamic RegulationsCyber Security Threats & Fraud
11 CONCLUSIONDigital financial inclusion is part of the enablers accelerating the country’s aspiration of being a middle income economy by 2030.Kenya’s experience underlines the importance of PPP and international cooperation as the way to go in order to fully exploit the potential of DFS and DFI.