M-PESA

Transforming the lives of Kenyans

B tt M iBetty MwangiChief Officer– New Products DivisionAFI Presentation14th-16th Septemberp

M-PESA: A world’s first

• Launched March 2007

• Targeted at the un-banked…

also serving banked customersalso serving banked customers

• Operated in Kenya by p y y

Safaricom, in partnership with

Vodafone

M-PESA: Reaching the un-banked

Kenya’s Mobile Market

35% HouseHold

Own Phone23% Banked

20%

45% No Access

77%

Unbanked

20%

• M-PESA was launched to target mobile subscribers who were unbanked.

• Only 23 % of Kenyans hold bank accounts but 80 % have access to mobile phones.

• A number of banks also now offering M-PESA Service to their customers

*Source – FinAccess national survey 2009

How did people send money within Kenya?

Source: FinAccess 2006

How do people send money now?

•M-PESA is the most popular f money transfer service

•M-PESA has made money transfer affordable safe and fast for the affordable, safe and fast for the users.

Source: FinAccess 2009

M PESA A t M-PESA: A success story

M PESA: Customer Growth

8,000,000

M-PESA: Customer Growth

6,000,000

7,000,000

3 000 000

4,000,000

5,000,000

1,000,000

2,000,000

3,000,000

0

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

With over 11,000 new registrations per day M-PESA has experienced exponential growth to attain over 7 million customers 31-July

M-PESA: Agent Network

12000

14000

8000

10000

12000

2000

4000

6000

0

2000

Jul-07

Sep-07

Nov-07

Jan-08

Mar-08

May-08

Jul-08

Sep-08

Nov-08

Jan-09

Mar-09

May-09

Jul-09

O 12 000 l id i h h bi i b Over 12,000 agent outlets countrywide with a heavy bias in urban areasAgents drive recruitment and service an ever growing subscriber base for cash-in/cash-out transactions

M-PESA: Agent network

Working With Agents

•Wide Distribution Network – M-PESA Agents Found Everywhereve yw e e

•Continuous Training of Agent Staffg g

•Regular Feedback from M-PESA Agentsg g

•Continuous Performance targets & assessment e.g. Float g gLevels

•Stringent penalties to Agents who do not comply with Safaricom AML/KYC policyp y

M-PESA: Person to Person Transfer

210.27 B KShs. ($1.9B) moved in P2P since launch.

P2P Txns Value Mvt Vs. Avg P2P Txn Value per Customer3500 25

2000

2500

3000

usto

mer

/KShs

15

20

vt (B

/KSh

s)

Avg P2P Txn (ksh)

1000

1500

2000

g tx

n va

lue

per c

u

10

P2P

Txn

Val

ue M

vP2P Value Mvt (KShs/B)

0

500

07 07 07 07 07 07 07 07 07 07 08 08 08 08 08 08 08 08 08 08 08 08 09 09 09 09 09 09 09

Avg

0

5

P

Mar

-07

Apr-0

7M

ay-0

7Ju

n-07

Jul-0

7Au

g-07

Sep-

07Oct-

07No

v-07

Dec-0

7Ja

n-08

Feb-

08M

ar-0

8Ap

r-08

May

-08

Jun-

08Ju

l-08

Aug-

08Se

p-08

Oct-08

Nov-0

8De

c-08

Jan-

09Fe

b-09

Mar

-09

Apr-0

9M

ay-0

9Ju

n-09

Jul-0

9

M-PESA: Current Features

Cash In Cash Out

Person 2 Person Transfer

Airtime Top-Up

Bill PaymentBill Payment

ATM Withdrawals

Social / Salary Payments

M-PESA: Continued Innovation through Partnerships

• ATM withdrawal• ATM withdrawal

• Pay Bill (over 65 companies)

• Business to Customer (over 20

companies)

• Commercial banks and other

Financial InstitutionsFinancial Institutions

• Major utilities

• CSR Collections

How M-PESA Works

Moving M-PESA in the System

1. Wanjiru buys 2,000 at Nairobi Agent2 W ji d it t M th2. Wanjiru sends it to Mother3. Mother cashes 2,000 at Meru Agent

M-PESA E-MONEY ACCOUNTSNAIROBI AGENT WanjiruNAIROBI AGENT Wanjiru

100,000X X X X X

2,00098,000

MERU AGENT MOTHER

, ,,

X X X X X2,0002,000

M-PESA: Regulatory Environment

Prevailing Regulatory Environment

CBK provides an oversight of M-PESA

• Consulted from pilot stage to full commercial launch

• Continuous consultation on innovation

• Monthly statistics reporting• Monthly statistics reporting

In Support of Regulation

• Regulation creates a level playing field for operators or prospective market entrantsmarket entrants

• Regulation will provide legal certainty over the minimum g p g yrequirements for operators and provide an enforcement mechanism to ensure compliance

• Regulation will provide suitable consumer protection mechanisms e.g. providing a forum for complaint by consumers and in the long run providing a forum for complaint by consumers and in the long run enhancing service delivery to consumers

Preferred Approach to Policy Formulation(i). Legal framework created with the participation of stakeholders:

• To strengthen relationships between the regulator and industry players

• To provide incentives for investment in technologies that bring about innovation in financial services

• To introduces market perspectives and experiences, thus creating a sustainable and enabling regulatory environment

(ii). Adopt a Risk Based Approach to Regulation

• Create a balance between innovation while addressing legitimate regulatory• Create a balance between innovation while addressing legitimate regulatoryconcern

R l ti h ld f ilit t t f t t• Regulation should facilitate not frustrate

• A risk based approach to regulation will achieve the government’s public policy objectives and complement innovation

2007 / 2008 – Kenya Banking Awards – Special Award for P d t I ti

M-PESA: MMT FrontrunnerProduct Innovation

2008 - Global Mobile Awards – Winner, Best Broadcast Commercial (M-PESA ‘Send Money Home’ TVC)

2008 - Global Mobile Awards – Nominated, Best use of Mobile for Social and Economic Development

2008 - World Business and Development Award – 1 of 10 private companies recognized globally for theirprivate companies recognized globally for their contribution to the achievement of millennium goals through core business

2008 - Stockholm Challenge – Winner, Economic D l t tDevelopment category

2008 - Africom AwardsWinner, Best Solution for Rural ServicesWinner, Changing Lives Category (pilot with Concern g g g y (Worldwide)

2009 - Global Mobile Awards – Winner with Vodafone, Best Mobile Money Transfer service

2009 – UN-Habitat Business Award – Winner, Best Practices

2009- Mobile Contents Award- Winner – Best Mobile M S iMoney Service

M-PESA: Touching the Lives of Kenyans

Video: The Customers Voice

Thank youThank you