Switch on your mobile phone and make cash

• Safaricom is partnering with Equity Bank to put bank accounts in the hands of mobile phone users.
• Kenya becomes first country in the world to introduce financial transactions system that does not involve a card.

A silent revolution is taking shape in the mobile phone and banking sectors — and the biggest beneficiaries are likely to be low income earners and rural area residents.

The first sign of change came when Equity Bank launched its mobile phone banking system known as Eazzy 24/7 in English or Benki Yako Mkononi in Kiswahili.

This was a major breakthrough for the bank, although the system is already being tested in Asia by Grameen Solutions. For those who may have forgotten, Grameen won a Nobel Peace Prize some time back because it gave credit to the poorest of the poor in Asia — including beggars.

On August 3, Felix Salmon reported in his blog, Portfolio.com, that a leading mobile phone company in Asia, Obopay, had announced an alliance with Grameen Solutions. “In ten years time, the companies said, they would like to see one billion of the world’s poor… receive banking services via their mobile phones”.

One month later, Equity announced that it would provide banking services for both Safaricom and Zain subscribers. With that one stroke, the bank staked a claim to the more than 11 million mobile phone users in the country.

Of these, only about 4.5 million have bank accounts, which means, another six million people have the chance to sign up and get access to banking services, including credit. The bank has vindicated a research conducted by two World Bank scholars, Lynn Bennett and Carlos Cuevas.

According to the two, the large number of people who have been ignored by banks because they are poor or because they live in remote areas represent “a large and potentially profitable market for institutions that can develop ways to reduce the cost and risk of serving them”.

From anecdotal evidence, Equity Bank is not just good at giving credit to anyone who needs it, including students who want to try their luck at the Nairobi Stock Exchange; it is also very efficient at ensuring that the borrowers do not default.

Informal sector

One of the challenges that have been facing businessmen and workers in the informal sector and farmers in rural areas is the unpredictability of their income. For instance, when a maize farmer sells her produce in December, she has to wait until some time in June before she can make some more money from the sale of beans, potatoes and peas. In between, her income is not assured. But with a bank in her hand, she can save some money in the high season to spend in the low season. By virtue of her savings, she will have attained some degree of economic security.

With this, the World Bank scholars say, she and other people in the Jua Kali or small scale farming sectors will have access to credit that can help them out of poverty “by improving the productivity of their enterprises or creating new sources of livelihood”.

The second revolution witnessed in the last week was the decision by Safaricom and PesaPoint to enter into a partnership that will allow Safaricom subscribers to withdraw money from PesaPoint ATMs. The most significant impact of this partnership is that it allows customers to withdraw their money without having to use an ATM card. With that, Kenya became the first country in the world to introduce a system of financial transactions that does not involve a card.

The potential for this service to revolutionise the money transfer business is enormous, considering that already, Safaricom is partnering with Equity to put bank accounts in the hands of mobile phone users.

The revolution

The third phase of the revolution came on Thursday when Zain, formerly known as Celtel, announced that it would spend Sh3 billion to expand its network services in rural areas over the next three months.

At the moment, Zain has about two million customers as it controls 20 per cent of the mobile phone market. But this could increase since the firm has lowered its calling rates significantly.

It must not be forgotten that 80 per cent of Kenyans live in rural areas and this market is up for grabs as more of them are buying mobile phones.

Even the Government has not been left behind in this revolution. According to Mr Gideon Ndambuki, the assistant minister for Agriculture, farmers can get advice from both Safaricom and Zain on what crops can do best in their regions as part of a campaign to improve productivity. All one has to do is write the name of the crop one wants to plant then # and the name of their home division before sending the SMS to 2964.

All these developments mean one thing: That people living in rural areas and who have average to below-average incomes are likely to see a significant change in the way they communicate, transfer money and do business over the next few years. What is more, the charges for these services are affordable and are likely to drop further over time due to competition.

However, for the great majority to enjoy these new benefits, they would be well advised to stop using their mobile phones to only send love messages and threaten their enemies. They should wake up to the new reality that they can use their phones to improve their jobs and makes lots of money.

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Game politicians play best

Isn’t it a pity that moving goalposts is not one of the games that countries can take part in at the Olympics? If it were, Kenyan politicians would no doubt clinch the gold medal in this very important event. Consider this.

Last year, politicians allied to PNU supported an elderly candidate for the presidency. At the time, they said age was nothing but a number. What mattered was a person’s experience and ability to lead. On the other hand, those allied to ODM said Kenya needed a youthful leadership that would bring change and send the old guard to retirement.

Changed positions

Eight months down the line, the two groups have changed positions. Now, one MP allied to PNU has drafted a Bill that seeks to set an age limit for future presidents. According to the MP, Mr Mithika Linturi, anyone seeking the highest office in the land should not be over 65 years of age. In his view, one of the problems facing Kenya is that politics is used as a “dumping ground for retirees” who have run out of ideas.

The MP has attracted the ire of ODM leaders, including Agriculture minister William Ruto and MP Ayiecho Olweny. Both say that setting an age limit for future presidents would amount to discrimination against the elderly.

In America, this kind of discrimination is called ageism. But it can also be a double edged sword as the ongoing presidential campaigns there have demonstrated.

On the one had, the Democratic candidate, Senator Barack Obama, 47, is criticised for being “young and inexperienced”. On the other, the Republican candidate, 72-year-old John McCain, is causing jitters because he is the oldest non-incumbent to vie for the presidency.

To balance these accusations, Mr Obama picked Mr Joe Biden, 65, as his running mate because he has many years of experience in Washington. Not to be outdone, Mr McCain picked governor Sarah Palin, who is much younger than Obama, to energise his campaign.

The moral of the story? Both the old and the young need each other and always will.

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Kudos to our track queen

Ladies and Gentlemen, please join me in sending my congratulations to the new queen of the tracks: Pamela Jelimo, who won the Sh70 million golden league jackpot on Friday night.

Her consistent victories are proof that with persistence and singular dedication, it is possible for an ordinary woman from any corner of the country to become a winner on the world stage, their life circumstances notwithstanding.

And trust Kenyan men to seize a money-making opportunity when they see one.

Now, reports indicate that Pamela’s family is being bombarded with marriage offers after she won the bars of gold that have left many a mouth watering at the prospect of marrying a rich bride.

Well done, Jelimo! And thank you for putting your country Kenya, and your village, Kaptamok, on the world map of top achievers. But please say ‘no’ to the gold-diggers.

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Do African leaders ever fall sick?

One would have assumed that the age when no African president fell ill is long gone. So it is a little surprising to hear that the government of Nigeria is keeping the health condition of its president, Umaru Yar’Adua, as a secret, yet he has been in a Jeddah hospital for over two weeks now.

When he left his country, Mr Yar’Adua had been expected to be away for three days as part of his pilgrimage, but his prolonged absence raised concerns when news filtered in that he was unwell and was undergoing treatment.

According to the BBC, Mr Yar’Adua has been suffering from a kidney condition for the past ten years. And in the last 18 months, he has been flown to Germany twice for emergency treatment.

One report said that news reached Nigeria that he had died, prompting the government to deny the rumour. This was not the first time that such rumours have circulated about the health of the president.

Even as we wish him a quick recovery, other African leaders should learn from this sad occurrence to ensure some measure of openness about their health. This way, their citizens will avoid speculation.

Power struggle

It is not enough for a president to say that his life is in the hands of God. Where possible, the government should give accurate information that will keep the public in the know and prevent unnecessary power struggle among ambitious politicians.

Get well soon, Mr Yar’Adua. Your country needs you.

mbuguajn@yahoo.com