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Michuki: Probe cash transfer
Mr Michuki (left) and Prof Ndung’u yesterday. Photo/JOSEPH MATHENGE
In Summary
- Banks raise concern that crooks can use M-Pesa system to launder money
The Government on Tuesday ordered an audit of Safaricom’s M-Pesa money transfer system just a day after the mobile phone service firm signed a deal with Western Union for international cash transactions.
The instructions to the Central Bank came from Finance minister John Michuki as he launched new regulations at the School of Monetary Studies in Nairobi for micro-finance institutions.
“I don’t know whether M-Pesa will end up well. I want guidance from Central Bank over the concerns of M-Pesa money transfer system.
“They should study the scheme and pronounce policy to safeguard depositors,” Mr Michuki said.
Satisfy regulator
However, speaking to Nation by telephone from London, Safaricom chief executive officer Michael Joseph said he welcomed the move saying it would reinforce the confidence in the service.
“We welcome the audit by the Central Bank of Kenya since it will verify the concerns and satisfy the regulator that we have put safeguards and the risks are minimal,” Mr Joseph said.
He said the money is deposited in a trust account and no employee of the company has access to it.
M-Pesa money transfer system, launched in March 2007, has become popular with the unbanked population serving as deposit account for some, causing jitters in the banking industry.
There are over four million M-Pesa registered accounts and over Sh20 billion has been transferred through the system since it was launched.
“Some of the banks are saying we are in competition, but I don’t think M-Pesa is a threat to banking industry.
“What we are doing is that we filling a gap that the banks have left out,” Mr Joseph had told the Daily Nation’s Smart Company in an earlier interview.
Central Bank of Kenya governor Njuguna Ndung’u has also in the past rooted for the M-Pesa mobile money transfer service.
He has described it as a “step towards making financial service accessible to all Kenyans who have access to a mobile phone.”
On Tuesday, Prof Ndung’u said the Government will establish a national payment and settlement system that would provide mobile money transfer systems with a platform on which to operate.
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Some of the Major banks in Kenya are indirectly owned by politicians (through share holding by secondary comapnies) and others the have vested interest in them. M-pesa is viable idea acessing the banking facilities to the ordinary Kenyans. This people should leave politics out of this and spend time on more pressing issues, like corruption and the unsolved goldenberg saga. The Central bank governor can spend his time better trying to crack that one. or is that politically incorrect, he will be stepping on toes! not a good idea.
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now at least we know who stands with the big banks ,which are for the rich. imagine trying to open an account in one of those banks ,you just feel as if they are doing you a very big privilage.m-pesa is for the poor ...michuki should be praising it..LIPA USHURU KWANZA ..by the way when are you retiring from politics...tuambie tu! si kwa ubaya,
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M-Pesa ia an innovation that has brought relieve to Kenyans with or without bank accounts. like Equity Bank it has brought the once boisterous banks down to earth. But I welcome an audit. The figures will then do the talking. If the Gov had ordered an audit of he pyramid schemes, Kenyans would not have lost their money.
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