EXCLUSIVE: Why M-Pesa Is Africa’s Largest Fintech Platform
M-Pesa, a mobile money transfer service provider, has officially established itself as Africa’s leading fintech platform after reaching 50 million monthly active customers. Not only are these numbers huge but they represent something of value in a cultural sense too.
M-Pesa is a two sided network that provides a wide variety of financial services to both businesses and individual customers. Customers can send and receive money, make and receive business payments, pay bills, make and receive international money transfers, save and access credit, all from the convenience of their mobile phones and wherever they may be in the countries served
Whilst 50 million monthly active users is already an incredible feat, M-Pesa were able to double the number of active users it had in the past 5 years, becoming available today in Kenya, Tanzania, Mozambique, the Democratic Republic of Congo, Lesotho, Ghana and Egypt. This reflects both the ever-increasing popularity of the service, as well as the success of Safaricom and Vodacom’s joint venture to accelerate M-Pesa Africa’s growth of the service across the continent.
In fact, M-Pesa became an even more important platform for customers during the pandemic with transaction volumes increasing 44% year-on-year in the first quarter of the current financial year. The number of transactions grew to 4.5 billion in the quarter – with a total transaction value of €63 billion. Nick Read, CEO of Vodafone Group, said: ‘M-Pesa has helped millions of people to access financial services for the first time and millions more to improve their lives, start businesses and gain control of their finances.’ This venture was hugely successful; having a bank account in Africa was something that not many people actually had, yet there was no doubt that there was great access and availability to mobile phones. With Vodafone basically attaching a banking account to the phones, many people had unprecedented access to their finances like never before.
This has been a prevalent cultural trend; as disaster struck with COVID, it became clear to many people that having financial security, mobility and literacy were more important than ever. After all, in a period where countries reached record high redundancy rates in their labour markets, having that access and mobility is vital. When M-Pesa was launched 14 years ago, for many customers it was their first, and often only, access to financial services. This was such a revolutionary experience, resulting in lifting roughly 2% of Kenyan households out of extreme poverty from 2006-2019; it is with no doubt then that the sole, trusted provider furthered its relevance during the pandemic. It’s now just not a service, but a transformative experience for the lives of its customers.
So what does the future look like for M-Pesa? Well there has been heavy investment into newer technologies and partnerships as M-Pesa tries to further its range of services into wealth management and insurance. With the launch of the M-Pesa Super App in June 2021, it seems clear the service providers are also focusing on businesses, expanding its ecosystem to help deliver innovative solutions across micro businesses, SMEs and large corporations. Collectively, more than 500,000 businesses transact more than US$7 billion (€5.8 billion) every month on M-Pesa, so it seems extremely exciting to observe just how far the space can truly go.