PesaBit #001: 7 Reasons why East Africa is a Mobile payments and FinTech HotBed

Image credit: abmagazine

Image credit: abmagazine

Kenya and broader East Africa will lead digital finance and digital currency innovation in Africa. Going forward, I expect financial services and Technology (FinTech) in Sub Saharan Africa activity in Kenya to tap into mobile phones and mobile devices as a form factor.



7 reasons why I tip mobile payments and mobile financial services

  • An expansive agency network money including the remotest of areas for Cashing in and Cashing Out (CICO) of electronic money. The scraping off of agent exclusivity agreements lowers entry barriers for new entrants in money transmitter & mobile financial services. Data from the Central Bank of Kenya shows there were 115,015 agents for mobile payments as of February 2014
  • Trust – A familiarity with the mobile phone as a communication tool, value storage and exchange.
  • Increasingly expanding cellular networks. Telecom operators are quick on the trigger and react fast to customer needs. Competition in the Telecoms sector is yielding innovation and value for consumers.
  • Precedent legislation. Every new case in court sets precedence and redefines the boundaries of competition. An example is the Overlay SIM Technology -MVNO case in Kenya between Equity Bank and Mobile.
  • There is an increase in commercial activity and consumer markets that will require – fast payments, financial services, cross border payments and online commerce
  • Regulators are increasingly supporting cashless initiatives. There is an obvious need for data on informal economies and cashless transactions are one way to aid this.
  • Trends across East Africa and SSA are influencing the whole region. Supportive regulation in Zimbabwe sets an example for Kenya. Regulators in Zimbabwe scrapped off agent exclusivity deals in before Kenya followed suit.



  1. Not too hard to make that argument! But I do think that TZ will have an advantage compared to Kenya. That is because the market is more even, with several MM products competing, which are now even starting to be interoperable. That competition leads to faster development seems obvious in the share of mobile transaction of GDP, where TZ has just overtaken Kenya.

    • @Jason *Cheeky smile. Pesabit is a series for expressing my thoughts on trends — like a regular report card on where mFinservices and payments stand presently. Basically, I have carte blanche.

      I am interested in the trends in Tanzania. Please feel free to share your thoughts on FinTech trends here when you can.

      Interoperability is a huge positive leap and Kenya lags behind. However, the non-interoperability of mobile money schemes in Kenya has driven competition and spurred innovation.Competition isn’t a bad thing in that sense. Still, interoperability is necessary long term — just as non-exclusivity of agents.

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