Kenya clamps down on Cash

From my Twitter timeline, I can tell there is a lot written about the ongoing war on cash; an international war on physical paper and coins. Today, it was much closer to home.

Central Bank’s new tough rules to monitor large cash transactions was an article from the Standard Digital dated January 28, 2016 [Read more…]

Why Bitcoin Matters

Bitcoin article

Bitcoin, a little know currency that emerged in 2009, has achieved what was previously thought impossible, a digital cash. It went up from a market cap of under $1 million to today’s $6 billion. It also got Central banks excited by the concept of issuing virtual currencies, and a real shot  at eradicating cash. Never has the role of Bitcoin been more clear. In a world of state issued digital monies, a censorship resistance digital bearer asset is the only check against bad government. [Read more…]

The Curse of the Dollar, Why bitcoin matters for Africa

Commodity prices have dictated Africa’s fortunes for decades. Over the last 8 months, however, falling commodity prices have exposed the weakness of this model. I have always said, the peoples of Africa are best placed to benefit from an apolitical global currency like Bitcoin. [Read more…]

10 differences between Mpesa and Bitcoin

Bitcoin vs Mpesa featured image

Centralized – Decentralized

Mpesa is a centralized electronic money system owned by Vodafone. All transactions are settled on a centralized ledger on a central server.

Bitcoin is a decentralized electronic value transfer network owned by no one. All transactions occur on decentralized ledger on a distributed network.

Pegged to local fiat on 1:1 ratio – Free floating market price

KES 200 cash for MPesa KES 200 on a feature phone

Digital currency Mpesa is issued money, fully (100%) backed by liquid reserves on a 1:1 ratio. For every Mpesa unit in mobile wallets, there is matching fiat held in trust. The value is fixed.

Bitcoin is NOT backed by anything and derives its price from a free floating market exchange. Its value changes with market sentiments.

[Read more…]

Why isn’t Africa adopting Bitcoins massively for money-transfers?

Bitcoin adoption in Africa, not what you expect

Answer by Michael Kimani:

There’s a lot of variables in play before bitcoin can be used for money transfer on a significant scale. I’ll outline a few.

[Read more…]

PesaBit #002: Remittances In Kenya, Ripe Market Segments for Banks, MNOs & SACCos

Remittances into Kenya 8 year growth Pesa bit #002

Heated competition in East Africa for large scale customer acquisition has opened up the playing field to multiple players offering financial services, banking, mobile banking and a whole host of innovative financial products and services. In what is characteristically East African, the lines between Banks, SACCOs and MNOs are becoming blurrier. Equity bank and 3 other financial institutions are ready to get into the mobile money space through precedent MVNO regulation. Safaricom and CBA bank now jointly offer a micro lending mobile platform that set precedent as well. Competition is driving innovation.

The next frontier of heavy competition and outmaneuvering is in market segmentation. For this PesaBit edition, I particularly favour remittances as a lucrative market segment for financial services firms to desperately seek to entrench themselves in for new revenue streams. A diverse set of revenue streams is a logical step in the competitive East African banking & payments scene. Competition has led to thin margins albeit new market segments remain untapped. Remittances is a unique revenue source for example, in the wake of the financial crisis of 2008, while FDI inflows into Sub Saharan Africa significantly dropped, remittances exhibited resilience even displaying growth year on year. The market size is $ 1.29 billion in Kenya and $ 1 billion in Uganda. The figures are convincing and the above chart from the Central Bank of Kenya shows strong year on year growth from as far back as 2005. [Read more…]

Bitcoin Takes On Remittances Incumbents in Kenya: BitPesa vs. MTOs


Image: Cointelegraph

Image: Cointelegraph

The World Bank expects cross border remittances by international migrants to developing countries to total $436 billion this year. Growth is expected to boost this to $516 billion in 2016.  Remittances play a big role in the beneficiary countries: in both monetary and human development terms (health, education, social). Its impact on economic growth and poverty reduction is extensively documented.pdf. Sub Saharan Africa, where inbound remittances totaled $32 billion (2% of GDP), is no different. Nigeria ($21 billion) & Egypt ($17 billion) top the recipient list in Africa. Remittances in SSA are far more stable than FDI and private financing inflows. Remittances to Kenya totaled $1.2 billion.

“The increased financial weight of remittances in external flows to Africa and the positive role that remittances can play in Africa’s development have brought about heightened attention to the topic among policymakers.”Mthuli Ncube et al

[Read more…]