Africa’s most popular mobile browser, Opera is about to radically change the payments landscape in Africa.
I think before this blog and thread, the global cryptocurrency community will not appreciate the strategic relevance of Bitmain’s $50 million investment round into one of Africa’s most popular Chinese owned mobile browser, Opera. What they will not see is the Fintech connection at play in East Africa, where the wildly successful mobile browser is creeping into digital financial services like mobile payments. For the payment professionals of East Africa, the pertinence of this investment on the future of their industry will not dawn on them perhaps until it is too late.
Last week’s SEC’s disclosure on Opera’s newest investor for their $115 million IPO, was the best strategic news on cryptocurrency ‘adoption’ in Africa I have seen in the last 5 years with far reaching implications on e-commerce, trade and payments for the region than appears at first glance.
My choice of a header image above accurately captures increasing Chinese influence on Kenya and Africa, at both state and commercial level.
People in Africa do not sleep and dream of having bank accounts. What they want is income to put in a bank account. Simply having a bank account gets you nowhere. Simply being cashless gets you nowhere.
This week I was honored be part of #WhatsNextFinclusion, a series put together by Metta on the state of the Fintech industry in Kenya and more importantly, the future. I was there on behalf of ChamaPesa – a ledger keeping app for social savings groups in Africa. Check out #ChamaPesa on twitter.
This year’s edition was sponsored by Mastercard and the moderator threw some pertinent questions at the panel. I, of course, have my own opinions from my own experience over the past 4 years – what i have observed as an analyst, user researcher, blogger and now co-founder of a startup in the space.
But, I thought it better to pose the same questions to some of the more experienced, brilliant minds from the continent that I have had the privilege to interact with, learn from and exchange ideas.
What follows is a response from Mwalimu Nyerere – my friend and mentor – on the state of the financial inclusion industry in Kenya and Africa in the raw. Nothing has been alter-rated so as to preserve the original thought and tone, only polished to give it flow.
Mshwari & Mpesa is only half the story. The rest of it is happening offline, in cash and trust networks
Don’t get me wrong, the efforts by the Kenyan financial inclusion industry have not gone unnoticed. Without naming specifics, the industry’s greatest feat by far is building a wide accessible network for formal financial services.
But access is only one item on a long list. It doesn’t matter how many bank accounts you give to the poor. Heck, even throw in a bitcoin cryptocurrency bank account – 2 mobile banks, 5 traditional bank accounts and 2 cryptocurrency bank accounts. Access means nothing when you can’t put money in people’s pockets. I speak for all when I say Kenyan people want to be empowered, they want more pesa in their pockets period. And that’s ok!
So when I criticize the industry, I mean well.
If you’ve been up and about in Kenya, you will appreciate how pesa will almost always positively correlate to some sort of biashara opportunity and even more likely one in the informal sector
My assertion is there is an overall failure by Kenya’s financial inclusion industry to look beyond the digital personas of the people of East Africa’s informal economy. Whereas, much of their lives unravel offline in cash, trust and biashara networks.
Bitcoin ATMs in Nairobi are only a great idea on paper. Electronic ATMs have lost to human agents in Kenya
I get it. Bitcoin ATMs are cool. You can walk up to a machine, insert cash and instantly get cryptocurrency. But Bitcoin ATMs in Nairobi are only a great idea on paper.
For cryptocurrencies to take off – for whatever use cases – people need a way to exchange their regular pesa in and out of the system. There is no way around this. It is the only way to bridge access and grow adoption. Calls for Bitcoin and cryptocurrency ATMs in Kenya and Africa typically stem from this access gap.
Unfortunately, this idea in Kenya and East Africa is dead on arrival.
The evolution of banking in nations, like Hong Kong, the US or the UK, took a vastly different form compared to East Africa’s much talked about mobile banking phenomenon. Any successful models for cryptocurrency adoption in East Africa have to be informed by local contexts. For starters, taking notes from existing digital money systems.
Agent networks – henceforth human ATMs – are the key to unlocking access.
Could Kenya’s cryptocurrency peer to peer networks become agents or exchange points in a future where digital currencies and crypto assets are commonplace ?
The lack of an official or formal bitcoin payment gateway has done little to dampen the adoption rate of cryptocurrencies in Kenya. Quite the opposite in fact. People have adapted to this service gap by forming peer-to-peer networks where anyone can buy or sell cryptocurrency. These informal networks, resemble the airtime currency informal networks of pre-2006, that powered remittance payment networks before Mpesa became a thing.