How Africa’s Airtime Currency Traders Birthed A Fintech Innovation Playbook

This is a story of how informal airtime currency resellers of Africa birthed mPesa, mobile money, and an innovation playbook for Africa’s emerging economy.

Not everyone can see it.

If you are keen though, you’ll realize Africa’s informal economy is an open playbook on how to innovate, build and scale successful products and services for the emerging African consumers. Ask me how I know, and I’ll point you to the little known story of prepaid airtime currency re-sellers in Africa who, by cobbling up a rudimentary hack, were able to model a country-wide money transfer network, that would later be adopted by Africa’s telecommunication companies (Telco), spun off into a massive revenue generating business to eventually dethrone the monopoly of banks in East Africa.

But the real story is neither about airtime, nor Telcos. What it is really about are the lessons we can draw upon Africa’s informal economy on how to approach innovation in Africa.

This is a story of how the prepaid airtime re-sellers of Africa not only birthed mPesa, and mobile money, but an innovation playbook for Africa’s emerging economy.

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How Kenya’s Digital Financial Inclusion Industry Is Failing Women Entrepreneurs

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.

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Why Kenya’s Cryptocurrency Agents of 2017 remind me of airtime p2p networks of 2006

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.

Let me explain.

Continue reading “Why Kenya’s Cryptocurrency Agents of 2017 remind me of airtime p2p networks of 2006”