Weekly Review November 24-30: What Makes Kenya Unique

This week in the blogosphere, we found several stories that evidence exactly what makes Kenya so unique.

“Connected tech communities and competitive advantage: the Kenyan way” by Erik Hersman on White African
Erik Hersman, one of the leaders in the Nairobi technology community, writes on the differences among the major technology hubs in Africa: Kenya, South Africa and Nigeria. Each region is unique in its own way: Nigeria has the most people while South Africa has the best infrastructure. Kenya, on the other hand, has a tightly interconnected community providing it with the competitive advantage. According to Hersman, Kenyans innovate with Kenyans in mind, increasing the likelihood for entrepreneurial success. Be sure to check out the comments section for more firsthand insight on the differences in tech communities.

“What is Keeping Kenya from Being ‘Cash Lite’?“ by Daryl Collins, Julie Zollman, and Peter Fleming on CGAP
Despite the uptake of mobile money in Kenya, cash still dominates the market for daily transactions.  CGAP conducted exit interviews with customers at retailers in Kenya, finding that 95% were M-Pesa users, but most only used it weekly. Customers cite the transaction cost as the biggest barrier while merchants are concerned about reliability.  Clearly there is room from improvement in mobile money even in Kenya. CGAP claims that “the ”entry points, motivations and pathways to clear these blockages [to a cash-light economy] are there, waiting for the right entrepreneurial mind to take them into the next frontier.”

“Safaricom Launches Mobile Saving and Borrowing for Unbanked” by Kirsty Styles on Mobile Marketing Magazine
This week, Safaricom announced its partnership with Commercial Bank of Africa and released M-Shwari, a new saving and borrowing mobile app. This application is designed with the 12 million unbanked Kenyans in mind. Customers can borrow amounts as small as Ksh 100 (~US$1.16) or save as little as Ksh 1 (~1 US cent) with a 5% annual interest rate. Savings builds credit within the system, as do a number of other factors such as M-Pesa history. Have you tried M-Shwari and had any success?

“A Quick Comparison of Available Payday Loans” by Nick Walubengo on Pesatalk
Unlike in the US, the notion of payday lending in Kenya does not come with the overwhelmingly negative connotation. Most payday lenders in Kenya are available through mobile applications and perceived as innovative. In fact, Safaricom’s new M-Shwari falls under the payday-lending umbrella. Walubengo provides an overview of the leading available short-term mobile loan options in Kenya.  He points out, and we agree, that borrowers need to be aware of the terms of any loan they accept.

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