180px-m-pesa_logoLives of thousands and thousands of poor people in the rural areas of Kenya are being transformed because of M-PESA, a service that allows users to transfer money using a mobile phone. M-PESA (M for Mobile and PESA for money in Swahili), operated by Safaricom, Kenya’s leading mobile operator,  is tailored for mobile customers who do not have a bank account, typically because they do not have access to a bank (in rural areas) or because they do not have sufficient income to justify a bank account (those who are living on less than one dollar).

Anyone who has a Safaricom mobile number can register at an authorised M-PESA Agent. Once registered, customers can put money into their account by depositing cash at a local agent; send money to other mobile phone users by SMS instruction, even if they are not Safaricom subscribers; withdraw cash at local agent; and buy Safaricom airtime for themselves or other subscribers.

M-PESA is a phenomenon. It has grown very quickly, hitting 6.5 million subscribers by May 2009 with 2 million daily transactions.Banks, which, like elsewhere, are characterized by lots of hidden charges, became concerned with the rise of MPESA such that in December of 2008, they reportedly lobbied the Kenyan finance minister to audit M-PESA, in an effort to kill MPESA. This ploy failed, as the audit found that the service was robust. As of now, MPESA continues to grow and is signing up new customers at an enormous rate. Their charges seem to be reasonable. MPESA now intends to launch an international money transfer  service through their network. They are targeting African diaspora remittances. Driven by success in Kenya, Vodacom, which, like Safaricom, is an affiliate of Vodafone, launched MPESA in Tanzania in April 2008.

In an effort not be outdone by its rival, Zain Kenya, launched its Zap mobile money transfer services. A Kenyan blogger, ICT Moses Kemibaro, who seems to have been following these developments for sometime, reports that

Zap’s charges are only Kes. 10.00 for ALL money transfers up to a limit of Kes. 35,000.00 whereas Safaricom transaction fees range from Kes. 30.00 to Kes. 400.00 depending on the amount of money being transferred.  Zain expects to expand the use of Zap to the payment of goods and services that is currently used to only a very limited extent via Safaricom’s M-Pesa.

Zain has also launched its Zap service in Tanzania and Uganda. It is being reported that it is planning to bring  Zap to all of its 22 operations across Middle East and Africa. But it has not announced when it plans to extend the service to its other subsidiaries.

I made some effort to find out from friends in Malawi the prospects of Zain launching their Zap service in Malawi in the near future. From the unofficial reports that I am getting, Zain is facing regulatory hurdles from the Central Bank. This is, however,  not strange because Zain faced the same problems in Kenya.

In order to ensure that Malawi is not left behind in this revolution, the authorities at the Central Bank in Malawi have to borrow a leaf from their counterparts in Kenya, Tanzania and Uganda as soon as possible. If Kenyans, Tanzanians and Ugandans can do it, we can also do it.

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