Africa as a source of tech- innovation, it seems unlikely, but the M-Pesa money transfer tool was rolled out in Kenya five years ago, a long time ago in technology terms, but now it is making waves further afield. The system makes total sense in a country with a large rural, unbanked population, as it allows users to make money transfers via mobile phone, as well as make deposits, pay bills and shop online. Now the system is being rolled out in countries with similar populations, such as Afghanistan, India and Egypt.
This new technology will allow countries to jump several stages of development. Banking has piggybacked the mobile phone revolution, allowing millions of people access to financial services, avoiding the need to build hundreds of banks, along with boosting savings, all of which should have a positive knock-on effect to the rest of the economy.
Regulation of banking services is relatively light in Kenya, but there are fears that mobile banking will not take off as spectacularly in India, as it will be held back by the country’s heavily regulated banking sector. Whatever the result of M-Pesa in India, the spread of mobile banking in the developing world looks set demonstrate that East Africa can be an innovation hub.