In Kenya, going to a gas station doesn’t necessarily mean filling the tank. An increasing number of peasants and small-business workers, in fact, go to gas stations with their cell phone to fill up their wallets. No need of checking accounts, banks have moved to cell phone screens and communicate with their customers through text messages. Employers can choose to deliver paychecks through M-pesa, a banking cell phone service provided by Vodafone, in collaboration with the local company Safaricom.

 

Use instructions. To sign up for the service it is necessary to go to one of the 600 authorized service providers – shops, restaurants, gas stations – and fill personal data forms. The service provider gets the cash, applies a 5% commission and sends a text message to the recipient, who will be able to collect the money by simply showing a four-digit code on his/her cell phone screen. If a recipient doesn’t want to cash the salary all at once, he/she can choose to cash part of it and come again for the rest. While dealing with the salaries of their employees, Kenyan businessmen can receive payments from suppliers and fellow businessmen of the M-pesa net, thus avoiding driving here and there. This is proving extremely convenient, especially because only 19% of Kenyans have access to the traditional banking system, which is out of reach for those living in rural areas. For this reason, Safaricom has decided to extend the service to private transactions. However, in this case, people who want to send money via Safaricom needs to own a Safaricom cell phone. Once they get the 4-digit-code-text-message, recipients can cash the money anywhere in Kenya. The service works because 60% of Kenyans own a cell phone, a very high percentage compared to all other African countries. For the moment, 150 thousand people have signed up for the service, but the real number of those using the M-pesa net is not clear, since the recipients are not taken into account in the statistics. And the service started off only last March.

 

A pilot project. A spokesperson for Vodafone said: “It was an experiment, which has proved so successful that we will repeat it in Afghanistan.” In reality, it is something new also for Europe. As a matter of fact, in these days Postepay is launching a project that will introduce money transactions via cell phones also in Italy. In this case, however, the transactions will be limited to special cell phones. It seems that, in Kenya as well as in many other African countries, banking services such as transfers and paycheck deposits are possible only if one invests in new technologies.

 

Microcredit. Since microcredit institutions started using the Internet, the number of those signing up has grown over 8%. Ingrid Munro, the Swedish founder, in 1999, of the Jamii Bora Association, that helps those living in shantytowns to improve their conditions of life, had the idea. Initially, she landed money by hand, making people sign a contract, but this year she started using computers. Loans, now, can be obtained by filling a form using a computer terminal in one of the 200 stations around the country. First name, last name, reason for loan request. There are people like Susan Wangue, who has used the loan to open a clothing shop. Jamii Bora, which in Swahili means good family, provided the money to buy textiles and Ms. Wangue started working and gave up prostitution.  Others use the loan to pay the school fees for their children or to get a health insurance for the elderly. Ms. Munro said: “There are also many people who are HIV-positive and, thanks to us, can afford to buy medicines.” To access the terminals, connected to the main database in Nairobi, no magnetic cards nor codes that can easily be forgotten are needed, because identification takes place through finger prints. To get the cash, it is necessary to ask the Jamii Bora staff at the station, who are in charge of making the deposits. In this way, the central system in Nairobi manages to get an updated balance from all the stations within the microcredit net.  In the light of the positive results of the techno credit project, Ingrid Munro will try to open 700 more stations in the next two months. She will also offer new jobs: all the staff at Jamii Bora is from Kenya and most of them started out by requesting a loan.