StanChart chief in Nigeria, Manjang gives insights on success of Kenyan M-Pesa
The Chief Executive Officer, Standard Chartered Bank Nigeria (StanChart Nigeria) and West Africa, Mr Lamin Manjang, has given fresh insights on the origin and growth of Africa’s most successful mobile money banking innovation, the Kenyan M-Pesa.
Speaking in an interview in Lagos, he said “M-Pesa obviously started as one of the most successful mobile money solutions that were pioneered in Kenya. It did not start off that way. I am a former Chief Finance Officer at Safaricom in Kenya.”
“So we talked about how Safaricom came up with M-Pesa; initially, it was actually more for the ability to give out microloans and ability to collect repayment. If you give out microloans of say $100, obviously you have to be able to have the system to collect payments from that loan.
“If it’s $5, you cannot have a very cumbersome, very expensive process for collection, so that was how the system of coming up with a mobile solution where somebody then can pay that microloan using a mobile app came from. And from that, the opportunities for people to make payment just started expanding.
According to Manjang, “The good thing about the M-Pesa was that at that time, the regulator was very supportive, so the Central Bank of Kenya (CBK) saw that it was an innovative development and that ‘though it is in the telecom space, let us allow it to flourish and see how it goes’. So, I think that ability to create space for innovation to flourish is really what distinguishes Kenya from many markets.
“Others have tried it, but their regulations could be too tight and, therefore, the opportunity for the product to gain ground would be lost. So, for now, if you go to Kenya, M-Pesa is a way of life; everything from paying your maid to your driver, shopping, paying for a visa is done through the M-Pesa platform.
“That has also helped in financial inclusion, so Kenya has a financial inclusion rate of about 75 per cent, which is one of the highest across the continent. I know Nigeria is also very keen to increase the financial inclusion matrix, and of course, the Central Bank (of Nigeria) has indicated that it is very supportive of measures to get telco to start in that space, banks to look at agencies banking model to be able to reach out. I think we can learn some lessons on what other markets have done and see how we can improve statistics inclusion in Nigeria.
On the best model between telco-driven and bank-powered, StanChart boss, who is also a Kenyan averred that whereas the debate will continue to rage depending on country’s monetary policy focus, “In Kenya, it was telco-driven though banks will like it to be bank-driven.”
“By the way, I was quite impressed with the NIBSS (Nigeria Inter-Bank Settlement System) that we have in Nigeria. In fact, the banks in Kenya decided to come up with similar platforms like NIBSS to allow real-time money transfer from one bank account to another. I think the banks in Nigeria have clearly taken the lead as opposed to Kenya where Safaricom took the lead. At the end of the day, what we want is for the customers to get the best value for money. It will be bank-led obviously for me.
In his further submission, he advised African monetary policy chiefs that “If you don’t play in the space, then you give a chance for somebody else to come and play in that space. So this is our space; payment and money are our strengths.”
