Well articulated and thought provoking piece that lays the bare picture beyond over-romanticising Safaricom/M-Pesa’s past successes. For a corporate juggernaut sitting in pole position, the time for novelty is now.
Ngozi, this is timely and on point. I am using this as the basis for a sesh that I am running today and the conversations are killer. You may need to do a talk on this and more, brother.
My take is that MPesa is one of the greatest innovations in Africa. It will be hard to convince me otherwise.
The software being embedded into the SIM card is pure engineering genius and very hard to beat. The lines of code for SIM engineering is out of this world. They have distinct first mover advantage.
Secondly, the rollout was one of the best and well crafted rollouts I’ve ever seen. The government mandate along with reaching majority of the market through Safaricoms dominant position was superb. Stars don’t align so often in other countries. Nigerias Telecoms own 22% market share each unlike Safaricoms’ 75%.
The tool can be killed off, but it’s such a giant it doesn’t need to innovate. Just good software will not beat it. And big companies are more about building moats and entrenching than they are about innovating. What has Google or YouTube innovated on in the last 5 years?
Shareholder dividends is the only thing a company exist for in reality. And they are successfully doing it, very successful actually. I may not agree as an entrepreneur myself, but I know they will be here for the next 10-15 years for sure. Until smart phone penetration is deep in the village and non-embedded software can have a chance for widespread adoption.
Always insightful reading your thoughts. I thought M-Shwari had instituted a light version of risk based pricing in some form and/or rebates for earlier repayments. Also CBK has gradually been pushing for more risk-based pricing in the banking sector more broadly. The 80% dividend policy is a very interesting one combined with Govt of Kenya being a major shareholder + Safaricom itself being one of the largest tax payers. That will definitely lead to some interesting dynamics.
I'm with you on the interest rates not being based on risk assessed using their own data... That is bizarre. Perhaps there is a regulatory problem with charging different rates so they have to bucket uses into simple yes/no?
As for "innovation"... Why? I would say boring and profitable is good! For a user (consumer, merchant or developer).of a payment service stability is probably the top thing. And second horizontal growth. As a user you want a larger network. 50M is what... 5% of the addressable market? So focus on adding big new markets seems good to me. Sexy new features or vertical financial products on top are ... Meh.
On the topic of horizontal growth, my main criticism of M-PESA at this stage would be lack of interoperability or not being sufficiently carrier neutral. Sure in the early days it may have made sense strategically as just a feature to get more users on the Safaricom cellular network. But now it seems to me M-PESA is big enough now that they should allow users to transact across mobile carriers.
Well articulated and thought provoking piece that lays the bare picture beyond over-romanticising Safaricom/M-Pesa’s past successes. For a corporate juggernaut sitting in pole position, the time for novelty is now.
Thank you - it almost sounds like the story of Yahoo or Nokia looking at Google or blackberry as they evolve.
Ngozi, this is timely and on point. I am using this as the basis for a sesh that I am running today and the conversations are killer. You may need to do a talk on this and more, brother.
Finally, someone said it. M-Pesa is overrated.
A small note: the image is not Eliud Kipchoge. It looks more like Uganda's Joshua Cheptegei.
Well done Ngozi. Insightful and above all, authentic!
My take...remove Government from the cap table, and let it scale massively to compete with the biggest bank in Africa: MTN MoMo...
Thank you for sharing! Great read!
My take is that MPesa is one of the greatest innovations in Africa. It will be hard to convince me otherwise.
The software being embedded into the SIM card is pure engineering genius and very hard to beat. The lines of code for SIM engineering is out of this world. They have distinct first mover advantage.
Secondly, the rollout was one of the best and well crafted rollouts I’ve ever seen. The government mandate along with reaching majority of the market through Safaricoms dominant position was superb. Stars don’t align so often in other countries. Nigerias Telecoms own 22% market share each unlike Safaricoms’ 75%.
The tool can be killed off, but it’s such a giant it doesn’t need to innovate. Just good software will not beat it. And big companies are more about building moats and entrenching than they are about innovating. What has Google or YouTube innovated on in the last 5 years?
Shareholder dividends is the only thing a company exist for in reality. And they are successfully doing it, very successful actually. I may not agree as an entrepreneur myself, but I know they will be here for the next 10-15 years for sure. Until smart phone penetration is deep in the village and non-embedded software can have a chance for widespread adoption.
Always insightful reading your thoughts. I thought M-Shwari had instituted a light version of risk based pricing in some form and/or rebates for earlier repayments. Also CBK has gradually been pushing for more risk-based pricing in the banking sector more broadly. The 80% dividend policy is a very interesting one combined with Govt of Kenya being a major shareholder + Safaricom itself being one of the largest tax payers. That will definitely lead to some interesting dynamics.
I'm with you on the interest rates not being based on risk assessed using their own data... That is bizarre. Perhaps there is a regulatory problem with charging different rates so they have to bucket uses into simple yes/no?
As for "innovation"... Why? I would say boring and profitable is good! For a user (consumer, merchant or developer).of a payment service stability is probably the top thing. And second horizontal growth. As a user you want a larger network. 50M is what... 5% of the addressable market? So focus on adding big new markets seems good to me. Sexy new features or vertical financial products on top are ... Meh.
On the topic of horizontal growth, my main criticism of M-PESA at this stage would be lack of interoperability or not being sufficiently carrier neutral. Sure in the early days it may have made sense strategically as just a feature to get more users on the Safaricom cellular network. But now it seems to me M-PESA is big enough now that they should allow users to transact across mobile carriers.