Digital Financial Services (DFS) and Financial Inclusion: Kenya’s perspective By Francis Wangusi, MBS Director General 3rd -5th December, 2014 ITU - Geneva.

Digital Financial Services (DFS) and Financial Inclusion: Kenya’s

perspectiveBy

Francis Wangusi, MBSDirector General

3rd -5th December, 2014 ITU - Geneva Switzerland

Kenya the Home of 1st Mobile Money Service

http://www.google.com/imgres?imgurl=http://thumb7.shutterstock.com/display_pic_with_logo/60395/60395,1317543327,1/stock-photo--kenya-map-text-with-flag-illustration-85832353.jpg&imgrefurl=http://www.shutterstock.com/similar-13836283/stock-vector-kenya-text-with-map-on-kenyan-flag-illustration.html&h=230&w=450&tbnid=IvNFVsLwf6vb_M:&zoom=1&docid=_jvm8yv9kZSjoM&itg=1&ei=osN6VP-mK9DhaoargqAM&tbm=isch&ved=0CHMQMyhIMEg&iact=rc&uact=3&dur=1840&page=5&start=67&ndsp=18

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://jabalifurniture.com/item.php?id=131&ei=6sh6VJfqDYfpaOT-gJAC&bvm=bv.80642063,d.d2s&psig=AFQjCNF6UhMHHKVFJq0SneZjmZE_EDIvQw&ust=1417418891889856

Kenya’s 1st Mobile Money Service – Since 2007

http://www.google.com/imgres?imgurl=http://d2qce1f1y0zwhh.cloudfront.net/media/images/stories/mpesa_7.jpg&imgrefurl=http://www.biztechafrica.com/article/safaricom-marks-7-years-m-pesa/7826/&h=270&w=410&tbnid=JeG2AHSoFOnyoM:&zoom=1&docid=DsMBEj9HT3Z-4M&ei=Jup6VPShHofsaKClgqgK&tbm=isch&ved=0CCIQMygaMBo4ZA&iact=rc&uact=3&dur=1069&page=5&start=119&ndsp=31

Stakeholders in DFS

RegulatorsCA/CBK

MNOs

GoK

Digital Financial Services (DFS)

Why DFS and Financial Inclusion

Benefit June 2010 June 2014Financial Inclusion (Population Accessing Mobile Money Services)

36% i.e approx. 13 million

64% i.e 27 million

Employment Creation (Mobile Money Agents)

31,900 120,800

Money Transacted on Mobile Money Platform

USD 653M USD 23B

Kenya’s Overall Economic growth outlook (GDP)

Low income Economy

Middle income Economy. >31% of GDP channeled through Mobile money

Kenya’s Position in DFS and Financial Inclusion in the Region

Description PositionSize of Mobile Market Nigeria

S. AfricaKenya

Position in Mobile Money Market Kenya S. Africa Tanzania

Best providers for 2nd Generation Financial Services e.g micro-finance products

KenyaS. AfricaZambia

DFS Platforms for Financial Inclusion

Accessible Bank Saving & Lending Service

Easy & Fast Mobile Saving & Loaning Services

Flexible e-Banking on Mobile Platform

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.gsma.com/mobilefordevelopment/programmes/mobile-money-for-the-unbanked/mmu-examples/m-kesho&ei=Ocd6VIvLDsrharvQgeAH&bvm=bv.80642063,d.d2s&psig=AFQjCNF6UhMHHKVFJq0SneZjmZE_EDIvQw&ust=1417418891889856

http://www.google.com/imgres?imgurl=http://tuvuti.com/wp-content/uploads/2013/12/M-Benki.png&imgrefurl=http://tuvuti.com/2013/12/how-to-open-and-use-kcbs-m-benki-account-from-your-mobile-phone.html&h=300&w=300&tbnid=zESteWIXLu0sxM:&zoom=1&docid=j2d5Y2_QvcElFM&ei=yt56VMXsOIndaKyIgtAM&tbm=isch&ved=0CF4QMyhWMFY4rAI&iact=rc&uact=3&dur=3978&page=12&start=380&ndsp=16

http://www.google.com/imgres?imgurl=http://kenyabwala.com/wp-content/uploads/2014/01/topBanner.png&imgrefurl=http://kenyabwala.com/shock-safaricom-cba-blacklist-m-shwari-loan-defaulters/&h=376&w=1024&tbnid=2VJrdGHtaAu6wM:&zoom=1&docid=wX_c1UzKWAAIYM&ei=Xt56VLDtLsG7aa7-gaAH&tbm=isch&ved=0CDkQMygVMBU&iact=rc&uact=3&dur=1208&page=1&start=0&ndsp=26

DFS Value Add Services

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://eunemaerrands.com/index.php/eunema-errands-clientele/9-uncategorised.html&ei=JMh6VOXoCpPraLGXgMAM&bvm=bv.80642063,d.d2s&psig=AFQjCNF6UhMHHKVFJq0SneZjmZE_EDIvQw&ust=1417418891889856

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=https://etelej.com/blog/about-mpesa&ei=hch6VIX8FY7gaJ6ogegK&bvm=bv.80642063,d.d2s&psig=AFQjCNF6UhMHHKVFJq0SneZjmZE_EDIvQw&ust=1417418891889856

http://www.google.com/imgres?imgurl=http://trak.in/wp-content/uploads/2014/09/M-Pesa-Bharat-BPO.jpg&imgrefurl=http://trak.in/tags/business/2014/09/29/book-railway-tickets-vodafone-m-pesa/&h=250&w=492&tbnid=EkEKK5X3AXGN7M:&zoom=1&docid=oliSoyqE2grBdM&ei=o-N6VMPOIM_taon_gIAO&tbm=isch&ved=0CEIQMyg6MDo4yAE&iact=rc&uact=3&dur=1316&page=8&start=224&ndsp=35

http://www.google.com/imgres?imgurl=http://whiteafrican.com/wp-content/uploads/2011/11/Hersman-AfricaCom2011.034.png&imgrefurl=http://whiteafrican.com/category/web-stuff/page/3/&h=768&w=1024&tbnid=RAs5hg13jaD8WM:&zoom=1&docid=Howiayycb-R-nM&ei=o-V6VPzXOo7VapG1gugH&tbm=isch&ved=0CB4QMygWMBY4yAE&iact=rc&uact=3&dur=1292&page=7&start=192&ndsp=34

http://www.google.com/imgres?imgurl=http://www.humanipo.com/wp-content/uploads/2013/08/mkodi.jpg&imgrefurl=http://www.humanipo.com/news/30253/safaricom-stole-my-idea-claims-manyattarent-founder/&h=297&w=448&tbnid=TFxwOQTcf5JGKM:&zoom=1&docid=xecPEU0cD0-JpM&ei=Jup6VPShHofsaKClgqgK&tbm=isch&ved=0CFwQMyhUMFQ4ZA&iact=rc&uact=3&dur=3188&page=7&start=183&ndsp=31

http://www.google.com/imgres?imgurl=https://www.imbank.com/wp-content/uploads/2012/06/mpesa-card-image.jpg&imgrefurl=http://www.kenyanlist.com/kls-listing-show?id=133196&h=761&w=1133&tbnid=CqgyEtXyJ-vLoM:&zoom=1&docid=AATQAMIRZ-V08M&ei=kup6VNztD4L1ap-3guAO&tbm=isch&ved=0CGkQMyhhMGE4yAE&iact=rc&uact=3&dur=882&page=10&start=277&ndsp=32

DFS for Ease of Doing Business & Employment creation

• Over 30 Millions transaction per day• Over 120,000 Agents creating employment

DFS for e-Commerce

The highest no. of transactions take place within the mobile money markets, selling of goods and services, including cattle trade

Regulators Place in Digital Financial Services

• Licensing Services• Promoting competition • Ensuring level playing field• Mitigating Risks through regulatory interventions• Addressing cyber-security concerns• Enforce compliance to the rules of engagement• Consumer Protection

Challenges

Managing Competition

Unprecedented cases e.g Thin SIM for Mobile Money

Cyber Security Threats & Fraud

Dynamic Innovations requiring Dynamic Regulations

http://www.google.com/imgres?imgurl=http://cloudfront-assets.reason.com/assets/db/1360957761304.jpg&imgrefurl=http://reason.com/24-7/2013/02/15/broad-definition-of-cyber-threat-adopted&h=321&w=428&tbnid=ETKDqcoTVKgNIM:&zoom=1&docid=ZaIWnFHWeEhboM&ei=1u56VM2gIZHgaLXDgtAD&tbm=isch&ved=0CD0QMygZMBk&iact=rc&uact=3&dur=2324&page=2&start=25&ndsp=34

http://www.google.com/imgres?imgurl=http://cdn.audiencemedia.com/var/cio/storage/images/media/images/sim/547518-1-eng-GB/sim_article_full.png&imgrefurl=http://www.cio.co.ke/news/main-stories/airtel-wins-case-against-safaricom-to-open-up-m-pesa&h=300&w=620&tbnid=-N4Q-5tFNxFFcM:&zoom=1&docid=IjnN_cMfkK29dM&ei=Jup6VPShHofsaKClgqgK&tbm=isch&ved=0CBEQMygJMAk4ZA&iact=rc&uact=3&dur=1225&page=4&start=86&ndsp=33

•Digital Financial Services is accelerating our Achieve of Vision 2030 aspiration of Financial Inclusion by all Kenyans by the year 2030

CONCLUSION

Way-forward: Success of DFS & Financial Inclusion

Collaboration among Stakeholders

Enhancement of Security

Financial Literacy

Programmes

Enabling Environment

Innovations DFS

Thank You

Digital Financial Services (DFS) and Financial Inclusion: Kenya’s perspective By Francis Wangusi, MBS Director General 3rd -5th December, 2014 ITU - Geneva.

Documents

services slide

mobile money slide

mobile money services

mobile money service

mobile platform slide

employment slide

conclusion slide

mobile money marketkenya