NAIROBI, (CAJ News) – MUCH has been said and written about how person-to-person mobile money transactions are transforming Kenya’s economy, but the technology also has the potential to help entrepreneurs take their businesses to the next level.
This is according to Dr. Rutendo Hwindingwi, divisional director for Sage East and West Africa, who said the explosion in mobile money across Kenya is helping to drive entrepreneurship and efficiency for small businesses.
The single biggest benefit of mobile money, he adds, is that it allows smaller businesses – even informal, microbusinesses without banking accounts – to take advantage of the benefits of digital payments.
Hwindingwi noted that mobile money had changed Kenyans’ lives by making it quick and easy for people to pay each other.
Now, it promises to also make it simpler and safer to do business for entrepreneurs, and potentially even open up new markets for them.
Kenya, one of the world’s pioneers in the mobile money space, racks up Sh3 billion in mobile transactions each day, according to statistics from the Communications Authority of Kenya.
The country has Africa’s highest level of mobile money penetration at 58 percent.
Despite the impressive numbers, there is still plenty of room for mobile money in Kenya to grow.
According to one Nielsen study, 95 percent of Kenyans still pay with cash in a retail environment, 12 percent make use of mobile money, and just 2 percent use credit or debit cards.
Small and medium businesses, particularly those in the retail and transport environment, could benefit significantly by driving more transactions through mobile money, said Hwindingwi.
“In Kenya, cash still dominates transactions between many small and medium businesses and their customers. Many small businesses still like cash because they are reluctant to pay card transaction fees.
However, cash has many disadvantages, and we expect more and more entrepreneurs to start opting for digital, mobile payments.”
Hwindingwi noted that cash has a range of drawbacks for businesses: it is expensive to manage, exposes them to the danger of theft, and means that they need to keep a float to give customers change.
– CAJ News