[kictanet] Might M-Kesho sound the death knell for (some) M-Pesa Agents?

[Edwin Onchari]

I think this will be dictated by my estimate of 8 - 12M or so safaricom
subscribers. If the bulk of that lot is not using the Mpesa product
(frequently), then indeed  it's the end of the road for the agents.

 

Edwin

From: kictanet-bounces+eonchari=lynxbits.com at lists.kictanet.or.ke
[mailto:kictanet-bounces+eonchari=lynxbits.com at lists.kictanet.or.ke] On
Behalf Of Francis.Hook at gmail.com
Sent: Wednesday, September 08, 2010 3:32 PM
To: Edwin
Cc: KICTAnet ICT Policy Discussions
Subject: [kictanet] Might M-Kesho sound the death knell for (some) M-Pesa
Agents?

 

1 - Equity Bank has abt 4.5 million customers. 
2 - Lets wager that abt 70-80% are Safaricom subscribers...(3.15 - 3.6
million) and possibly 80% of those use M-Pesa (wild guess)
3 - A Study conducted in late 2009
(http://technology.cgap.org/2009/09/08/understanding-what-drives-profits-for
-agents-m-pesa/) examined the factors that make an M-Pesa agent make a
profit...as well as the challenges faced by such agents (which would most
times lead them to say "hakuna float"). 
4 - As M-Pesa agents have become more pervasive, their profit margins have
become thinner owing to competition (incl ATMs, super markets, etc). This is
part of the premise of M-Kesho - to allow such agents to make revenue from
additional services like insurance...
5 - M-Kesho essentially removes the need to have CASH transactions - either
sending or receiving. However, to the operator the transaction fee still
accrues, and to the bank, the deposits remain somewhat stable. If anything,
for corporate users of M-Pesa (KQ, KPLC, etc) they can know have their
accounts credited directly - no need to use an M-Pesa agent to load cash
onto phone and then pay KPLC, Kenya Airways, etc. 
6 - Thinking of the three or so million Equity Bank Customers who are M-Pesa
users....will they EVER need to use an M-Pesa agent? before the routine to
send cash was ...a) draw cash from ATM/Branch b)go to M-Pesa Agent c) send
money - and vice versa to receive (go to mpesa agent, get cash,
spend/deposit cash) - ergo M-Pesa agent has a role. Of course I admit, such
account holders can still withdraw from their accounts using M-Kesho and get
cash from an M-Pesa Agent (but I think this would be really really rare). 

Will M-Kesho see some rationalisation in the number and size(type) of
agents? Admittedly some of the more established agents can evolve into FOSAs
for Equity (and other banks), but I think at the grassroots there might be a
negative impact.

My two cents...

Francis 

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