FiA_2015

Southern and Eastern Africa
MOBILE
FINANCIAL
SERVICES
COLLABORATIONS
The growth of MFSs in Africa has
predominately been led by MNOs; however,
many governments have defined them
as ‘financial products’ thereby requiring
financial oversight. This has led to a dual
regulatory system between Central Banks
and Telecommunications departments.
This, together with the intense competition,
has forced firms to enter into partnerships
to provide more innovative products and
services. Below is a review of some of the
major collaborations occurring across
the continent beginning firstly within the
Southern and Eastern regions, and then in
Northern and Western Africa.
Dominant payments player faces challenge
M-Pesa is the most high-profile and successful
FinTech firm in Africa. It is owned by Safaricom, a firm
which Vodafone owns a 40 percent stake. Since its
launch M-Pesa has entrenched itself in the financial
services system through banking collaborations
thereby further expanding its offerings. Its latest
collaborations with Kenya Commercial Bank and
Commercial Bank of Africa separately, have resulted
in M-Shwari and M-Pawa both loan services. Each
product has been of huge commercial success.
M-Shwari has over 10 million customers in Kenya, while
M-Pawa has 1.8 million customers in Tanzania.
That success has attracted a new competitor in the
biggest bank in Eastern Africa by deposits – Kenya’s
Equity Bank. It has a network of 200 branches across
Kenya, Uganda, Rwanda, Tanzania, and South Sudan.
Having previously launched a service with Safaricom
which failed, it has now sought to gain full control
of the process by diversifying and becoming a
mobile virtual network operator (MVNO) through its
subsidiary, Equitel.
The firm has leased over 60 percent of another MNO’s
(Airtel) network infrastructure. It plans to roll out its
MVNO to Uganda, Tanzania and Rwanda through this
deal with Airtel. Its latest service facilitates mobile
banking through the use of a film-like label which
is stuck onto the customer’s existing SIM card. The
service attracted 1 million subscribers during its
initial 1 . It has had a cumulative monthly growth rate in
SIM uptake of 93 percent in its first year 2 .
Equitel’s Profile:
Mobile Virtual Network Operator
Orange Money has
loaned 60 % of Airtel’s
network infrastructure
telecommunications.
2.2% OF THE MARKET
Equitel has so far gained a market share of 2.2
percent at the expense of Orange Money and Airtel,
the local arm of India’s Bharti Airtel. Safaricom has
mounted a strong campaign to limit Equitel’s growth,
and in August 2015, increased transfer tariffs for
third-party users 3 . It has also argued that Equitel’s
thin SIM technology presents security risks; however,
these claims have since been dismissed by courts.
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