Tonny K Omwansa

Developmental uses of mobile phones in Kenya and Uganda

Abstract It is common cause that the advent of mobile telecommunications, particularly the mobile phone, has been immensely beneficial to developing countries. Not only has it facilitated and improved communication between individuals, but also it has enabled economies to grow faster. This paper explores an additional benefit that derives from having access to a mobile phone. It examines the developmental uses of mobile phones in two East African countries: Kenya and Uganda. It focuses on the relationship between the economic upgrading and the social upgrading or downgrading that result from the developmental uses of mobile phones. It is done by means of case studies. In Kenya, the paper looks at three developmental projects making use of the M-Pesa platform, as well as two hubs in Nairobi where original ideas are incubated. In Uganda, it explores two uses of MTN’s mobile money facility and two innovative rural agricultural projects. It finds that all the cases and projects result in economic and social upgrading, although there is also some social downgrading. The study also extends and broadens the conceptualization of economic and social upgrading as formulated by Capturing the Gains thus far. Finally, the paper shows how it differs from most other studies on the developmental uses of mobile phones in Sub-Saharan Africa – by focusing on social entrepreneurship, which, unlike private entrepreneurship, seeks primarily to create social value. With one exception, all the cases studied in this paper enhance the capacity of users of mobile phones to upgrade themselves economically and socially.

The Mobile Phone as the Tool to Redefine Savings for the Poor: Evidence from Kenya

Research conducted on the poor and their finances indicate that there is a need to develop financial instruments that specifically fit their needs. However, banks have not been able to provide such services, because the returns do not justify the cost of delivering them. The uptake of mobile phones and mobile money (in various guises) in recent years has been tremendous and widely documented. While the basic product is person-to-person money transfer, more sophisticated financial products designed for the poor are now coming on line. This article describes the experience of Kickstart in Kenya designing, piloting, deploying and sustaining a mobile phone savings application, leveraging the widely popular M-PESA money transfer service to target poor, small-scale farmers. KickStart, a non-profit organization headquartered in Kenya, designed a ‘Mobile Layaway’ service that enables farmers to make mobile payments of any amount and of any frequency to purchase human-powered irrigation pumps. The specific goal is to help farmers amass a lump sum for a major equipment purchase (foot-pedaled water pump). After the pilot, the flexible and targeted mobile-layaway program recorded over 95% success rate, with most farmers saving faster than they expected, giving a lot of hope that such saving tools can actually provide a safer, more secure, and more effective way to save for products and services. In addition, more women were able to buy water pumps than without the savings program. This article suggests that the success of Kickstarts Mobile Layaway provides a template for other similar products targeting the base of the pyramid, and draws lessons from the Kickstart pilot that may prove valuable for other mobile-money firms and financial service providers. The paper also presents two lessons learned in the design and implementation of the mobile money product; that iterative mobile money product design is critical for success and that simple solutions do overcome the issue of mistrust. It also makes some conclusions and recommendations for further research work.