Peter Ndegwa’s dream to make M-Pesa Africa’s economic driver

Every second, 4,000 people receive or send money via M-Pesa, a mobile money transfer service by Safaricom unveiled 18 years ago.

The service has since spread wings to 170 countries globally, with 70 million people relying on it on a regular basis.

Besides, it supports 90 per cent of banking transactions in the country. In an exclusive interview with the Star on Friday, Safaricom Group CEO, Peter Ndegwa referred to the platform as the ‘heart beat’ of Kenya’s economy, bringing efficiency to daily life of people across social economic divides.

“M-Pesa is only 18 years old and it is already a $1 billion (Sh130 billion) business. Initially, it was set up to solve the problem of sending money but it has since evolved to fulfill the financial needs of an everyday person who uses a mobile phone,’’ Ndegwa said.

“As technology evolves and improves, we will continue to improve the services we are providing. As long as those services are helping our customers live comfortably in a digital world.”

He added that M-Pesa is empowering individuals to live their lives in whichever way they want. M-Pesa, Africa’s most successful mobile payment service has grown to become a key driver of financial inclusion with millions of customers in seven countries.

The firm’s half-year results for the first six months ended September last year show that the mobile money transfer platform contributed 42.9 per cent of Safaricom’s service revenue, totalling Sh77.2 billion, representing a 16.6 per cent increase over the previous six months.

Safaricom Kenya’s monthly active M-Pesa customers increased by 4.1 per cent to 33.4 million, Lipa Na M-Pesa merchants reached 658,669, and agents increased by 2.4 per cent to 266,071.

Transaction volume increased by 30.6 per cent to nearly 17 billion transactions during the six months, with Sh20.85 trillion traded, representing a 10.7 per cent increase.

The monthly average revenue per user increased by 13.1 per cent to $3.03 (Sh389.27), while chargeable transactions per customer per month increased from Sh29.87 to Sh37.37.

Safaricom reported the more than Sh562.5 billion in ‘affordable credit’ that was distributed to over 7.5 million customers and 52,000 merchants.

It has also enabled over 1.6 million customers to purchase their first smartphones with daily payments of as low as Sh20.

The service also supports over 55,000 integrations on its Daraja platform which hosts more than 100,000 developers.

With its current capacity of 4,000 transactions per second, the platform processes close to 100 million transactions a day, making it Africa’s largest fintech solution.

The success of this mobile money transfer and payment solution is based on its accessibility, and universal nature of the service, making it possible for millions to perform instant, secure and reliable financial transactions using their mobile phones.

Apart from Kenya, Safaricom which set its foot in Ethiopia in October 2022 took only seven months to set up M-Pesa in the market, moving millions to the digital financial ecosystem.

According to Ndegwa, the number of M-Pesa customers in Safaricom’s Ethiopian subsidiary has more than tripled from 3.1 million to 10.8 million.

The Group CEO said that the Ethiopian market has enormous potential for growth than Kenya, given the large size of the country’s population estimated at 120 million people.

“We have already invested $2 billion so far as a consortium of which about half of that is Safaricom. So that is a lot of investment. We need to make sure it works,’’ Ndegwa said.

Although the product has hit 18 years, Ndegwa ruled out any possibility of separating from the mother firm, saying that the two are joined at the hip.

“People should not even bother about how M-Pesa and Safaricom are organised. They should say, do I get the services that I need? And is it empowering me to live the life that I want? And is it allowing me to run my business in the right way? And to unleash the power of technology in a simple way,’’ Ndegwa said.

As the mobile money platform marks 18 years, its charitable trust, M-Pesa Foundation is celebrating 15 years of impacting communities through sustainable programmes in health, education, environmental conservation and integrated water.

Since its launch in 2010, Ndegwa revealed that the foundation has since invested Sh11 billion to empower 7.1 million lives directly and 35 million indirectly across Kenya.

The M-Pesa Foundation Academy and Scholarships Programme has supported over 1.3 million learners across the country.

Later in October, Safaricom will be celebrating 25 years of operation in Kenya.