Last month I wrote an article on why ApplePay Isn’t the Be-All and End-All. In essence the articled discussed one of my favourite topics, namely, how mobile payments service providers can provide a compelling value proposition to their consumers and merchants, simultaneously creating incremental value.
In the article, I briefly touched on M-Pesa, the most successful mobile payment scheme on earth. M-Pesa has intrigued me for a while. It stands tall as an innovative example of mobile phone based money transfer and micro financing service that allows users to deposit, withdraw, and transfer money easily with a mobile device.
I’ve favorably referenced M-Pesa countless times in workshops, lectures, articles and conversation. And now I’m here. I’m in Kenya, M-Pesa’s birthplace – the ‘Sillicon Savannah’, where it is easier to pay for a taxi in Nairobi with your phone than it is in New York City – or even Silicon Valley for that matter.
Originally, M-Pesa was designed to allow microfinance-loan repayments to be made by phone, reducing the costs and risks associated with handling cash and thus making possible lower interest rates. However, after pilot testing, it was broadened to become the general money-transfer scheme that it is today. M-Pesa’s role is access. It is no more or less than a for-profit transactional and store of value platform. I love this about M-Pesa, but Africa needs more. Africa needs to prioritize people over profits.
Nowhere is this need more evident than on the small Kenyan fishing islands in Lake Victoria. In this deeply poor region the artisanal fishermen use sex as currency, not money. Their catch has been a deadly one. It has contributed to the region’s Aids crisis, leaving the area with the highest prevalence of HIV in the East African Community.
The women living here feel that they are forced to pay for the fish with sex because they have no other means. Here, the men man the boats, and when they come in with their catch, the women compete to buy it. The women offer sex to the fishermen for a better chance of getting fish. Without sex, there is no guarantee that these women will get any fish. Competition is fierce. After the fish procurement, the women must take it to market while it is still fresh. Competition for space on the roof of the bus can also be just as intense as getting hold of the fish in the first place. Sometimes the women have to have sex with the driver, just to ensure the fish actually gets to market. And then there is the market, meaning that some of the women are having relationships with all constituents of the system: fisherman, bus driver and market vendor. Clearly, intervention is required.
The women traditionally kept their money at home. Theft was a constant concern, and for many, traditional banks were either too far away, or demanded minimum deposits the villagers could not afford.
Mobile money and mobile banking platforms effectively address these challenges but not the underlying problem. Mobile money is a fast-growing industry across many parts of the developing and developed world. But can it really transform the lives of those living on just a few dollars a day?
Last night I discussed this issue over dinner in Nairobi with Brian Branch, President and CEO of the World Council of Credit Unions (WOCCU) and Daniel Burns, 2nd Vicechair of WOCCU’s board of directors. Together they explained how Credit Unions are approaching these types of systemic problems.
Firstly, they pointed out that Credit Union’s aim to improve the economic and social well being of all members. While they are profit-driven and profit maximizing financial institutions, their primary goal is human development and humanity expressed through people working together to achieve a better life for themselves and their community.
Contrary to all other financial banking institutions, credit unions distribute their surplus funds to their members. They encourage savings and provide loans and other services. They seek to bring about human and social development. Their vision of social justice extends both to the individual members and to the larger community in which they work and reside. Their decisions are taken with full regard for the interest of the broader community within which the credit union and its members reside.
So when Mr. Branch and Mr. Burns told me what they were planning to do in partnership with USAID and the newly launched eKenya Savings and Credit Cooperative (SACCO) for the island communities of fisher folk in HomaBay, I got really excited. Not only do they plan to establish a SACCO for the community, but they will also provide agricultural business development services to increase the economic capacity of vulnerable households through providing access to agricultural loans or grants and training in labor-saving and conservation technologies.
This is a real-life example of a financial institution prioritizing people, as Mr. Branch explains it, “people over profits”. This message really resonates with me.
This is one of the best examples that I know about which will use financial institutions to empower women economically, socially and will be the key to ending the dangerous fish for sex trade.
Lets take a word of advice from Mr. Branch and Mr. Burns and start thinking…
“People over Profits”.