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Masai Mara tribesmen who want to total up the profits they’ve made on their way home from market simply reach for their mobile phone and check their online account balance.

In East Africa mobile banking has leap-frogged conventional banking and its online reincarnation for everyone ― from the rich to the very poor ― at an astonishing pace.

More than 18 million customers now use mobile phones to do banking transactions in Kenya and Tanzania. The lightening speed of change has opened the door to a whole new generation of customers whose very first bank account is accessed purely through their phones. Most of the mobile devices used in these countries are still fairly basic and run on low cost pay-as-you-go contracts, which can be topped up for as little as 120 Kenyan shillings (the equivalent of about one euro or a couple of dollars).

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Since its launch in 2007 the M-Pesa service – the M stands for mobile and pesa means money in Swahili – launched by mobile network operator Safaricom has been phenomenally successful.

Once someone has joined the bank they can pay money in to the system by handing their cash to an agent — often the same person working at the corner shop who also sells credits for making calls. Withdrawals of money can be made by visiting another agent, who checks to make sure the account has sufficient funds before debiting it and handing over the cash. Users can also transfer money to others using a menu on their phones.

This means money is now zipping around the savannah — more quickly and a lot more safely than carrying bundles of cash in person. This is particularly useful in a country where many workers in cities send money back home to their families in rural villages.

 “M-Pesa is perfectly suited for the ‘un-banked’ and ‘under-banked’ across Africa and beyond,” said Philippe de Pontet, Africa Director, Eurasia Group. He believes “ M-Pesa is just the tip of the iceberg, with many other African-led telecommunication innovations on the way.”

As  broadband expands, so will the number of smartphones on the continent, he said.  “Over a quarter of Nigerian cell phone sales are now for smartphones which are increasingly usable in major cities like Lagos,” de Pontet said.

The reason Safaricom has been successful, where other companies have failed, analysts believe is down to developing a network for managing the 40,000 M-Pesa agents’ needs. The relationship it developed with several large Kenyan commercial banks also provided stability and oversight to maintain adequate security and mitigate money laundering fears.

Safaricom also has continued to innovate its financial service offerings, which now include the M-Shwari platform that allows for small-scale saving and borrowing via mobile phones. The latest spin-off launched in November in Tanzania, where drivers and motorcyclists are now able to use their pre-paid phones to buy fuel at petrol stations.

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