Fifteen trillion.

Take a moment to wrap your head around this number. Say it out loud and feel the trill against your palate. Write it down and count the zeroes.

Sh15 trillion. That kind of money can finance Kenya’s 2017/18 budget five times over and still have some change left over to build Konza City.

With that kind of money, the government can build 483 Thika Roads. Don’t even try to think about how many holidays you could take to Malindi with all your friends, relatives, acquaintances and hangers-on.

Well, Sh15 trillion is the amount of money which — according to the Central Bank — moved through Kenyan phones between the inception of mobile money a decade ago and December 2016.


For much of this decade, Safaricom has controlled more than 80 per cent of this market, so it is safe to assume that the largest chunk of these trillions was transferred through M-Pesa.

And when this innovation came to Kenya without much fanfare, men like Mr Patrick Macharia and Mr Seth Lumumba were among the first to embrace it.

Mr Macharia signed up to become the first M-Pesa agent in March 2007. But he did so “shingo upande (reluctantly)” to use his own phrase.

Mr Lumumba, on the other hand, was the first Kenyan to transfer money using a mobile phone.

Said Mr Macharia: “I didn’t understand this thing. They came to talk to me about float and I was wondering what this had to do with the ocean.”

He laughed at the memory when the Nation team went to interview him this week in his Nairobi office on the 10th anniversary of his first M-Pesa transaction.


Today, with an agency network of 250 shops, Mr Macharia is a lot more than an ordinary M-Pesa convert and a little less than a mobile money fanatic.

But before his encounter with M-Pesa in 2007, Safaricom and its British shareholder, Vodafone, had already made a two-year journey to bring the product to the Kenyan — and later global — market.

Leading most of this journey was Nick Hughes, a man who gladly accepts the title of “Father of M-Pesa”.

Incidentally, though Kenya is the home of M-Pesa, it is not the birthplace of mobile money.

Before Nairobi, mobile money had been used in Cairo, Manila, Vienna and even in Lusaka. However, these trials were not very successful.

Approaching the Kenyan situation, Mr Hughes and his team figured that the key to breaking the mobile money jinx was to make a simple product and to go after the unbanked population.


According to one research, the idea of starting M-Pesa was funded by the UK’s Department for International Development (DfiD) and Vodafone.

DfiD gave £910,000 (Sh116m), which was matched in kind by Vodafone, bring the total to about £2 million (Sh255m).

The plan was simple — provide microfinance clients with a way to pay back their loans. However, Kenyans were not willing to play ball. Instead, they used the technology in unexpected ways.

“One man loaded money on his account in one town and withdrew it in another town. He didn’t want to carry cash on the bus. That for us was one of the sparks, the idea that this could be bigger,” says Mr Hughes about that man’s peculiar behaviour.

However, there were regulatory hurdles to clear before the product could come to the market.

Dr Bitange Ndemo was Information Permanent Secretary at the time and he recalls being warned by his colleagues in government to keep away from the product, which they were convinced was little more than a fraudulent scheme.

“I was told this was just another form of Anglo-Leasing, a scandal in the making,” said Dr Ndemo, who recently took a post on the board of Safaricom.

The hurdles were cleared from above. The then President Mwai Kibaki gave a one-word assent to the project — “sawa” and with that it was good to go. Sawa is the Kiswahili word for OK.


At the time, the product that became M-Pesa was going by the thoroughly uninspiring name — Mobile Microfinance.

For a moment there, it almost became M-Cash. Safaricom also toyed with the idea of calling it M-Pay or even Ving but eventually settled for M-Pesa.

M-Pesa grew swiftly. Mr Macharia recalls queues streaming from his first agency shop on Mfangano Street within a month.

At its first anniversary, M-Pesa had recorded Sh14.8 billion in transactions. At the end of its second year this had risen to Sh120.6 billion.

The growth trajectory has continued for the last 10 years. The product expanded beyond the initial person to person transfers to include what is today known as “pay bill” and “buy goods” purchase options. With time, banks linked up to M-Pesa.

Those inevitable facts of life — death and taxes — can also be handled via M-Pesa.

The benefits of mobile money transfer have accrued to the 194,000 households which, according to a recent scientific study, have been lifted out of poverty.

This effect also has a gender dimension because women got an avenue for transacting that was not closely tied to their husbands and fathers.

But M-Pesa is not having a very happy 10th birthday. Last year, the National Treasury warned that M-Pesa had become such an integral part of the economy that its collapse could pose a fiscal threat along with climate change and terrorism.

Along its growth journey, M-Pesa has often seen Safaricom at odds with its rivals as they argued that M-Pesa made the local market uncompetitive for mobile phone services providers.

After all, while Safaricom has rocketed to become the biggest company in East and Central Africa, India’s Essar has exited the market while those left standing in the battlefield, Telkom Kenya and Airtel, are bleeding dangerously.

Indeed, debate has been raging as to whether M-Pesa should be hived off from Safaricom to become an independent company.

READ: M-Pesa may be hived off from Safaricom

The latest proposal was fronted by a government-hired consultant and an Opposition Member of Parliament, Mr Jakoyo Midiwo, who is also the Minority Chief Whip in the National Assembly.


It is worth noting that Safaricom’s mobile money platform has the widest agency network in the country, readily visible in the ubiquity of the green colour of its agent’s outlets in both the urban and rural landscapes.

The convenience afforded by this infrastructure is one of the key reasons often cited for customer loyalty both to M-Pesa and to its parent company, Safaricom.

And later this month, Safaricom is expected to relaunch the service, which has, over the years, become one of its most robust revenue streams.

Were the two arms to split, Safaricom would be required to treat M-Pesa as it would any other mobile money provider, giving competitive advantage to other operators.

The government, perhaps keen to protect its 35 per cent stake in Safaricom, has been adamant that it will not go for this proposal with the Communication Authority’s Director-General, Mr Francis Wangusi, dismissing proposals for a Safaricom split as “weird”.


Whatever the case, all signs point to the fact that Kenya’s second decade of mobile money is set to be more complex than its first.

Banks that once felt threatened by M-Pesa have regrouped under PesaLink, a service that was given a helping hand by a recent move by the Competition Authority of Kenya (CAK), which forced Safaricom to lower the amount of money it charges financial institutions that want to use its network.

Safaricom is also trying to move beyond the traditional M-Pesa services.

The company is piloting a payment card that should be linked up to mobile money accounts.

This is yet another signal that the journey of innovation is far from over as new products are being grown from the original M-Pesa infrastructure.

One of such products is M-Kopa, a service that sells solar services via M-Pesa. Incidentally, M-Kopa is the new home of the father of M-Pesa, Mr Hughes.