Where Africa and Technology Collide!

A Mobile Banking System for Africa

AfriPay Ben Botes talks about the need for what Grameen Bank has done for India in South Africa. I agree, except not just South Africa needs it – all of Africa does.

Those who I spoke to in Kenya this summer will remember me talking rather excitedly about the need and opportunity surrounding a mobile banking system that I called AfriPay. I didn’t really get into it in that post, but the opportunity goes beyond just providing a payment system, it also opens the door for an easy way to track and manage micro-loans.

How easy would it be to create a way for Africans to sign up for AfriPay and then allow them to also get access to a micro-loan? The numbers could start small enough that a default wouldn’t blow the system. Say you started by offering up $10 for people with no credit history, no land and no banking record. As they proved responsible with it, that amount could gradually increase so that at a later date they had access to greater and greater amounts of credit.

What is needed is a starting point. Everyone knows how hard it is to just get that first bit to get on your way – this would provide that opportunity to the “long-tail” of users. Marry that up with the AfriPay system and you’ve got a real winner on your hands.

A lot of Western investors are wary of investing in Africa. Who cares? Let’s have some African investors step up and do something here. As Muhammed Yunus has shown in India, a grassroots movement does not take inordinate amounts of capital to get going. It does need capital though, and it would behoove Africa to take it upon themselves to build this.


  1. Hello

    I totally love your blog. Very informational and full of substance. Cheers.

  2. Hi Erik

    You are very right here, of course its the whole of Africa that deserves this type of scheme. I actually find it astonishing that with all the grants and funding flowing into Africa, none that I know of is reaching our black woman entrepreneurs.

    I like your AfriPay concept it could be viable once the model is perfected and the stigma of investment and funding provided to Africa goes to the fat cats and not those who need it. A strong network is needed as the logistics may be daunting.

    More ideas and thoughts on this is needed. I’m not sure if we are seeing the whole picture yet.

    Great to see this topic spreading a bit.


  3. I agree with anonymous and Ben Botes: I love your blog and am so happy to see this topic spreading.

    I watched the Front Line episode on Kiva. I saw it via YouTube but it didn’t seem to turn up on my search. Matthew Flannery said in it that the next big thing will be Kiva where Africans will lend to Africans.

    So many things about Kiva’s model are so impressive. The ways they’ve figured out to use mobile phones for one. The idea of some “African investors stepping up to the plate” is so great because how they do it will surely be a surprise. Well, maybe not a surprise to you and Ben Botes!

    It’s so great to see how persistent you are about not letting good ideas go by without action. AfriPay is a great idea. Did you see this? http://www.worldchanging.com/archives//005493.html It’s about ATMs friendly to the poor. Also there was a post by Jan Chipchase http://www.janchipchase.com/blog/archives/2006/10/connecting_the.html About pooling and sente–somewhere I saw more in depth, but you’ll note this moth he’ll be making a presentation on the topic.

    My predictions is that cell phones will be a big part of the AfriPay model. It’s interesting how Grameen is negotiating this area with the Grameen Bank and Grameen Telecom.

    There’s not question that new models of doing business and banking are going to ruffle feathers, as Flannery at Kiva has discovered. But altogether Kiva’s success is so encouraging. And I was so inspired that in the Front Line piece Flannery pointed to the day when Africans will lend to Africans, not as some distant hope but a more immediate potential.

  4. Even that idea to build a health care insurance for these Conties (for just a view cents) is a geat thing. Would love we have more great thinker on our planet…

  5. Investment (at all levels but certainly at the bottom) is the most important nutrient for an economy and Africa is extremely deficient in it. While investors do have legitimate (though overly generalized) concerns about investing in Africa, there is so much untapped potential that a system like this could have a lot of impact, both direct and indirect. It is certainly not a panacea but Africa does not need panaceas, it needs real world solutions and there is nothing more “real world” than investment at the level where it is needed most.

  6. My fear is that government mandarins will sabotage the system since there are lots of politically connected “lenders” esp in the pawnshop-style business aka loansharks…

    Certainly beat sending money via Western Union or any of the other services. Nevertheless there are risks e.g. coercion…

    In the (good) ol’ days – Cash meant going to the bank. Limited means of extracting cash from a victim!

    Today – Forces the victim to withdraw from an ATM.

    Tomorrow – Sms the cash over asap! Or steal the victim’s password/account.

  7. Hash

    This is an idea whose time is coming.

    Someone will have to come up with an efficient and safe way to make micro-payments and money transfers for people in Africa without credit cards. I think that even more important is what you have touched on here: the ability to borrow very small amounts without any delay (which is essentially what you do with a credit card).

    Cell phones seem to be the ideal medium for this at this point due to their ubiquity combined with a lack of terminal connectivity (no credit processing machines on the ground) thanks to the high initial cost to obtain these.

    Can’t wait to see how this pans out.

    – Steve

  8. I need to now in detail about the mobile banking system so please provide documents that can be show every detial of the mobile banking system by texts as well as graphics i’m writing a simple book about the mobile banking system to crate awarness for the people, concidering this brefie and detail documents which show in a simple way for computer profissionals.

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