The ICT Penetration, M-Pesa and Mobile Money in Kenya (Research Paper Sample)

M-pesa and Mobile Money in Kenya
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M-pesa and Mobile Money in Kenya
ICT PENETRATION IN KENYA
The ICT penetration in Kenya continues to expand at a very high rate. This is because there has been a rise in the number of people using mobile phones and having access to the internet across the country. According to the account by the country’s Communications Authority, mobile penetration had reached 80.5% as per the last statistic on the sector (Markovich et.al, 2016). The exponential growth of the industry is also made possible by the numerous innovations in the area. The ICT segment has outdone all the other sectors of the nation’s economy. The division is conquered by the achievement of mobile money as well as that of Mobile app which the country is best-known to take the lead. But, the IT part is urbanized in a small amount; it is directed to global industries and it very minute in terms of income and impact on the financial system.
In Africa, the penetration of ICT is still very little. The continent has the least diffusion of the internet around the globe. This shows that Africa is still far behind in terms of ICT growth. It is believed that the dispersion for internet users in the Sub-Saharan Africa nations is less than 7% with that of the broadband being under 1%. In contrast, the ICT penetration in America is very high when compared to that of Africa. Internet penetration in the United States is at 61 percent while that of Africa is 16%. This shows an enormous margin in the ICT penetration between the two continents; hence, Africa has a lot to do in the sector (Markovich et.al, 2016). In other developing nations such as East Asia and Pacific countries, Latin America and the Caribbean there are about 20% of internet users. Still there is a big disparity with that of Africa which is just about 7%.
Safaricom’s entry into M-pesa was not risky to its focus on providing telephone service in that for the company to successes it had to explore many options available in the market. The company’s decision to venture into m-pesa has proven to be more successful than that of service provision. Also, it could not have lost focus as it had measures in place to help in its performance (Mbiti et.al, 2011).
It makes sense for Safaricom to offer free services to its clients and charge its representative because their clients normally get money from the customers on behalf of the business. Also, the agents usually get a certain amount of money from the company from the transactions done by the corporation clients. The company also gives free services as a way of motivating its customers and encouraging them to continue being loyal to the enterprise. There are also other mobile service providers, with this Safaricom provide frees service in order to retain its clients and at the same time it helps attract new customers. Besides, agents also profit from the company hence they have to pay a certain amount as they have lots of gains from the business.
Yes, Safaricom does not employ a monthly subscription to its customers. This is opposition to the standard practice of banks who charge patrons a monthly payment. It’s a contradiction because the business if just the same as other banks. The services provided by the company are not any different from those offered by banks, hence; just like other banks it should charge a monthly fee to its customers (Mbiti et.al, 2011). On the other hand, I think that the business is not using the monthly subscription as it mainly deals with the transfer of money and it does not have ledger fees. While banks usually have ledger fees, and this makes them to charge some charge to their patrons.
Traditional banks in Africa should tackle the challenges posed by emergence of M-peas by:
Improving trade and regulatory restructuring: governments in Africa should ensure that there is a direct contribution to financial activity. This is because the use of trade liberalization definite improvements boosts domestic rivalry and minimizes wastefulness. Nation, in Africa, should also take part in intraregional commerce and find possible ways of doing trade with less competition (Jack et.al, 2011).