Dealing with money in Kenya is an
awkward issue. The highest denomination note is 1,000 shillings; that is about 9
euros. This creates challenges when you have to pay for more expensive items as
you have to carry around stacks of notes. Now this might make you feel a bit
gangster, as you pull out your fat wallet (see pic) and additional envelopes of
money. However it also creates security issues as it becomes tough to conceal
your wealth ("Is that a bundle of 1,000 ksh notes in your pocket or are
you just happy to see me?!") Take my earlier post where I went to the
shanty part of Kariobangi with my cousin to buy a car engine. We had to somehow
conceal 90,000 shillings from curious loiterers in a poor area of town. In a
country where 90,000 shillings roughly equals the annual minimum wage, the temptation to mug us, had we not been
careful, would have been great.
 |
| Most days for the last two months, my wallet has looked something like this. At least at the beginning of the day. End of the day is a different matter.... |
Faced with such limitations, naturally
you would expect some kind of alternative to hard currency to emerge. The first
place you'd expect such a solution would be the banking sector. Incredibly,
Kenya has forty four (44) different commercial banks; that is about one banking
chain for every million people in the population... though in reality there are only around 16m
bank accounts in Kenya in total (so on average each bank has 300,000 accounts).
You'd imagine with such an overcrowded sector, competitiveness would breed
excellence. Sadly this is not the case based on my experience. Banks are
expensive and slow. Cheques are still widely used and internet banking is closed
for maintenance more often than the London Underground.
Thankfully though there is a hugely
popular alternative payment system in place in Kenya. It is called Mpesa. It
allows you to send money through your mobile phone to another mobile
phone. The system has been in use in
Kenya since 2005, and indeed 17m accounts have been registered so far. Indeed
Kenya was the country that invented telephone payments - the rest of the world
is years behind. As well as being innovative, Mpesa is reliable, cheap and
effective. After over two months here, I finally got round to setting up Mpesa on
my phone this week, and I can say it is a joy.
As you can imagine, repairing a
house is not a cheap affair anywhere, and Kenya can be included in this. I
spent a large part of October and November trying to get my (and my wife's) savings
out of Europe to Kenya to pay for the works. Most of this period was lost
fighting with Western Union. Before I came on this trip, I'd always associated
Western Union with stew cooking Jamaican mamas sending money "buck
ome". However, it emerged as one of
the most cost efficient ways of sending money to Kenya and I hence decided to
set up an account. Following this, during the course of October, my perception of
Western Union changed to one of a unresponsive company which makes Belgian
communes appear customer friendly. So when it came to phase two of sending
money from Europe to Kenya, I was pleasantly surprised to discover the responsive
South African company Mukuru which allows you to send money from the UK
straight to a phone in Kenya via Mpesa. I have in turn moved away from
unreliable internet banking and started paying my contractors directly with
Mpesa.
In summary, Mpesa is a revelation,
and a sign of how a developing country like Kenya can leapfrog the whole
developed world in an area. The only downside of Mpesa I have noticed so far is
that you have to pay even more attention than ever to your phone!
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