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Famine in Africa

Money goes mobile in developing economies

Scott Tong Nov 17, 2011
Famine in Africa

Money goes mobile in developing economies

Scott Tong Nov 17, 2011

Steve Chiotakis: In famine-ridden Somalia, there are new reports that tally an increasing flow of refugees to Kenya — almost 9,000 a month. And in refugee camps, there’s a new economy emerging — where Somalis get food, medicine, and even money from relatives — through their cellphones.

From the Dadaab refugee camp in Kenya, Marketplace’s Scott Tong reports.

Scott Tong: Just past the kids, the goats and camels at this refugee camp, there’s shack that says Safaricom — a cell phone store. A refugee steps to the counter, fiddles with a cheap Nokia, walks out with $16.

Store manager: This man withdrew 1,500 shillings.

The store manager explains: The refugee got noney from a relative far away, via cell phone. Just now, he cashed out — all you need is a text message and a PIN number. Out of every 10 people here, five live on $1 a day. Three have electricity. Seven do mobile money.

John Hoddinott: The potential for mobile phones is absolutely fantastic.

That’s John Hoddinott of the International Food Policy Research Institute.

Hoddinott: You can transfer money almost instantaneously, which cuts out a lot of the transactions costs. It’s literally mobile money — they can take it and redeem it in lots of places.

Kenya’s system is called M-Pesa, which is so common it’s a verb. As in, ‘Did you just M-Pesa while driving?’ Yes, my cabbie Peter just texted in a church tithe.

Peter: I am almost 500 kilometers from my home church. And the fundraiser is going to start at 11; I had to send a donation.

In a minute, he gets a text.

Peter: Which has confirmed that I’ve sent…

Tong: I tell you what, you drive.

Turns out you can M-Pesa at the grocery store, pay utility bills, etc. So I join in.

Teller: How much? 1,200

Tong: 1,200.

In Nairobi, I shop for a soccer jersey for my kid. And then, out comes the phone.

Tong: Can I pay you M-Pesa?

Merchant: Yeah, yeah it’s OK. No problem.

Tong: OK, now what? Enter the amount.

I text over $12 for the jersey, plus another 26 cents for the transaction. Twenty seconds later, text message.

Tong: Confirmed. Oh cool.

He gets his money, I get my shirt. It’s that easy — for farmers, herders, refugees across Kenya.

At the intersection of I.T. and development, I’m Scott Tong for Marketplace.

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