Development of mobile phone applications has particularly been unrivalled/FILE
NAIROBI, Kenya, Apr 10 – That Kenya is one of the global technology innovation hubs is without a doubt. The country has over the last 10 years been buzzing with developers earning Kenya a place among the world’s best in ICT applications.
Development of mobile phone applications has particularly been unrivalled. Safaricom’s money transfer service, M-PESA has been a revolutionary tool that has now evolved to become an alternative mode of payment that offers convenience to customers and businesses alike.
With this realisation, start up companies such as merchant service provider Kopo Kopo, have seen an opportunity to exploit.
Kopo Kopo Vice President of Product Development Dennis Ondeng says they strive to help small businesses integrate mobile money in their operations.
“Statistics show that more than 20 percent of Kenya’s GDP (Gross Domestic Product) is moving through M-PESA but there is a huge gap in what Small and Medium Sized Enterprises (SMEs) adopting this huge driver of the economy,” Ondeng explained of their decision to push for the adoption of mobile money payments in such firms.
Kopo Kopo opened its Kenyan doors in April 2011 and has made great headway in helping SMEs to leverage mobile money service as demonstrated by the growth of their developers from the initial four to 12.
Playing in the same space of mobile money in the banking and finance sector is Zege Technologies which was registered in June 2010. Stella Njoki one of the partners at Zege Technologies explains that their invention ‘MPAYER’ helps to integrate the mobile payments with the banking systems.
“It’s not just an information management system but it is also a financial system that helps you to debit and credit the necessary accounts that come through mobile payments,” she says.
Besides automating and easing the mobile money transfer process, MPAYER results in increased transaction speeds and enhance their accuracy.
The ‘intelligent’ system provides a real time payment solution to the businesses while also providing notifications to customers when they make their payments.
Also causing heat waves in the accounting field is ‘Uhasibu’ which is an online accounting package that is built specifically for Small and Medium Enterprises in East Africa.
Uhasibu Founder Michael Peterson says the package is designed to help improve a firm’s financial management by generating Valued Added Tax reports as required by the regional revenue authorities. It also helps in the management of petty cash by ensuring that the accounts are kept up to date while reports and alerts are emailed to the manager and also enables a company to keep track of partial payments.
Besides sharing a passion to develop innovative mobile applications, the three firms are some of the first batch of six beneficiaries of a World Bank sponsored initiative, M-Lab that incubates start up developers in the country.
Business incubation refers to a process where budding entrepreneurs are nurtured and supported by providing the environment, resources and facilities they need to grow.
With statistics showing that an estimated 70 percent of all new establishments fail in the first three years, the incubation concept – that is picking up pace in Kenya- is designed to improve these numbers and support the growth of small businesses.
M-Lab is housed at iHub which is an open innovation space where budding technologists, investors, tech companies are hosted for at least one year as they try to improve on their product offerings and scale up their operations.
With 20Megabyte (MB) Internet connection, the hub also provides office space at subsidised rates; expertise; training, meeting rooms and a good testing laboratory equipped with phones.
With these firms using a ‘lean start-up method’, iHub enables them to somewhat attain their aim of being frugal.
For instance, Ondeng explains that were they to operate on their own and outside the hub, they would have had to raise between $200,000 (Sh16.6 million) and $300,000 (Sh24.9 million) per year just to keep their business afloat.
However, operating at M-Lab enables them to save about 60 percent of that amount.
Although these incubatees value the offerings, what they treasure most is the networking and mentorship opportunity that the hub affords them.
Business Development Manager at M-Lab East Africa Matia Mandela says the project’s overall objective is to encourage participation of particularly the youth in the development of mobile solutions which has been an area that has recorded phenomenal growth in the last decade.
“Our biggest brief is to get these entrepreneurs on board at the idea stage, link them up with mentors and coaches who now guide them through the process of transforming these ideas into enterprises,” Mandela explains.
Given how attractive the offer is, the development manager says they have criteria where they invite calls from potential incubatees. For it to be considered, the idea has to be innovative and has aspects of novelty.
“Thirdly, it must be an idea with the potential for growth,” he adds while admitting that those with a mobile aspect have a higher chance of being incubated.
Mandela however decries the lack of awareness about such programs as investment opportunities.
Attributing this to the obsession to spend on the traditional modes such as land and shares, he says business incubation can provide Kenyans with opportunities to invest in people’s ideas.
“This is because once that small company grows into the next ‘Google’ and Microsoft, then you create a network of entrepreneurs who then employ other people,” he argues adding that this is the only way the country can transform into a knowledge economy.
In the meantime, Mandela says they intend to keep the resource-intensive project alive by sourcing for partners who can contribute towards incubating many more developers even at the county levels.
