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Government of Kenya Launches National Broadband Strategy

On July 23, 2013, at a high profile event in Nairobi attended by the US Ambassador, Kenya became only the second country in Africa to launch an elaborate National Broadband […]

July 26, 2013/by actualize

Africa, Areas of Expertise, GBI Updates, Information and Communication Technology for Development, Integra News, USAF Updates, Where we work

Communications Commission of Kenya releases National Broadband Strategy for public hearing

This past January the Communications Commission of Kenya (CCK) presented the draft of their National Broadband Strategy for public review. The strategy outlines a comprehensive plan for bringing communications services and ICT business development to all of Kenya. Expected to cost US$ 2.4 billion, 70% is budgeted for national infrastructure while the remainder will be used for capacity building and content development. Funding will be a combination of public and private sources and will include accessing Kenya’s capital markets. Read more …

April 19, 2013/by actualize

Agriculture, Food Security & Rural Development, Areas of Expertise, Information and Communication Technology for Development, Mobile Money, Originally posted on the GBI Portal

Can this be an Opportunity for Mobile Banking in Ethiopia?

Photo Credit: The Economist

I participated in a very informative event this week in Washington DC where a researcher was sharing his experience on “Weather-Index based Crop Insurance for Smallholder Farmers in Ethiopia”. As I listened to the discussion as an agricultural information specialist, my concern was what is the role of mobile technologies in this?

According to the researcher, Dr. Shukri Ahmed a Senior Economist, Food and Agriculture Organization (FAO), the concept of crop insurance has a long history from Asia with the leadership of India. However, due to the challenges associated with insurance in general and access to credit to smallholder farmers, the idea somehow waned. But according to Index Insurance Innovation Initiative (I4), there is overwhelming evidence that uninsured risk can drive people into poverty and destitution, especially those in low-wealth agricultural and pastoralist households. There is therefore a re-emergence of insurance for smallholder farmers across the globe.

The speaker gave a detailed background to the study in Ethiopia and the importance of partnership in the design and implementation of the study. The difference, however, with this new approach to crop insurance for smallholder farmers is the use of index (indices) to support the insurance service, and intervention against emergency situation. But at the same time the study is targeting farmers that are relatively better off and who are already engaged in the market but are not investing in insurance due to the anticipated risks. The outcome of the pilot study is expected to help protect the livelihoods of smallholder farmers, who are vulnerable to severe and catastrophic weather risks particularly drought, enhance their access to agricultural inputs, and enable the development of ex-ante market based risk management mechanism which can be scalable in Ethiopia.

Dr. Shukri Ahmed, Senior Economist at the United Nations Food and Agriculture Organization (FAO)

Unbanked or Branchless Services

Adding another concept to an already very complex issue that tries to combine weather, insurance, credit/finance, and smallholder farming, should be carefully considered. But the key question is whether mobile technologies can play a catalytic role in this entire complex system?

Among the reasons for choosing a given area for the pilot study, include availability of Nyala Bank branches, the vulnerability of yields to drought, the availability of nearby weather stations, and the willingness of cooperatives in the area to purchase the new product. As the pilot study progresses, the possibility of scaling the project across the country is high. But what will be the implications for the absence of banks in the rural farming communities in a country that has an approximately one bank loan per 1000 adults? Can Mobile Banking help understand why smallholder farmers under-investment in agriculture?

A success story of mobile banking by the Dutch-Bangla Bank Limited (DBBL) in Bangladesh was recently highlighted by the GSMA Mobile Money for the Unbanked. Interestingly, the story pointed out how DBBL learnt from Kenya’s famous mobile money program M-PESA. Kilimo Salama (KS) is an innovative index-based insurance product that insures farmers’ inputs (seeds, fertilizer, pesticides), and outputs (crop harvests), in the event of drought or excessive rainfall. It uses weather stations to collect data and implements SMS-based mobile technologies to administer and distribute the payouts. Mobile technologies will not only help with the financial transactions such as seen in Kilimo Salama’s case but also in support of the weather stations for timely and accurate decision making for pay-outs.

My conversation with Dr Shukri about the possibility of integrating mobile money into the project to address the challenge of absence of banks in rural Ethiopia, revealed the huge untapped market for Mobile Banking in that country. However, the success of such services depends on a convincing business case for both the banks and Mobile Network Operators (MNOs). Most importantly, however, is the state of telecommunication infrastructure and regulation in the country. These need to be in place for services and applications to thrive. With this huge investment

Outside Ethiopia, I believe it is time for African countries to take advantage of the increasing mobile phone penetrations in the continent beyond social networking to general development applications such as for agriculture, health, education, and rural development.

To listen to the audio recording of the event, visit Center for Strategic and International Studies (CSIS).

August 25, 2012/by actualize

Agriculture, Food Security & Rural Development, Areas of Expertise, Information and Communication Technology for Development

Mobile Innovations for Agricultural Development: An Uncertain Trajectory

Photo Credit: The World Bank

There is no doubt that the current surge in mobile innovations for agricultural development is defying the normal progressive growth of agricultural technologies over the past decades. For centuries, innovations in agricultural technologies have been progressively slow. The emergent of information and communication technologies (ICTs) and their innovative use to support agricultural extension and advisory services has, however, changed the history forever. According to the World Bank report Information and Communications for Development 2012: Maximizing Mobile, close to 6 billion mobile phones are in use today, a jump from less than 1 billion subscriptions in 2003. About 77% of the 6 billion subscriptions is located in the developing nations in which 70% of the world’s poor whose main source of income and employment comes from the agricultural sector.

Agricultural Technologies and the Future In her 1991 paper “Beyond Tractors: The History of Technology in American Agriculture,” Deborah Fitzgerald, Professor of the History of Technology in the Program in Science, Technology, and Society (STS) at MIT, argued that the history of agricultural technology is in a very nascent stage of development, and it is difficult to predict the outlines of a more orderly, systematic future. Barely 20 years after her observation, the developments in mobile technology for agriculture have confirmed her argument. Little is known about any prediction of the current growth of mobile technologies, especially in the world’s poorest regions. It is also becoming more difficult to predict what the market will look like in the next decade given the fast pace at which the technology is growing.

So Why This Sudden Spurt? The 2nd chapter of the World Bank report referenced above titled “Mobilizing the Agricultural Value Chain” has identified a number of factors that are driving the increased adoption of mobile phones for agriculture in the developing nations:

Improved accessibility and affordability through expansion of mobile networks.
Increased capacity or bandwidth availability on mobile networks as the technology evolves.
Increasing data-enabled mobile devices with increasing affordability.
Innovative development of remote wireless sensors and identification technologies.
Increasing availability of specialized mobile services targeted to specific agricultural functions.

These and other factors, such as wide ownership of mobile phones, instant and convenient service delivery, increasing functions, and falling prices of mobile handsets, will continue to drive its adoption.

Looking into the Future of Mobile Innovations for Agriculture

Photo Credit: American Public Health Association

According to USAID, innovations must lead to substantial (not incremental) improvements in addressing development challenges. But this does not seem to be the case in the mobile agricultural sector. The role of mobile agricultural projects in addressing development challenges in the developing nations is yet to be empirically tested in most countries. Anecdotal results have been reported here and there, but there is little to cite about any substantial impact on agriculture and rural development. An interesting trend with the mobile innovations for agriculture pointed out by the report is that, the applications are usually designed locally and for specific target markets, with localized content specific to the languages, crop types, and farming methods. It continues that while these local designs may offer exciting opportunities for local content and applications development, they may also limit the economies of scale realizable from expanding from pilot programs into mass markets, potentially hindering the spread of new and promising applications and services. So while development practitioners are careful not to repeat the traditional “technology transfer” approach in the ICTs for development sector, they are also faced with the limitations of scalability of the locally developed mobile applications for agriculture.

Is Reverse Innovation a Possible Solution to Limited Scaling of Locally Developed Mobile Apps? The local app development market in the emerging economies is being boosted by the proliferation of Technology Hubs & Parks in these countries. But what are the approaches to development of applications within these hubs? How can we learn from the past challenges with technology transfer and the current scaling limitations of locally developed apps for agriculture? The concept of reverse innovation developed by Vijay Govindarajan, and Chris Trimble and explained in details with practical applications in their book, “Reverse Innovation: Create Far From Home, Win Everywhere”, could bring these two challenges together. A key component of the concept is about building Local Growth Teams (LGTs). Within the mobile agricultural sector, LGTs comprising of ICT developers, marketing specialists, and content developers in the emerging economies with strong link with global market could be developed. This will ensure that locally developed ICTs apps with inexpensive models and limited infrastructure to meet the needs of developing nations, can be easily repackaged as low-cost innovative goods for Western buyers. This could address the scaling challenge brought up by the report and at the same time limit the traditional diffusion of technologies from the developed to developing nations.

Oversights: Mobile Solutions for R&D and Data Collection? I would like to recap my recent work on “Mapping ICTs Along the Agricultural Value Chain” for USAID’s Global Broadband and Innovations (GBI) program. Two key components of the value chain, which seem to be overlooked, are ICTs for agricultural research and development (R&D), and ICTs for data collection to inform monitoring and evaluation (M&E). Firstly, mobile technologies for agricultural R&D are emerging, but due to the traditional under-estimation and under-investment in agricultural R&D in developing countries, little attention is being paid to its potential. There is huge potential in the use of mobile technologies to support the work of agricultural researchers, agricultural science students, extension staffs, and farmers to facilitate access to scientific knowledge and exchange of information between and among these actors. Unfortunately, this has been overlooked by this important report. Secondly, mobile technologies are being used along the agricultural value chain for data collection in order to inform policy and decision-making. The report did mention briefly the importance of mobile in agricultural data collection, for example the work of Grameen Foundations Community Knowledge Worker (CKW) program in Uganda and the Reuters Market Light (RML) in India. But in addition to these programs, there are host of new mobile applications that are being used in this area that need to be acknowledged. Examples include iFormBuilder, EpiSurveyor, Open data Kit, among others. These new mobile applications are essential for the work of extension staff – both public and private to facilitate their work. Most importantly, timely and accurate data through these applications will lead to actions that will benefit the smallholder farmer in a number of ways, thereby increasing their productivity.

Conclusion The growth of mobile technologies for agriculture has outpaced the speed of past technological developments within the sector. While the invention of tractors in the 1800’s was acclaimed a significant breakthrough for agriculture, not even the green revolution in the 1900’s can be compared to the extensiveness and intensiveness of mobile technologies for agriculture. The World Bank report reference in this post has done excellent job by carefully selecting experts in the field of ICTs for development to delve into a number of cases worth following. Specifically on the second chapter that deals with mobile technologies and agriculture, I believe practitioners, researchers, technology developers, policy makers, and users of agriculture and mobile technologies should look critically into the recommendations given at the end – business models, ICT skills and the supporting infrastructure to insure the growth and sustenance of the revolution.

August 3, 2012/by actualize

Mobile Money, Originally posted on the GBI Portal

M-PESA extends its reach

The following is a guest post by Billy Jack from Georgetown University’s Economics Department and Tavneet Suri from MIT’s Sloan School of Management.

Man talking on cell phone next to an M-PESA to up stand New data from the fourth round of a survey of Kenyan households confirm what every visitor to this East African nation knows: the spread of mobile technology and its adoption by broad swathes of the population continues. Probably the most successful of all the innovative mobile solutions is M-PESA, Safaricom’s mobile banking product that allows users to send money across the country (and recently, beyond) in an instant, as well as providing a safe and secure savings instrument, and a convenient bill payment capacity.

Launched in March 2007, M-PESA was originally going to be “banking for the unbanked” and “financial services for the poor.” While members of the economically marginalized population did adopt the service early on, the first rounds of our survey showed that up-take was nonetheless concentrated amongst those who were relatively better off. It was natural to ask whether M-PESA would show the same pattern of adoption as so many other promising technologies in the developing world – from hybrid seed to insecticide-treated bed nets, from seat belts to solar panels – with those at the bottom of the pyramid struggling to exploit the potential benefits.

Through technological efficiency, user-friendly design, marketing acumen, an explosion of cash-in/cash-out agents, regulatory largesse, and perhaps some luck, M-PESA is now used by 86 percent of households outside Nairobi. Of particular importance however is the changing pattern of utilization, as adoption spreads to the lower strata of the socio-economic ladder.

Our data, which is representative of most of Kenya outside the capital (where M-PESA is ubiquitous), shows a growing share of lower income households using M-PESA. For this population, median per capita consumption is low, a few cents less than $2 per day; and the bottom 25 percent of the population live on $1.10 per day or less. Our survey, which tracked the same households over a four-year period, found that in 2008, households with consumption above the median were nearly three times as likely to use M-PESA as those in the bottom quartile. In particular, half of those in the top half used M-PESA, while only 18% of those in the bottom quarter did so. Utilization among those in the second poorest quartile was intermediate, about a third (see Figure 1).

Figure 1: M-PESA use by daily per capita consumption

M-PESA has grown in all strata of the population, and while those at the top remain more likely to use the service, the gap between the top and bottom has narrowed substantially, partly due to the steady increase among the poor, and partly due to saturation among the better off. But concentrating on the gap between rich and poor is less informative than focusing on the simple fact that nearly three-quarters of the bottom quartile have adopted a service that five years ago did not exist. If anything, high rates of adoption by the better off have helped sustain the product, thereby facilitating access by the poor, as the pricing structure does not distinguish between services provided in cosmopolitan Nairobi and remote Turkana, or between remittances sent across the street or across the country.

Similarly, because of the correlation between income and bank access, M-PESA was initially used more by the banked population than the unbanked. Indeed, in 2008 just one-in-five of the unbanked population used M-PESA, but since then while the number of households with bank accounts has remained relatively stationary, the share of this unbanked population who use M-PESA has shot up to 75 percent (see Figure 2). Again, focusing on the divergence between the unbanked and the banked populations (fully 96% of the latter are now M-PESA users) is of limited utility: the fact that so many of the unbanked population have access to a modern electronic financial tool is what’s important.

Figure 2: M-PESA use by banked status

Finally, very recently Safaricom has revised the M-PESA tariff schedule. Until now, the cost to the sender of sending money was a fixed 30 shillings (about 40 cents), plus the cost of withdrawing the money, if the recipient wished. This made small transfers of a few dollars relatively uneconomic, while apparently benefiting those who could send larger amounts. The fee structure has however been revised, with users able to send up to 50 shillings for a charge of just 3 shillings, and from 50 to 100 shillings for 5 (see http://www.safaricom.co.ke/index.php?id=255 for a complete listing). This reform could well expand the benefits accessible by those at the bottom of Kenya’s pyramid even further.

April 9, 2012/by actualize

Agriculture, Mobile, Originally posted on the GBI Portal

Another App for Smallholder Farmers: M-Farm

Photo Credit: M-Farm

M-Farm is an award winning mobile solution for agribusinesses and farmers currently being piloted in Kenya. It is an SMS and web-based application focused on improving weaknesses in the value chain. It is a transparency tool for Kenyan farmers to get information pertaining to the retail price of their products, buy their farm inputs directly from manufacturers at favorable prices, and find buyers for their produce.

Why M-Farm?

The M-Farm solution was developed based on the marketing challenges of rural farmers in Kenya. Smallholder farmers unaware of the market of the various commodities, produce in excess and are faced with the problem of getting the worth of their produce. Poor information on farm inputs and lack of access to these inputs such as fertilizer, seed, agrochemicals and other equipments are huge obstacles to increasing farmers’ productivity. The inability of the farmers to transport their produce to regional markets after harvesting also leads to the exploitation by middlemen who offer meager prices for the produce, and even delay payments for the commodities.

M-Farmers’ Approach

The M-Farm solution aims at giving farmers a voice by connecting them with each other in a virtual space for access to affordable farm inputs and also be able to sell their produce collectively. Specifically, the solution works through:

Price Information: M-Farm enables farmers to inquire current market prices of different crops from different regions and/or specific markets
Group Buying: M-Farm is able to aggregates farmers needs/orders and connect them with farm input suppliers
Group Selling: M-Farm enables farmers to sell collectively and connect them with a ready market thereby increasing their productivity.

M-Farms’ Solution

The M-Farmer solution has taken advantage of the on-going phenomenal growth of mobile technology across Africa. With access to the Internet yet to have impact on rural farming in these areas, M-Farm has adopted an SMS-based solution for achieving its goal.

Farmers in Kenya simply SMS the number 3535 to get information pertaining to the retail price of their produce, buy their farm inputs directly from manufacturers at favorable prices, and find buyers for their produce. Also, M-Farm has a contract with a local exporter, who buys the produce directly from the farmers using their mobile devices thereby minimizing the transportation challenge. This gives farmers access to a reliable and guaranteed market that enjoys stable year-round prices while eliminating middlemen and lowering transaction costs.

Below is a 2-minute clip on the winning of M-Farm’s IPO48 competition featuring Jamila Abass, a co-founder and CEO of MFarm Ltd (K) and other team members.

Access to M-Farm is by subscription with a free 30-day trial for users. For more information on M-Farm, visit here.

April 9, 2012/by actualize

Economic Growth & Trade, Originally posted on the GBI Portal, Workforce Development

Kenya’s iHub gets Google funding

Technology giant Google has announced Sh28 million (R2.5-million) in funding for Nairobi’s tech innovation centre, iHub, and the Kenya Education Network (KENET).

Google has announced R2.5-million in funding for Nairobi's tech innovation centre iHub (image: iHub)

Google has announced R2.5-million in funding for Nairobi’s tech innovation centre iHub (image: iHub)

iHub plans to use the funding from the search giant to expand its infrastructure, while KENET says it will continue to “connect educational institutions with a private, affordable high-speed Internet” network.

“We have been partners with Google for about the last two years,” says Erik Hersman, co-founder of the iHub.

“This is just an extension of that, filling niches that the community needs. One of Google’s big drives is to increase the uptake of Internet in Kenya.”

iHub has received Sh12 million of Google’s funding, which Hersman says will be used to expand its infrastructure.

The iHub community also plans to set up a UX testing lab and an “ExchangeBoard Project”, which will display the latest newsfeeds within the tech community. An experimental supercomputer environment to host data-intensive applications is also on the agenda.

Meanwhile, KENET MD Meoli Kashorda said: “We are very happy with the partnership we have with Google to support innovation and technology in Kenya.

“This contribution will help KENET improve the Internet connectivity in six educational institutions in Kenya, leading to increased affordable broadband Internet access by students, faculty and researchers.”

Michelle Togo

April 4, 2012/by actualize

Connectivity, Originally posted on the GBI Portal

Safaricom to double broadband capacity

Kenya’s mobile service provider Safaricom will double its broadband capacity next week, opening a new battlefront in the data market just after Airtel rolled out its 3G network in February.

Safaricom CEO Bob Collymore (image: file)

“The network will run at 42 Mega bits per second (mbps) from the current 21mbs and it will be the fastest network in the whole of East and Central Africa,” Safaricom CEO Bob Collymore said.

“We are already receiving the modems to support the new network,” Collymore said. However, the rollout will begin from Nairobi and its environs before going national. Collymore was speaking at the connected Kenya Summit 2012 in Mombasa that began on Tuesday.

The summit is in its fourth year and is the brainchild of the Kenya ICT Board in collaboration with industry players and government.

The four day conference will see players discuss how to build the knowledge economy, how to take advantage of the open data, linking innovation and trade.

Players will also discuss how to involve citizens in the growth of the sector, and the opportunities in e-commerce and retail trade.
Information and communication permanent secretary Bitange Ndemo is expected to present the National ICT Masterplan 2017, which outlines the government’s blue print for ICT on Thursday.

April 4, 2012/by actualize

Mobile Money, Originally posted on the GBI Portal

Introduction of Microinsurance into Mobile Banking’s Product Suite

Banner for Telenor's mobile banking product

Photo Credit: CGAP

As written in this blog before, there has been continued innovation in the mobile banking sector in developing countries this year. But, as surmised by CGAP, there is a greater need to find a balance of products that meet the specific needs of those who traditionally have not had access to formal financial services. While mobile payments, transfers, credit and savings have all expanded using the branchless banking model, there has been a lack of products that provide insurance via mobile phones. That is not to say that microinsurance has not been available in the past. But its availability came from the social sector side, instead of the private side. But there has been a shift as the business case becomes more valuable to both insurers and mobile network providers alike.

Just over a year ago, Swiss Re, re-insurance company, stated that the market size for microinsurance for those making under $4 a day in developing countries totals $40 billion. For businesses, that is a tough opportunity to miss. But simply because the market is there does not make it a profitable opportunity. Many of the targeted customers live in rural regions and have never purchased insurance. With a lack of access and knowledge, the case for profitability would need to include a large upfront investment. But technology and innovation can help to fill in those access and knowledge gaps. According to a recent report by Accenture entitled “Succeeding at microinsurance through differentiation, innovation and partnership,” technology offers real-time connectivity, flexibility and scalability which will help insurance companies to reach new customers in emerging markets. With an estimation of 2.3 billion people who are low-income and need to protect their income and assets, Accenture argues that insurance companies need to view these potential customers as “tomorrow’s premium prospects.” A clear example of this is the millions of individuals who have rose out of poverty through the economic prosperity in China and India over the last decade. By providing products that fit the needs of low-income customers, companies can build brand loyalty and reputation in these regions and reap the benefits as their customers improve their economic state.

As stated in the report, the need to leverage technology in order to reach the customers will be key to creating the short and long term business cases. By permitting customers to purchase and/or manage their accounts via mobile phone, this allows for the business structure to be profitable in the short-term. At least that would have to be the rational thinking as MNO (mobile network operators) are partnering with banks and insurance providers to offer a suite of financial service products (including microinsurance) to their customers.

Two Recent Examples

As a part of a larger suite of products, Airtel Ghana has partnered with uniBank Ghana Limited and Star Microinsurance to provide insurance free-of-charge to Airtel’s subscribers using their mobile money product. As long as the customer maintains an average minimum balance of GHC 5 (roughly $2.84) at the end of every month, they, along with their direct family, will be covered by insurance. Airtel Ghana sees the partnership and new products leading to an improved return on assets, an increase in the customer base and the creation of a one-stop shop for uniBank clients. But one of the challenges will customers registration as an individual must have a valid photo ID and complete an application along with having an Airtel SIM card.

In Pakistan, the MNO Telenor also will be releasing a free microinsurance product through Easypaisa, a branchless banking services company. Easypaisa was created in 2009 by Telenor Pakistan and their Tameer Micro Finance Bank. The free life insurance will be provided through Easypaisa and in partnership with Adamjee Life Insurance Company Limited (also located in Pakistan).

As you can see, mobile technology and the focus of creating value-added service by MNOs has increased the access to microinsurance in developing nations. Even in Kenya, insurance associations are pushing their members to utilize mobile phones in order to reach clients in new and untapped markets. In the push to increase access to financial services, the business cases for microinsurance are being shaped around mobile technology. And amazingly enough the insurance is being provided for free.

April 3, 2012/by actualize

Economic Growth & Trade, Originally posted on the GBI Portal, Workforce Development

African ICT job opportunities high, skills lacking

A new survey published on Tuesday reveals that as telecom jobs in Africa booms, the continent still lacks skilled workers, calling on universities and governments to do more to boost the output of telecom and IT specialists in Africa.

Landelahni CEO Sandra Burmeister. (image: creamermedia.co.za)

The 2012 Telecommunications Survey, carried out by global Amrop executive search group member, Landelahni Business Leaders, highlights the skills gaps in the African ICT sector.

“Information and communications technology is a pre-condition for socio-economic development and national competitiveness. However, a shortage of key skills is a huge constraint,” Landelahni CEO Sandra Burmeister said in the report.

“Opportunities abound throughout Africa, despite the challenges of poor infrastructure, disparate regulatory environments and ferocious competition. Spending on ICT infrastructure is expected to total more than US$23 billion a year over the next few years. South Africa and the rest of the continent need to skill up to maximise this opportunity.

“(South African) minister of science and technology Naledi Pandor has acknowledged that the telecommunications industry holds promise as the backbone of this country’s economic, industrial and innovative advancement. Similarly, the Green Paper for Post School Education and Training released in January (2012) states that ‘ICT is increasingly becoming a critical ingredient for participation in a globalised world’.”

It also called on governments to do more to boost young people’s ability to enter the fast-paced ICT world with the skills needed to bring Africa into the global technology world.

Joseph Mayton

March 29, 2012/by actualize

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