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“Mobile money in Kenya needs more regulation” – World Bank

July 20, 2012 • Mobile and Telecoms, Top Stories

According to the Word Bank, the mobile money market in Kenya is in dire need of further regulation in order to provide a level playing field for all the providers and to provide a platform for fair competition.

The mobile money market in Kenya is in dire need of further regulation (image: stock.xchng)

A report published by the body questioned hesitation by mobile operators to integrate their systems, which it says is a breeding ground for uncompetitive tendencies.

“Interoperability will benefit operators by expanding the pool of customers, reducing incentives to have multiple SIM cards,” the report said, which is titled ‘Information and Communications for Development 2012: Maximising Mobile’.

The World Bank is skeptical about mobile banking in Kenya, especially since Safaricom’s M-Pesa holds a 68% stake in the market for Kenyans. They said that when a mobile network operator is dominant in the space, it is at a clear advantage in creating the terms of mobile banking.

“Additional regulatory attention is also needed for issues of competition and interoperability, like other network industries, economies of scale and high barriers to entry could create uncompetitive market outcomes in the mobile money industry,” said the report.

The Communication Commission of Kenya also recently released statistics on mobile money in the country, saying that more than 40 million people make use of the service – which places Kenya in the top position with 47.5% of the global share, with 18.9 million mobile money subscriptions.

But Safaricom Chief Executive Bob Collymore is opposed to such regulatory motions, while competitors Yu and Airtel have asked for it.

“We have not seen sufficient demand from customers to inter-operate. The World Bank should show us where this model has been implemented, which it hasn’t since the M-Pesa model is the most successful,” Collymore said

Charlie Fripp – Consumer Tech editor

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