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Mobile wallet service M-Pesa, that allows registered users to transfer money from their mobile phones to other mobile phone users in India, is a prime example of how a corporate social responsibility innovation has transformed into a mainstream business opportunity, according to Pradeep Pursnani, Deputy Director, Shell Foundation.
Mobile telecommunications major Vodafone, teamed up with Safaricom, a leading Kenyan mobile operator, to launch a service in Kenya in 2007, that would allow registered users transfer money from their mobile phones to other mobile phone users.
The CSR pilot project known as M-Kopa, initially combined solar and mobile technology to provide clean energy to off-grid villages in East Africa. It made clean energy affordable to customers in Kenya by combining machine-to-machine technology and mobile payments, and currently offers customers the chance to purchase solar energy equipment.
``Our partner in Africa, M-Kopa, was working with Vodafone on mobile money transactions,'' said Pursnani. ``In India, Vodafone has rolled out M-Pesa. Shell Foundation realises this is another opportunity for collaboration, and since Vodafone is going to take their learning from Africa and bring it here, so can we,'' he told Business Line.
Teaming up
Nick Huges had previously founded Vodafone’s M-Pesa platform. In 2010, Shell Foundation partnered with Nick Huges, Jesse Moore and Chad Larsson to test the potential for mobile payment systems to provide financial services to poor communities in Kenya.
Market research showed that just 15 per cent of Kenyans were connected to the national grid, and 96 per cent of Kenyans were connected to mobile phones. The Shell Foundation resolved to use mobile technology to help finance affordable solar energy.
Pursnani said the founders built on the experience in setting up the mobile money platform M-Pesa, to incorporate the use of mobile money directly into energy products. The aim was to provide credit to enable low income consumers access energy products, and pay for them in instalments using mobile money platforms.
With 11 million registered users in just three years, which is 50 per cent of Kenya’s adult population, tens of millions of transactions were conducted per month. Vodafone has since rolled out M-Pesa in Tanzania, Afghanistan, South Africa and Fiji. Vodafone brought the platform to India in a pilot, and officially launched it in April 2013.
``We work with corporates, we see the inter linkages,'' continued Pursnani, speaking of Shell Foundation’s work. ``We look into the social impact at the last mile, and see the possible viability and scale ramifications that will impact business,'' he added.
Stating that once solutions are found to barriers that ail small businesses, ``there is an opportunity for financial innovation. We have created solutions for working capital, solutions for small enterprises that need access to debt, but don't have any collateral. We have the resources to identify opportunity, to build capacity, innovate, take risks and fail. Other organisations don't have that,'' he said, adding that there are many tangible results that come to the fore when CSR transforms into a business.
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