Vodafone’s Booming M-Pesa Shines a Light on Valuable Africa Fintechs

Vodafone reports the rapid growth of African mobile money platform M-Pesa as telecommunications groups and their rivals are exploring ways to unleash the value of fast-growing financial fintech on the continent.

According to a UK company, the number of transactions made on mobile payment systems increased 44% to 4.5 billion in the three months to June, during which € 63 billion was remitted.

Named after Swahili money, M-Pesa was launched in Kenya over a decade ago as a basic money transfer system that works with basic feature phones. It quickly expanded to other countries and became a fundamental part of Africa’s economic system, and in the age of smartphones, customers used it to pay wages, buy insurance, and pay utilities.

Vodafone CEO Nick Read said Friday that 50 percent of Kenya’s gross domestic product is now being carried over to M-Pesa.

The service has more than 40 million users in seven African countries, accounts for 30% to 50% of GDP in some other markets, such as Ethiopia, where Vodafone does not have a communications network. It will start soon in the country.

The growing value of European and African fintech companies warns Vodafone: Hidden value Of M-Pesa on the balance sheet. This year, the tower business was split and Vantage Towers is currently listed in Germany with a market capitalization of € 15 billion, and according to Read, the financial services business is legal to “emphasize the size and scale of its business.” It is divided into business units separated into. ..

Other companies have already taken action. Airtel Africa sold its stake in a small mobile money service to Mastercard this year for $ 100 million, bringing the value of its fintech platform to $ 2.6 billion. Meanwhile, South Africa’s MTN says it is open to spinning off mobile money services to increase its value.