COST MAP

Welcome to the Mapping the Cost of Mobile Money for SMEs in Kenya Project!

In recent years, mobile money has revolutionized the financial landscape in Kenya, providing unprecedented access to financial services for individuals and businesses alike. However, for Small and Medium Enterprises (SMEs), the costs associated with using mobile money can significantly impact their operations and profitability. This project aims to explore and map these costs across different regions in Kenya, providing valuable insights for SMEs, policymakers, and financial service providers.

Background

Kenya is a global leader in mobile money services, with platforms like M-Pesa revolutionizing financial transactions. While mobile money has enhanced financial inclusion, the varying costs of these services can significantly impact SMEs, which are vital to Kenya's economy. This project aims to map these costs across different regions, providing insights to help SMEs manage their finances better and to inform policy for fairer practices.

Objectives

So what are the objectives of this project?

• Identify Cost Structures - Analyze and map the fees and charges for mobile money transactions across different regions in Kenya.
• Assess Impact - Evaluate how these costs affect SMEs' financial health and operations.
• Provide Insights - Offer recommendations to help SMEs optimize their mobile money usage and reduce costs.
• Inform Policy - Provide data-driven recommendations to policymakers for fairer mobile money practices.

Research Methodologies

So far, we have currently used two methods of research.

• Survey - We conducted a survey among business owners of SMEs we could reach. We have had a sample of 54 responses for now.
• Articles and thesis - We read these materials that were already published by various trusted organisations.

Findings

Key Insights

• Lack of competition among Mobile Operators
  From the survey, we concluded that their is minimal competition among the operators available in Kenya. Mpesa, A subsidiary of Safaricom dominates this field. This encourages them to hike transaction-costs.
  
• Impact on pricing of goods
  High transaction costs forces a good portion business owners to hike the prices of their goods and services. SMEs that cannot pass on these costs to their clients due to competitive pressure may experience reduced profit margins, impacting their ability to grow and sustain operations.
  
• Frequent Usage Patterns
  There is a high frequency of transactions using mobile services in SMES' daily business operations. This leads to accumulation of fees that affects their profitability.
  
  Despite these according to an article by Kabui Mwangi,a business and tech reporter, on December 19 2023, suggests that e-payments usage frequency may reduce due to the high taxes levied by the government. More information can be found in Business Daily.

CostMap

Informed by our comprehensive research on the cost of mobile money for SMEs in Kenya, we are excited to introduce CostMap. This innovative tool is in development to help small and medium enterprises better manage and reduce the costs associated with mobile money transactions.

Why we want to develop this product

Our research shows that frequent mobile money transaction fees significantly impact SME profitability. SMEs often lack the tools to optimize these expenses. In response, we want to develop the SME Mobile Money Cost Optimizer, CostMap, to help businesses manage and reduce these costs effectively.

Key Features

• Cost Analysis
  Analyze and track mobile money transaction fees.
• Tariff Comparisons
  Compare transaction fees and identify the most cost-effective method of transactions.

Our Team