Fintech & Tech are not exempt: Commit to a Purpose or forget about your Legacy
Inspired by the M-Pesa Story
A company`s Purpose and its commitment to People, are the core factors that will determine whether the business is Economically Sustainable. Economic profit is broader than financial profit (which it does include but not only).
Like many words used in politics, Economy has its origins in Ancient Greece (politics too). It comes from the Greek oikos (Οίκος) which is the household and again is broader than the physical house and includes the people, the property (land) and everybody involved in sustaining this ecosystem (eco again from Οίκος). Nomos (Νόμος) is the law which means the rules and ways of managing this oikos (Οίκος).
Nowadays, we evaluate a viable economic business typically based on increasingly narrow metrics that are mainly purely financial. Our choices, our votes, and our behaviors are completely misaligned with our value system. We talk about the value of impact in society and on the environment (from the soil, the water, to the air) but we maintain a disconnect in practice. The Oneness that all spiritual practices emphasize, is missing in our daily lives, especially in the developed world.
One of the best Fintech examples of a company with a Purpose and a long-term commitment to People is M-Pesa. This is a company approaching its sweet 16`s as it was founded in 2007 and is a great inspirational story for more than one reasons:
A. It has lifted people out of povertyB. It has empowered people so that they are no longer unbankedC. It continues to empower existing customers by improving their financial wellnessD. It continues its commitment to reach out to more African countries and to connect cross border
This is tangible impact on society with a huge non-financial component that is not captured today in the financial metrics we use (transaction volumes, credit lines, profit margins, number of customers, revenue growth, etc.)
Society today measures progress again only with `macroeconomic` figures like GDP, CPI, productivity, P/E ratios, unemployment, etc. But this myopic approach has only been the accepted standard since the mid-19th century (The US started this shift and Europe caught up later). Before that, we looked at indicators like literacy, crime, disease, life expectancy, prostitution, etc.
Imagine if we shifted our focus now on measures like Crime (cyber & physical & financial), mental diseases, multi-stakeholder solutions, biodiversity etc. Our perspective of countries and societies that are growing in a sustainable way, would change completely.
A. As I read that ` In 2016, economists from MIT Sloan School and Georgetown University found that the African mobile money service M-Pesa had not only been quickly adopted by most Kenyans over the previous few years, but one impact was that 2 percent of households were lifted out of poverty as a result.` 
It is clear that there will be a significant ripple effect on crime, disease, life expectancy, from the 2% of Kenyan households that have been lifted out of poverty. This is huge and cannot be compared to the impact of Revolut or Wise for example, on lets say 20% of Europeans who benefit from the convenience & cost savings on multi-currency or cross-border transactions (even if this x10 higher % includes immigrants). We need more measures to value what is valuable. We have become accustomed to metrics, so let’s introduce more diversity in the metrics we use and capture the progress of the Ecosystem not just the currency and financial stuff, not just today.
B. In 2006 in Kenya, only 26% of the population had a bank account and by 2021 through M-Pesa, 84% of Kenyans are no longer unbanked. This is a highly successful first Phase of Financial Inclusion.
C. M-Pesa is committed to improving the financial wellness of its customers in any way possible by offering more products and services and linking people to the real economy. Starting from credit products, overdraft capabilities, remittances, and all the way to super app kind of services. Sitoyo Lopokoiyit, MD of M-Pesa, says Financial health has remained relatively low at 20%. By that, he means that only 11% of M-Pesa`s 50m customers have access to credit and their commitment is to improve this a lot. They introduced last year a consumer super app and a business super app for merchants for their 50 million monthly active users. Fuliza is for overdrafts; M-pesa Global for remittances; KCB micro-loans etc. And they will continue.
D. M-Pesa Africa is now in 7 countries and has over 50 million monthly active customers. The business is committed to making the same impact they have had (and continue to improve) in Kenya, in many other African countries. They are pushing tech innovation as they are driven by their Purpose.
When M-Pesa started there was no tech architecture to make it happen. They worked and pushed Huawei to make it happen. Today, M-Pesa technology is enabling mobile money to be processed REAL-TIME. Sitoyo Lopokoiyit says `Even Alipay processes transactions by notification, and the back end happens a few seconds later. M-Pesa is real time.` Their goal is to enable harmonization across the different African markets and that is why continue to improve their tech stack to make this possible cross-border.
A company with a Purpose and a commitment to People, will be Economically Sustainable and its financial health will happen too.
M-Pesa has contributed 49% of Safaricom`s profit before tax (c. $860M) and 36% of Safaricom`s total revenues ($2.5B were the total revenues and M-Pesa`s were $907M). Source
 Excerpt from the Mckinsey article Driven by purpose: 15 years of M-Pesa’s evolution
Suggested related resources:
- When did Money & macroeconomic indicators become the norm?
- `Sustainability is a philosophy, not a marketing tool; it is a purpose not a KPI!` in conversation with Miguel R. Brandao
- A Milestone for M-PESA, by David Birch
Four related books:
- `Beyond Good` by Theo Lau & Bradley Leimer
- `Digital for Good` by Chris Skinner
- `The Sustainable Organisation`by Miguel R. Brandao
- “Money, Real Quick- The story of M-PESA” by Tonny Omwansa & Nicholas Sullivan
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