As often in Africa, Kenya is a “mobile first” nation. The main focus of any tech-centric startup in Africa can often be found to revolve around the growing mobile market. Let us explore why:
Kenya’s mobile market
Kenya is a land of 44.0 million people. Of that population, 30.4 million have access to a mobile connection, as compared to the 16.2 million connected computer users. 99% of these mobile connections are pre-paid, with a mere 300k utilizing post-paid services. An additional 12% of these mobile users, roughly 11.0 million, are smartphone users. The growth of the mobile market has been meteoric, from 10,000 subscribers in 1998 to the current 30 million.
The use of social media has also been exploding with 3.8m Facebook users and growing at an extraordinary rate every year, as the infograph above shows.
Kenyans are clearly enthusiastic about their social media use. A Consumer Insight survey revealed that urban youths spent nearly $250 million on mobile data, with 87% using said data for strictly social media use. It is clear that mobile connectivity is wildly popular here, so much so that Kenyans are willing to pay a high price for their ability to connect with others. Such a statistic would be immensely useful anchoring point for any business looking into entering the Kenyan mobile market.
Given the sometimes chaotic atmosphere in Kenya, Kenyans have managed to master the art of using social media to tackle emergencies. Social media like Facebook have been used in ways that Mark Zuckerberg would probably not have expected when he first created Hot or Not, the people rating site that was Facebook’s precursor.
During times of social upheaval or crises, such as the elections crisis in 2008 or the Westgate attacks in 2013, social media was used to a large extent to help spread messages and warnings. In fact, one of the largest apps in Kenya, Ushahidi, a crowdsourced crisis warning system that we cover later on, grew from one of these catastrophes. In Kenya especially, technology is viewed as a tool to bridge the needs of society. Startups there are more prone to develop tools with the aim of meeting the needs of the people that the government may not have fulfilled.
Kenya’s co-op economy
Unlike many other societies, use of social media is merely a phenomenon of the strong social culture in Kenya. In fact, 42% of the national GDP comes from the co-operative economy. Kenya’s co-op economy is an 8 million strong entity, almost twice Nigeria’s despite having a third of its population. Chamas are the base unit of this sharing economy. Chamas are a group of traditionally women, but now including men, that come together to form a community investment group. These chamas tap and collect money from largely unbanked users to invest in various projects. Investments can range from the typical land investments to ownership of transportation mini-buses.
Far from being a quaint way of life, chamas now number 300 thousand, controlling USD $3.4 billion in assets. It is estimated that 1 in 3 Kenyans are part of a chama. One startup that is attempting to digitize the chama economy is Airtel Chama, a Ugandan startup that has partnered with the Grameen Foundation. Airtel Chama seeks to digitize private saving and provide credit lines to those who may be unable to obtain them from traditional banking industries. With an established mobile base and a population used to mobile money through tools such as Mpesa, Airtel Chama is in a good position to take advantage of the idea of digitizing chamas and bringing them into the digital age.
Any startups looking to get involved in the finance or mobile payment industry would do well to take this phenomenon of the Kenyan economy into account.
Any businesses looking to enter the Kenyan market would do well to check out the above chart. Given our research and perspectives of the current climate in Kenya, there are clearly identifiable areas of potential for tech startups to really shine.