Science, Finance and Innovation

Mobile money and the business economy in Kenya

4 min


Laura Nelima Barasa

In the wake of Covid-19, Kenya’s government turned to mobile money as a measure to help curb the spread of the virus. Encouraging more transactions via mobile phones provided a way to diminish face-to-face interactions and the exchange of cash. As this column reports, businesses have increasingly relied on this financial innovation to stay afloat under the national lockdown and curfew. Indeed, their continuity often depends on the adoption of mobile-based transactions and customer relationship management.

The mobile money revolution has transformed how businesses interact with customers in Kenya. When the technology was first introduced in 2007, it was simply a person-to-person money transfer service that met the needs of the many people without bank accounts. But over time, mobile money services have evolved to include person-to-business transactions. Now, the ubiquity of mobile phones and the high speed of transactions make it cost-effective for businesses to tap into a wider market.

In the recent past, businesses embraced the use of mobile money because it supports functions such as sales force management and customer relationship management. This has presented an empty market space to be filled by innovative technology-based firms providing a seamless interface between businesses and customers and in particular, mobile customer relationship management (mCRM) software.

Technology-based firms have unlimited opportunities to provide innovative business solutions that are suited to the business operational environment including the existing mobile infrastructure, mobile customer base, and mobile phone use culture.

The high cost of acquiring customer feedback has generally been a challenge in Africa. But mCRM software provides a considerably cheaper alternative for collecting customer feedback compared with traditional customer feedback tools such as feedback boxes, telephone surveys, and online surveys.

The technology also provides businesses with the tools to engage in meaningful customer-focused strategies that enhance business performance. For example, businesses benefit from rich customer data and are able to provide solutions and make appropriate value propositions. Businesses can therefore build competitive advantage using mCRM platforms to understand their customers better.

In 2015, Ajua Limited – a leading software services start-up based in Kenya­ – began offering a mobile money-based CRM platform to provide businesses with customer feedback in real time. After paying for goods or services using mobile money, the customer immediately receives a short message service (SMS) customer feedback survey. In this way, businesses gather customer feedback in real time. This interaction is fast and therefore likely to offer businesses with insights on how to improve the customer journey.

The company has since grown to become Africa’s first ‘integrated customer experience company’, giving businesses of different sizes in Africa access to real-time customer insights to drive strategic decisions based on data. While this offers value to businesses, customers are also empowered, especially when their voice is heard and their insights are taken into account. The mCRM platform is useful for generating customer experience metrics, including the Net Promoter Score (NPS), a globally recognized metric that measures customer loyalty and satisfaction. This score can be used for understanding customers by monitoring customer satisfaction and sustaining long-term profitable relationships.

Based on the findings of a study conducted under the European Investment Bank-Global Development Network Program in Applied Development Finance, the adoption of mCRM may improve business performance because it reinforces customers’ journey in a cost-effective manner. It eases the speed of interaction between the sales force and the customer. It also makes it simpler for businesses to administer SMS-based customer feedback surveys at the point-of-sale. This is crucial for measuring customer satisfaction.

Despite the high penetration of mobile phones and mobile money in Kenya, only a small number of firms have embraced mCRM. Face-to-face CRM still seems to be preferred over mCRM. In addition, there is little awareness of customer satisfaction metrics. This presents an opportunity for technology-based businesses offering mCRM solutions in Kenya.

Mobile money transfer, Nairobi, 2021

The pandemic and business survival

Mobile money has yielded varied benefits that were largely unforeseen at its inception. Businesses have increasingly relied on mobile-based transactions to stay afloat under the national lockdown and curfew. It is almost certain that mobile money will continue to provide business solutions in unexpected ways as observed during the pandemic.

Considering that a vast majority of Kenya’s population uses mobile money for business transactions, technology-based businesses can thrive by designing products that enhance business performance. Indeed, the pandemic has uncovered the fact that businesses must rely on technology for survival. More specifically, businesses in Kenya will be better positioned for success by integrating mobile-based solutions into all their functions.

What next?

While businesses were previously preoccupied with the use of mobile services for sales and marketing, the use of mCRM is gaining considerable attention. The potential benefits that mobile money confers on the economy cannot be overstated. This is especially important in the context of Africa as the continent pursues the common goal of digital industrialization amid mounting socio-economic challenges.


Laura Nelima Barasa
lecturer, University of Nairobi