The Good and the Bad of the Mobile World
Kenya began selling government bonds by mobile phones last week. This appears to be the first time a government has offered bonds using mobile phones.
Kenya has already established its position as the leader of mobile money. Now, as they search for new funds for capital improvement, they turned to their citizens. Kenya could have easily gone to one of the international monetary funds or an eager foreign government.
Instead, Kenya decided to use their citizens as a resource and reward them accordingly. Previously, Kenyans needed to invest at least 50,000 shillings (just under $500 USD) and needed a commercial bank account to buy government bonds. Less than 38% of Kenyans have bank accounts.
The new program is called, M-Akiba. Akiba is Kiswahili for “savings.” Investors can use their cell phones to purchase the bonds with as little as 3,000 shillings (just under $30 USD). The bond will earn 10% tax-free interest and be paid directly to their phones. Since the bank rate for savings is 7%, the government expects excitement from the population.
The government desires to have a limited offer of 150 million shillings (just under $1.5 million USD) to test the system. The large screen in the downtown Nairobi treasury showed that 200 investors purchased 600,000 shillings within the first hour of the offering.
For the other side of mobile, we have gambling-more specifically, sports betting. Of course, there are also lotteries, poker and casino games. South Africa, Nigeria and Kenya (in order of revenue size) are witnessing explosive growth in sports gambling.
The South African government statistics show more than half of the adult population are actively involved in gambling, mostly sports betting, on a regular basis.
A recent study found that approximately 60 million Nigerians 18–40 are active in sports betting. They are averaging about 3,000 Naira (around $15 USD) per day.
SportPesa was launched in Kenya in 2013. It has over 1 million registered users. It is the second most-visited web site on mobile phones, only behind Google. It is believed that SportPesa earns at least €40 million in revenue.
A 2014 study on gambling outlook by PricewaterhouseCoopers determined that the combined betting market in South Africa, Nigeria and Kenya will be worth $37 billion USD by 2018.
Soccer betting seems to be the favorite sport. Some countries can field teams able to compete at an International level in rugby and cricket. In those countries, betting on those sports is popular. Many also have horse racing.
Why is Africa ripe for sports betting? Some of the reasons include:
• the proliferation of mobile phones and internet connections
• a massive population of young people with high unemployment
• low entry barrier, bets as low as $0.10 USD with high returns
• a continent of rabid sports fans
• the ease of betting from any location
• few laws are in place to oversee the industry
Mobile phones can enhance the well-being of man or cater to the baser instincts of man. This is the double-edged sword of technology. The user gets to make the choice.
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About the author: Have you ever used a cigarette lighter charger for your cell phone? Have you ever used your cell phone to read a bar code? Have you ever heard of cop cams? Robert Belt introduced those technologies and has been involved in business development/new product introduction for over 30 years. Recent projects have included product introductions in wireless communication/telecom, beauty/fashion industry, automotive industry, consumer electronics and power management technology. Contact information or other snippets can be found on LinkedIn, https://www.linkedin.com/in/rbelt