Home Resources Publications Impacts of ICT on livelihoods: Experiences from a Kenyan rural youth
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Impacts of ICT on livelihoods: Experiences from a Kenyan rural youth

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By Chris Mwangi from Kenya: East African Regional Winner of the CTA ARDYIS Essay contest

Currently, Kenya has four active mobile operators. The technology is the prime mode of communication in the country. Since its introduction, the industry has picked up quickly and remarkably, covering most of the geographical areas of the country and has contributed greatly to local peoples’ livelihoods.

Chris Mwangi



Safaricom is the largest mobile phone operator, and among its range of services is the mobile phone money transfer system called “M-Pesa” which literally means “Mobile Money”. It allows M-Pesa users to store money within their mobile phones in an e-account and deposit or withdraw the money in hard currency at any one of its numerous M-Pesa agents located throughout the country. As of January, 2010 Safaricom had over 9 million people registered with M-Pesa (Plyler and Haas, 2010). According to these authors the mobile phone person-to-person monthly transfer money was over Kshs. 26 billion by December 2009. The number of agents has increased over time both in the urban and rural areas creating job opportunities, especially for the youth.

Safaricom has a range of other services such as “M-Kesho” and “411 Get it”. M-Kesho is an electronic savings account introduced by a local bank called Equity bank and Safaricom where customers can transfer money from their M-Pesa accounts and into the M-Kesho accounts as savings. In addition, any amount of money in an M-Kesho account beginning with as little as 1 shilling earns an interest. Through the M-Kesho service, banking of money is easy without the need of going to the bank. Customers can either withdraw money from their Equity Bank accounts to their M-Pesa accounts or deposit through their M-Pesa accounts to their M-Kesho Bank accounts. With this account, a farmer is able to apply for an emergency loan to support his short-term financial needs.

The “411 Get it” Short Message Service (SMS) is a joint venture between Safaricom and the Kenya Agricultural Commodity Exchange (KACE), launched in July, 2007. It facilitates linkage between sellers and buyers of agricultural commodities. Through this service, farmers get competitive and transparent market prices. KACE uses SMS to disseminate market information via mobile phones. KACE first collects and processes information from several markets in Kenya and transmits it via a Global System for Mobile Communications (GSM) modem to Safaricom. The subscribers of Safaricom then access KACE market information using mobile phones on “411 Get it” SMS services. Market information is also accessed through voice response by dialing a KACE hotline number, using a mobile phone. This helps farmers get a competitive range of market prices for their produce.

Safaricom has also revolutionized accessibility of information in the rural areas through the use of broadband modems. In this context it is possible for farmers that are computer literate to access relevant information on sound farming practices via internet. Notably, “Organic Farmer” an agricultural e-bulletin published by the International Centre for Insects, Pests and Ecology (ICIPE), educates on organic farming and provides a platform for sharing of information on sound farming practices among the youth. The users are provided with free user accounts.

In Kenya motor cycles have become quite affordable, since they are excluded from custom duty. Thus their use has increased tremendously, especially in the rural areas. This coincides with the high use of the mobile phones among the rural dwellers. Therefore, a customer usually calls the driver on his mobile phone to be picked at any location. The affordability of this mode of transport, coupled by the wide coverage of the mobile network has opened the rural areas to a great extent. This is a major deterrent to the youth migrating to the urban areas, and more so leads to creation of alternative livelihoods to the unemployed youth in rural areas.

Kamau is a young Kenyan in his late-twenties, living in a local farming community in the Central Rift Valley region. He is subscribed to Safaricom. Kamau became one of the Safaricom agents and setup an M-Pesa kiosk (small shop) in his rural home area in mid 2007. Being the only agent by then, his business flourished steadily creating a solid client base that he has sustained even with emergence of new similar businesses in the neighborhood. Kamau has been able to create trust among his customers. Due to the high number of transactions, there has been an increased flow and ease of access to money within the community. This has led to improved livelihoods in his local home area. The solid customer relationship that Kamau has with his customers has contributed to the success of his business.

In the beginning of 2008, the area experienced drought which led to crop failure. Since agriculture is the mainstay for Kamau’s community, crops are the major source of income. Following the crop failure, Kamau noticed increased flow of money through his M-Pesa business to his customers. Most of this money was reported to be remittances from relatives in urban areas into the rural area. Therefore, according to Kamau this service has strengthened friendships and social interactions in the community. For Kamau, the mobile phone service has enabled him to deal with the lean times when he realizes low operating capital. This is because he usually calls his friends and borrows some money that is sent to his M-Pesa account.

From the revenue generated from the M-Pesa business, Kamau has managed to venture into farming. He was able to rent a number of agricultural fields. He planted potatoes using methods he got from the e-bulletin of the “Organic Farmer”, accessed using his General packet radio service (GPRS)-enabled mobile phone. He also planted maize and beans. With the good rains experienced in 2009/2010, the fields produced substantial amount of maize, beans and potatoes. For many years the community where Kamau lives had the problem of marketing agricultural produce. Markets were mainly run by middlemen who offered low prices. Also, Kamau had no skills for negotiating on market prices. With the improvements in accessibility of market information through KACE, he has been able to market his commodities effectively. KACE offered him a competitive range of prices and therefore he was able to identify a favorable market. He invested the farming proceeds into his M-Kesho business. His fellow community members also make bank deposits of their crop sales via the M-Kesho at Kamau’s kiosk.

Kamau’s M-Pesa shop has simplified money access and made more customers have money at their disposal and are spending it locally instead of going to the urban markets. This has improved the economy of the rural area by minimizing rural-urban movements. Moreover, the service has played a great role in increasing availability of household consumables and farm inputs. It has also made smaller businesses save on transport costs. Agro-vet traders and other sellers make payments of their business orders via M-Pesa to their suppliers in town. The savings made on their transport costs enable them acquire more stock for their businesses. This in turn means that the entire community benefits from the goods available.

Mr. Kamau’s business has also benefited from transactions made by the farm owners residing in the nearby town of Nakuru, who do not have to commute to the Kamau’s village to pay their casual labourers. Thus the workers receive their daily wages through Mr. Kamau’s M-Pesa kiosk. Moreover, the urban dwellers are able to plant on time since they are now in a position to send money to their farming supervisors for land preparation and purchase of fertilizers and seeds without physically going to the village.  However during the planting and weeding season, Kamau has low operating capital due to increased M-Pesa withdrawals.  To counter this problem, Kamau took a soft loan from Equity bank to buy a motorcycle. The motorcycle enables him to rush quickly to town to top up his M-Pesa account at the bank. The motorcycle also helps Kamau to cope with the poor road network which makes it difficult to get alternative means of transport to town in time of need.

Kamau later turned to the motor cycle transportation business which is dominated by the youth. He hired a colleague to ferry people through an arrangement where they share the profits on the trips made. Many people like his services due to his reliability and commuter charges.

Kamau’s experiences and business acumen clearly show the important linkages and synergies that exist between the development of ICTs and activities that can support the livelihoods of rural youth for agricultural and rural development.


Reference

Plyler, G.  & Haas, S (2010). Financial assessment http://www.fsassessment.umd.edu/.pdf Accessed online on 3rd August, 2010

 

More information:
- Essay contest announcement document
- Information on finalists
- Announcement of winners following oral presentations in South Africa
- Other best essays and documents

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DISCLAIMER

Best essays of the CTA ARDYIS essay contest have been selected by an independent panel of judges. The views expressed in this information product are those of the authors.

Last modified on Monday, 07 February 2011 11:13