NEW FINANCIAL TECHNOLOGIES AND 4TH INDUSTRIAL REVOLUTION IN THE THIRD WORLD (THE EXAMPLE OF CUSTOMER CARE OF M-PESA, KENYA)

  • Lukas Wellen Erasmus University in Rotterdam
  • Meine Pieter van Dijk Erasmus University, Rotterdam
Keywords: forms of financing; customer satisfaction; frugal innovation; Kenya

Abstract

A well-functioning financial sector in developing countries is extremely important for economic development. This requires local institutions, which originally were often state-controlled, but gradually non-state actors conquered the financial market. Recently the growing importance of alternative forms of finance in many African countries has become remarkable. Although often created by donors, their role changed when financial inclusion, economic liberalisation and decentralization became more important. Microfinance institutions started to compete with banks by also offering a broad range of services (loans, savings, transfers, accounts, insurance). This is a frugal innovation (less regulated financial institutions compete with regulated ones at a lower cost). Meanwhile, mobile payment revolution has been taking place in Africa and other developing regions. This article analyzes these developments and suggests that these new financial technologies contribute substantially to the 4th industrial revolution in the third world countries. Financial resources that become more available replaces development initiatives and allows developing countries finance industrial and agricultural revolutions with local money. We will deal in detail with one example – the role of M-Pesa in helping people to be 'financially included' and trying to learn from their experience with customer satisfaction for other countries.

Author Biographies

Lukas Wellen, Erasmus University in Rotterdam

holds a MA in General Economics from Vrije Universiteit in the Netherlands.

He is responsible for the effective implementation of the EduFinance Technical Assistance Facility (ETAF), which, amongst other things, engages MFIs to develop, launch, and improve financial products in the education finance space across the global footprint of MFI partners.

Lukas has worked with over 40 MFIs in more than 30 countries worldwide as a consultant or manager in his career. This extensive list includes work for National and Supranational organisations including government ministries in Germany, Norway, the Netherlands, the World Bank, IFC, USAID, KfW, FMO and EBRD. Lukas is a founder of Musoni, a mobile payment MFI in Kenya, and The Source Company, consulting on governances, structuring, funding and management of TA funds.

Meine Pieter van Dijk, Erasmus University, Rotterdam

PhD (Economics) from  Free University, Amsterdam, the Netherlands

He  is an economist and professor of Water Services Management at UNESCO-IHE Institute for Water Education in Delft, professor of Entrepreneurship at MSM and professor of Urban Management at the Institute of Social Studies and at the Economic Faculty of the Erasmus University in Rotterdam (EUR), all in the Netherlands.

He is member of the research schools CERES and SENSE. He worked on and in developing countries since 1973 and as a consultant for NGOs, the Asian Development Bank, the Inter-American Development Bank, the World Bank, different bilateral donors and UN agencies.

He recently edited a volume of the International Journal of Water on the role of the private sector in water and sanitation. His recent books are on Managing cities in Ethiopia (eds, with J. Fransen, Delft: Eburon, 2008), Managing cities in developing countries, the theory and practice of urban management (2006, Cheltenham: Edgar Elgar) and with C. Sijbesma (eds., 2006): Water in India (New Delhi: Manohar).

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Published
2018-03-30
How to Cite
Wellen, L., & van Dijk, M. (2018). NEW FINANCIAL TECHNOLOGIES AND 4TH INDUSTRIAL REVOLUTION IN THE THIRD WORLD (THE EXAMPLE OF CUSTOMER CARE OF M-PESA, KENYA). The EUrASEANs: Journal on Global Socio-Economic Dynamics, (2(9), 07-12. https://doi.org/10.35678/2539-5645.2(9).2018.07-12