Why boda boda and M-Pesa have a lot in common…

Boda boda is a logical advancement of a bicycle which was a status symbol when we were growing up. Bicycles were rare, and fascinated us with speed.

Then a few years ago, we started fitting bicycles with small engines. That was short lived before motor bikes; now called boda boda shortened to bodas took over. This is a classic case of Joseph Schumpeter’s creative destruction.

I am told the term boda boda came from western Kenya, where motor bike riders called out passengers to Uganda border, “border, border”.

Before bicycles, we had beasts of burden like donkeys. Today, every village and hamlet has boda bodas. Apart from decimating bicycles, boda boda has threatened the end of walking. We used to show off, walking home carrying our school bags after schools closed, now children take bodas.

Motor bikes are filling a market gap. They can access places cars cannot or are not available. Bodas have reduced distance and made us more productive. Unlike matatus that must fill up, there is no waiting time for motor bikes, a great attraction to passengers.

Never mind that in some regions, bodas have led to increase in school dropouts as young men look for quick money and status espoused by owning a motor bike. Enough on boda bodas. M-Pesa has made payment and money transfer easier. Like bodas, it found a gap in the market. It confirmed that money is really a medium of exchange.


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We can do away with queues at construction sites, in schools on opening day and elsewhere. We are now free to do other useful things instead of spending days or hours carrying money around. The interfacing of M-Pesa and banking has made me realise why more bankers will lose their jobs — even if we leave interest rate caps apart.

Upper echelons

Apart from convenience, making us more productive, what else does M-Pesa and bodas share? One, both have benefited the common man more than upper echelons who got alternative means of transport from helicopters to 4W cars and own bank accounts.

Two, it is one of the rare occasions when change trickled up, not down. Boda Bodas were for common man, but Kenyans who seem to be financially well off are now riding motor bikes. They have also seen the benefits of personal boda bodas, like navigating traffic jams.

M-Pesa is now used by the biggest corporations with Paybill numbers and till numbers. Three, both have created more jobs than anyone would have imagined. The government should be thankful to the two. Think of the number of young men and women who have jobs today because of boda boda and M-Pesa.

There are about 130,000 M-Pesa agents according to the latest statics by Safaricom. If each has one employee, that’s more jobs than all the teachers in Kenya! There are over 500,000 boda bodas, another 500,000 jobs. What would all these young men and women be doing?

Four, they provide a spring board into entrepreneurship because of ease of entry. In the West, young men and women start earning their money flipping burgers in fastfood restaurants. Here, the first encounter with entrepreneurship is either through M-Pesa or boda boda.


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Curiously, while M-Pesa kiosks are manned by ladies, boda boda is a man business – talk of division of labour. Before M-Pesa and boda bodas, the preferred entry point into entrepreneurship was hawking.

Less complicated

Five, the two show an idea does not need to be complicated to have a big impact. The engine of a motor bike is two stroke, less complicated than V8. Yet, we may aspire to drive a V8, most will ride on boda boda.

M-Pesa just needs your phone, and it does not need to be smart, a mulika mwizi will do. Yet in school, we try to replace simplicity with complexity. The thinking could be that once we teach you complex things, you can easily deal with simpler things. That does not always happen. Are young men and women not jobless because they are waiting for sophisticated or ‘textbook’ jobs? Think a bit; you use addition and subtraction more than simultaneous equations. You recall them? I’m awakening ghosts…

Six; Incentives and deregulation can work. Reduction in duty on boda bodas spurred their growth. Less regulation of M-Pesa by Central Bank despite dealing with money greatly catalysed its growth. Too much regulation can be counterproductive.

Which sectors need further deregulation to spur their growth? Seven, where would this country be if other sectors behaved like boda boda or M-Pesa? There is easy entry, focus on solving real problems and inclusion of less privileged members of the society.

The GDP growth rate would spike and we could achieve Vision 2030 ahead of the set deadline. Interestingly, politics is the only profession that mimics boda or M-Pesa with ease of entry and exit, if you remove the voter’s eating.


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Suppose medicine, education, law, and professions behaved like M-Pesa or boda boda? There will be an outcry over dilution but more competition will spur innovation and new thinking. Maybe that is what we need to change these professions, the same way M-Pesa has changed financial sector and boda boda or Uber in transport sector.

The writer teaches at the University of Nairobi


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