Mobile money services have transformed the financial landscape in Kenya, becoming an integral part of the economy. With millions of Kenyans relying on mobile money for transactions such as sending and receiving funds, paying bills, and purchasing goods, there is a vast opportunity for entrepreneurs to tap into this market by starting a mobile money agency. If you are looking to start a mobile money agency in Kenya, here’s a comprehensive guide to get you started.
Understanding the Mobile Money Business in Kenya
Kenya is renowned for its mobile money revolution, largely driven by Safaricom’s M-Pesa service. Other telecom companies like Airtel and Telkom have also ventured into mobile money services with Airtel Money and T-Kash, respectively. The role of a mobile money agent is to facilitate transactions such as deposits, withdrawals, and bill payments on behalf of customers. In return, agents earn commissions on every transaction completed through their agency.
Step 1: Choose a Mobile Money Provider
To start a mobile money agency, the first step is selecting the provider you wish to partner with. Safaricom’s M-Pesa is the most popular and widely used service in Kenya, but you could also consider partnering with Airtel Money or Telkom’s T-Kash to cater to diverse clientele. You can choose to offer services from one or more providers, which can increase the number of customers you serve.
Step 2: Meet the Requirements for Registration
Each mobile money provider has specific requirements that you must meet before being registered as an agent. Here are some of the common requirements:
- Business registration: You must have a registered business with a valid business permit. Most providers require that you operate as a limited company for agency registration.
- Location: You need to have a strategic location to operate your mobile money agency. The area should have sufficient foot traffic and ideally be in a location where there is demand for mobile money services.
- Initial float: Providers will require you to have a minimum initial float or capital to start your business. This float is used to process transactions. For instance, Safaricom’s M-Pesa requires a minimum initial float of Ksh 100,000 to Ksh 300,000 depending on the region.
- Identity verification: Agents must provide identification documents such as a national ID, a KRA PIN certificate, and proof of business ownership during the application process.
Step 3: Secure Funding
Starting a mobile money agency requires capital to purchase or rent a shop, equip it with necessary materials, and maintain an adequate float for transactions. The float is essential for ensuring you have enough cash or e-money to serve your customers at any time. Consider approaching banks for business loans, or use your personal savings to cover the initial float and setup costs. Some agents opt for microfinance loans, which are more accessible for small businesses.
Step 4: Find a Suitable Location
Location is a critical factor in the success of a mobile money agency. Look for a high-traffic area such as near a market, bus station, shopping center, or other commercial hubs where people are likely to need mobile money services. The demand for mobile money services is particularly high in areas where there are fewer formal banking institutions, such as rural areas or densely populated urban neighborhoods.
Additionally, ensure that your shop is easily visible and accessible to attract walk-in customers. A secure and safe location is also vital since mobile money agents handle large sums of cash and may be a target for robbery.
Step 5: Set Up the Mobile Money Shop
Once you have a location, setting up your shop involves acquiring the necessary equipment and signage. You will need:
- A branded booth or shop: Mobile money providers often supply agents with branded booths or canopies to help with brand visibility. These make it easy for customers to recognize your agency.
- A mobile phone or POS system: This is necessary for processing transactions. Safaricom, Airtel, and Telkom provide agents with special SIM cards and sometimes point-of-sale (POS) devices for managing transactions.
- A safe or secure storage: Since you will be handling both cash and e-money, ensure that you have a secure safe for storing money.
- Seating for customers: If your agency is located in a high-traffic area, providing seats for customers as they wait to be served can improve customer experience.
Step 6: Register with the Provider
Once your shop is ready, submit your business registration documents, proof of identification, location details, and initial float amount to the mobile money provider. Depending on the provider, this process can take several weeks to complete. Once approved, the provider will supply you with branded signage, a float account, and any necessary equipment (such as SIM cards or POS machines).
Step 7: Hire and Train Employees
If you plan to scale your business or run multiple mobile money shops, you will need to hire staff to operate each location. Employees need to be trustworthy, as they will be handling large sums of money on a daily basis. It’s important to train your staff on the mobile money systems, customer service, fraud detection, and safety measures.
Providers like Safaricom offer training to new agents to ensure they are well-versed in using the mobile money system and providing efficient service to customers. You should also brief your staff on the commissions they will earn from each transaction and motivate them to maintain excellent customer service standards.
Step 8: Manage Your Float Effectively
Effective float management is crucial for the smooth running of your mobile money agency. You need to balance between having enough cash for customer withdrawals and sufficient e-money for deposits. If you run out of float, your business operations will stall, leading to dissatisfied customers. To avoid this, regularly monitor your float levels and top up when necessary. You can also establish a system where you can quickly exchange cash and e-money with other agents or businesses in the area.
Step 9: Promote Your Mobile Money Agency
To grow your business, invest in marketing and promoting your services. While the mobile money provider will give you branded signage, it is up to you to create awareness in your local area. Consider distributing flyers, advertising through social media, or running special promotions like discounted charges for first-time customers. Word-of-mouth referrals are also powerful; if your customers have a positive experience, they are more likely to recommend your agency to others.
Step 10: Monitor and Expand Your Business
Once your mobile money agency is up and running, continuously monitor its performance. Track your daily transactions, commissions earned, and float levels to gauge profitability. Keep an eye on customer feedback and look for ways to improve the services you provide.
As your business grows, consider expanding by opening more branches or adding additional services such as airtime sales, bill payments, and banking agent services. Offering multiple services under one roof can attract more customers and boost your overall revenue.
