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Co-Founders Of Mo De, A Mobile Micro Credit Company From Kenya, Wins The IBM SmartCamp

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I am not one to write about award recipients but I find it pretty awesome that the founders of Mo De, a mobile micro finance company from Kenya, won the IBM SmartCamp entrepreneur of the year award this week in New York.

Julian Kyula and Josphat K. Kinyua started Mo De to fill a need that impacts the millions of African customers who buy mobile service by the minute. Often, people will run out of minutes at night or over the weekend and can’t refill until the local telecom company reopens for business.

Mo De loans minutes to the customer on behalf of the telecommunications provider. It then charges the customer a small service fee for the loan. To get the minutes, the customer sends a short code asking for minutes. Mo-De, which integrates its technology into its telco partners, then facilitates the transaction. Customers need to be qualified to get the loan. For airtel in Kenya, a service fee equivalent to 10 percent of the amount borrowed is applied to the subscriber for any airtime advanced to him. This money will be recovered the next time the subscriber reloads minutes.

Mo De says it has facilitated more than 200 million transactions in the five African countries where it has operations: Kenya, Cameroon, Nigeria, Uganda and Zambia. That has helped mobile network providers such as airtel and MTN to increase both subscriber revenues and talk time on their networks. Kinyua said Mo De is about to enter another five countries as demand for its services continues to grow.

The founders say what they offer can even be considered nano-finance as many of the loans are for $20 or less.

Constellation Research Founder Ray Wang attended the IBM SmartCamp. He said Mo De represents a disruption in how mobile devices are the predominant computing device in emerging markets. Wang says it is powerful in a few ways: The middleman is removed from the transaction; it allows for fast and unfettered transactions; and it represents the intersection of commerce and payment options.

IBM SmartCamp shows how a large enterprise company can work with startups to mutual benefit. IBM serves as that pillar partner for Mo De as it expands to different countries where no one really knows who they are. But they do know IBM. For IBM, it can partner with a startup that has technology it will most likely never develop, earning it new opportunities it may not have ordinarily had.