Overcoming Barriers to Scale to Reach the Poor (Event Resources)

Buoyed by the success of Safaricom’s M-PESA mobile money service in Kenya, the sister company, Vodacom Tanzania, launched its own service in 2008. Its initial performance was disappointing: the service had only signed up 280,000 users 14 months after launch; whereas the Kenya service had 2.7 million in the same amount of time. Fast forward to 2013: there are now over nine million active users, and transaction volumes are well over US$4 billion per year. Furthermore, mobile money penetration of the mobile subscriber base is now higher in Tanzania than it is in Kenya. Consumers’ transaction costs are also much lower because it’s a more competitive market. What changed? How did the industry scale up so significantly?

Back in Kenya, Kenya Tea Development Agency Holdings Ltd (KTDA) produces some of the finest tea in the world. Starting life as a parastatal in the 1960s, it has weathered decades of change and turmoil. Now, it's the second-largest tea exporter in the world and a profitable company owned by nearly 600,000 smallholder growers. As a result, Kenyan tea smallholders earn over four times more per kilo than Tanzanian smallholders. But why, and how has KTDA succeeded where so many other contract farming initiatives have failed?

In this seminar, Kurt Dassel and Harvey Koh of Monitor Deloitte discussed how solutions like these can be scaled to reduce poverty. The seminar was a ‘sneak peek’ of an upcoming publication based on hundreds of interviews and field research in Asia and Africa.