First of all, this is an entirely cash-based society. Credit cards are slowly starting to show up, but still very rarely. So in order to pay any bill, I needed to find cash. That meant finding a working ATM, which used to be quite a challenge. ATM's are more plentiful now, but almost everything still requires cash.
Electricity comes through the LUKU box in our house. Electricity is pre-paid; you get a receipt with a number on it, which you enter into the LUKU box, which recharges your house with electricity. In order to buy LUKU, I used to have to drive to find a LUKU shop with a working computer. Sometimes that would require two or three stops.
Paying for internet required a 40-minute drive into town. Paying the water bill meant a drive to the water company. Getting airtime on my phone meant picking up phone vouchers at a shop. Sometimes I felt like my part-time job was paying bills.
I wasn't sure what it would take for this to change. Most Tanzanians don't have a bank account, so the idea of a checking account or credit cards wasn't going to take off any time soon. The only postal system is through post office boxes, and again, most Tanzanians don't have one. Thus, the traditional western system of bills in the mail would never be an option. The modern western system of on-line banking is generations away.
So without bank accounts, mailboxes, or credit cards, how would the bill-paying system change? There is, however, one thing that almost every single Tanzanian does possess--a cell phone. You can go out into the deepest, remotest reaches of Tanzania (and most of Africa), and find cell phones. You'll see the Masai herdsman out in the middle of nowhere with his cattle--and his cell phone. Even in villages with no electricity, you'll see shop keepers with a generator or a solar battery, making a business out of charging people's phones.
So some brilliant people--I don't know who--established a method of cell phone banking. Every cell phone in Tanzania--and most other African countries--is connected to a sort of virtual bank account. It's not really a bank account--there's no central institution and no interest accruing. But I can go to any "Wakala" (Agency)--and they are everywhere--and deposit cash onto the account connected to my phone number. For my phone service, this is called M-Pesa.
This system, which has been around for a few years but has become increasingly easier and more accessible, has changed everything.
Last week, I received my water bill as a text message. I then went into my M-Pesa account and paid the bill through my phone. I can purchase LUKU through M-Pesa. I can pay for internet through M-Pesa. I have sent money to local newspapers to run advertisements for our training program. I have paid a hotel bill and an airplane ticket. I have sent money to an electrician. Last week, I was collecting money for a group birthday gift, and a bunch of people sent me money through M-Pesa.
And let me get one thing straight. I have a completely dumb, $25 Nokia phone. Smart phones are plentiful here; I just have no desire for one. An American might pay for his water bill on his phone as well--but in reality, he is not using his phone--he is using the internet. This is not on-line banking; it's an entirely different system that is totally based on the cell phone.
It's absolutely brilliant. This is the kind of innovation that is changing the developing world. Pay attention.