NEW FINANCIAL TECHNOLOGIES AND 4TH INDUSTRIAL REVOLUTION IN THE THIRD WORLD (THE EXAMPLE OF CUSTOMER CARE OF M-PESA, KENYA)

Abstract

A well-functioning financial sector in developing countries is extremely important for economic development. This requires local institutions, which originally were often state-controlled, but gradually non-state actors conquered the financial market. Recently the growing importance of alternative forms of finance in many African countries has become remarkable. Although often created by donors, their role changed when financial inclusion, economic liberalisation and decentralization became more important. Microfinance institutions started to compete with banks by also offering a broad range of services (loans, savings, transfers, accounts, insurance). This is a frugal innovation (less regulated financial institutions compete with regulated ones at a lower cost). Meanwhile, mobile payment revolution has been taking place in Africa and other developing regions. This article analyzes these developments and suggests that these new financial technologies contribute substantially to the 4th industrial revolution in the third world countries. Financial resources that become more available replaces development initiatives and allows developing countries finance industrial and agricultural revolutions with local money. We will deal in detail with one example – the role of M-Pesa in helping people to be 'financially included' and trying to learn from their experience with customer satisfaction for other countries.