In the case of m-changa, the equity bank partnership would be more beneficial. Equity bank has a wider spread network of customers across six countries in East Africa. The bank also has a diversity of its customer network as it offers loan from as little as 500shillings an equivalent to 5 dollars. Equity bank has captured 50 % of the Kenyan market and is still growing in other countries like Tanzania. The bank has mobile banks that are in areas with very few people instead of building levees. The partnership allowed customers to transfer money directly from their equity accounts to the m-changa networks. The availability of the banking services to the wider demographic also enhances the customer numbers for m-changa. Equity also plans on introducing mobile transfer services like m-pesa which will have free transaction costs. The m changa will benefit from this project because no transaction money will be incurred when donations are sent and withdrawn from the m-changa accounts.
M-changa is profitable even though it uses m-pesa as a platform for money transfers .M-pesa charges money transfer fees. M- changa charges 4.25% of the money raised by the donations. The app is profitable because the transaction fees that m-pesa charges are incurred by the customers and not m-changa services. The costs are made according to m-pesa rates. The money withdrawn is usually deducted all the fees before getting into the hands of the customers needing donations. The money that m-pesa charges for withdrawing funds and the transfer of funds from the donor is also reduced. Thepartnership between the two makes the transactions cheaper.
If I was m-pesa I would be happy with the entry of m changa in the business platform because they increase transactions using m-pesa. When contributions are made, the charges to send money are deducted by m-pesa and when withdrawing through m-pesa the service is also charged. The platform, therefore, increases the revenues that m-pesa has been earning .M-changa is also able to bridge transactions between equity bank and m-pesa. When a donor sends money to m changa through their equity accounts, the money could be later charged by m-pesa when the contributions are being withdrawn. The platform has given m-pesa a wider market.
The people that enjoy the benefits of m changa are mostly the customers. In the Kenyan spirit of harambee where they fundraise for common projects in the community, raising money was becoming a very tedious task. The application only charges users 4.5 % of the total contributions made and offers 250 short messages so that customers could send out word about the contribution. The nightmare of contributions through different cash platforms has come to an end since the application accepts any kind of payment through their web. International contributions to the application are paid through pay pal which the application can access. The platform ensure that the all the funds donated are accounted for in the bank account. The application has acquired trust among people who need to contribute because they are assured the money will directly go into the bank and not an individuals pocket. Managing of contributions is now an easy task for the customers.
The application should now go into Tanzania in a bid to tap new market and opportunities. Going into Tanzania will be easy for the application to work because both equity and m-pesa services are offered in Tanzania. Equity has a growing customer base of over 85000 customers. Tanzanians are also the second country after Kenya where the people have access to mobile phones. Tanzania is also big on contributing to each others troubles instead of borrowing from banks. The people cannot afford to pay back loans therefore opt for harambee. M-changa could make more profits in the country considering the rates of m pesa transactions are usually reduced for them.
In conclusion, the application is a major success to the east African community especially since most people are not eligible to take up loans from banks, the platform offers an alternative for them. The funds that are contributed are kept safe, and in trustworthy accounts, therefore, the donors are encouraged to contribute to the course due to assurity that their money will be used accordingly. International funds are also easily handled, and the one in need is not required to open PayPal accounts just for such a course. In the future, the application should spread to other African countries beyond East Africa. The application would be embraced by growing economies all over the world that mostly rely on money from the community instead of loans. Non-profit organizations also use the platform to generate funds for community projects.
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