Dr Ndemo, thanks for that - very useful. For Co-op Bank, this makes a lot of sense and if they work through the existing co-operative movement, they have a lot more control and closer integration anyway. Same with the other two banks that you cite: if they already have an extensive rural network, then it's easier to extend it further. Call it risk aversion - or just call it prudential growth: I have repeatedly heard in the past few months that the number of fraud cases in the banking system has risen quite significantly. I, for one, would like my bank to be very prudent about who and how they grant access to their core banking system so that my accounts are protected from unauthorised access. This reversal of the roll-back of the branch system doesn't strike me as so incomprehensible, by the way. I think there are two factors at play: the transition from the Moi administration, and technology: - in the last years of the Moi administration, the economy became ever more sclerotic, and I guess (although I'd have to look it up) that the state borrowed more (given that donors were moe reluctant to back a corrupt regime, and tax revenues were held back by a stagnant economy). For banks, it's easier and cheaper to lend to government than deal with small retail clients. Makes business sense. Since 2004, GDP growth has accelerated, and there has been some fiscal consolidation. Both a good incentive to reconsider the lower end of the retail market. - Technology has made it a lot easier to administer smaller accounts, and mobile money has certainly played its role. Lending through an agency network: I don't think it will necessarily be that easy because a bank may make the disbursement through an agent, or mobile money account, but still needs to do the whole credit evaluation - i.e check an individual's creditworthiness and/or have securities and/or require employment status and payslips and/or require guarantors etc. Again, this is to protect people who entrust the lending bank with thei money, and it's important not to confuse these principles of sound lending and banking with the technology through which the loan is paid out and paid back. Any bank that doesn't do this should have the CBK on its bank instantly, and rightfully so. SIM card registration: I've bored everyone sufficiently with my opinion on this. The existing data base is not accurate, I am not sure what provisions have been taken to update subscriber figures regularly, and I have spoken to several people recently who have bought SIM cards and there was no mention of registration. On 7 December 2010 13:10, <[email protected]> wrote:

Andrea, Just talked to the Govenor on this issue. He says they have licensed 4,000 and are processing many more. Some banks of course are more risk averse than others. The Co-op Bank I know are working to develop their own DVs through their rural cooperative movement. They only need us to provide connectivity.

Two other banks with extensive rural network are also developing their rural model. Some 10 years Banksd ran away from rural Kenya citing cost in running "small" accounts. Today they are trooping back. I cannot figure out this but I suspect Prahalad's work on the bottom of the pyramid. I am aware some banks may leverage on mobile coverage to offer innovative products. Lending of less than 10,000 will common within the next few months.

From the recent UPU meet, it is made mandatory for each country to start working on the street addressing or GPS locationing systems. Once this is done the Banks can safely lend. This what Hernando de Soto's Mystry of Capital labours to explain. A nother book that should be a mandatory read for all Kenyans. And lastly you see why every mobile phone user needs to register.

Ndemo.

Sent from my BlackBerry®

-----Original Message----- From: Andrea Bohnstedt <[email protected]> Sender: [email protected] Date: Tue, 7 Dec 2010 10:41:06 To: <[email protected]> Cc: KICTAnet ICT Policy Discussions<[email protected]> Subject: Re: [kictanet] Update on Pasha Centres

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-- Andrea Bohnstedt <http://ke.linkedin.com/in/andreabohnstedt> Publisher +254 720 960 322 www.ratio-magazine.com Find/post East Africa careers<http://www.ratio-magazine.com/careers/index.php> Find/post conferences, workshops, trainings, other business events<http://www.ratio-magazine.com/businessevents/index.php>

Bwana PS, We are going to have presentations and a Panel Discussion on agency banking in our Banking & Mobile Money Conference over 2-3 March, with CBK participation, as commercial banks have expressed their concern about lack of clarity in the regulations. So we hope this will be a useful platform to develop clearer understanding and encourage increased take-up. Presentation proposals would be welcome. Asante, Sean Moroney Chairman AITEC Africa [email protected] UK Tel: +44(0)1480-880774 UK Fax: +44(0)1480-880765 UK Mobile: +44(0)7973-499224 Kenya Mobile: +254(0)721-845674 Mozambique Mobile: +258-82-820880583 Nigeria Mobile: +234(0)802-0571766 SA Mobile: +27(0)724-577887 Skype: seanmoroney www.aitecafrica.com From: [email protected] [mailto:[email protected]] On Behalf Of [email protected] Sent: 07 December 2010 19:43 To: [email protected] Cc: KICTAnet ICT Policy Discussions; [email protected] Subject: Re: [kictanet] Update on Pasha Centres Andrea, Great perspective. It needs a white paper or a theisis of some sort. That way we understand our environment better. May be we need to ask listers if we develop some collaboration to do a comprehensive research on the Banks change of policy toward small accounts. On Registration of sim cards, we have not slept. We shall be back more stronger with the necessary legal framework. It is actually beneficial to all of us to register. The interest rates we pay are higher because we not easily traceable. Regards Ndemo. Sent from my BlackBerryR _____ From: Andrea Bohnstedt <[email protected]> Date: Tue, 7 Dec 2010 14:53:34 +0300 To: <[email protected]> Cc: <[email protected]>; KICTAnet ICT Policy Discussions<[email protected]> Subject: Re: [kictanet] Update on Pasha Centres Dr Ndemo, thanks for that - very useful. For Co-op Bank, this makes a lot of sense and if they work through the existing co-operative movement, they have a lot more control and closer integration anyway. Same with the other two banks that you cite: if they already have an extensive rural network, then it's easier to extend it further. Call it risk aversion - or just call it prudential growth: I have repeatedly heard in the past few months that the number of fraud cases in the banking system has risen quite significantly. I, for one, would like my bank to be very prudent about who and how they grant access to their core banking system so that my accounts are protected from unauthorised access. This reversal of the roll-back of the branch system doesn't strike me as so incomprehensible, by the way. I think there are two factors at play: the transition from the Moi administration, and technology: * in the last years of the Moi administration, the economy became ever more sclerotic, and I guess (although I'd have to look it up) that the state borrowed more (given that donors were moe reluctant to back a corrupt regime, and tax revenues were held back by a stagnant economy). For banks, it's easier and cheaper to lend to government than deal with small retail clients. Makes business sense. Since 2004, GDP growth has accelerated, and there has been some fiscal consolidation. Both a good incentive to reconsider the lower end of the retail market. * Technology has made it a lot easier to administer smaller accounts, and mobile money has certainly played its role. Lending through an agency network: I don't think it will necessarily be that easy because a bank may make the disbursement through an agent, or mobile money account, but still needs to do the whole credit evaluation - i.e check an individual's creditworthiness and/or have securities and/or require employment status and payslips and/or require guarantors etc. Again, this is to protect people who entrust the lending bank with thei money, and it's important not to confuse these principles of sound lending and banking with the technology through which the loan is paid out and paid back. Any bank that doesn't do this should have the CBK on its bank instantly, and rightfully so. SIM card registration: I've bored everyone sufficiently with my opinion on this. The existing data base is not accurate, I am not sure what provisions have been taken to update subscriber figures regularly, and I have spoken to several people recently who have bought SIM cards and there was no mention of registration. On 7 December 2010 13:10, <[email protected]> wrote: Andrea, Just talked to the Govenor on this issue. He says they have licensed 4,000 and are processing many more. Some banks of course are more risk averse than others. The Co-op Bank I know are working to develop their own DVs through their rural cooperative movement. They only need us to provide connectivity. Two other banks with extensive rural network are also developing their rural model. Some 10 years Banksd ran away from rural Kenya citing cost in running "small" accounts. Today they are trooping back. I cannot figure out this but I suspect Prahalad's work on the bottom of the pyramid. I am aware some banks may leverage on mobile coverage to offer innovative products. Lending of less than 10,000 will common within the next few months.

From the recent UPU meet, it is made mandatory for each country to start working on the street addressing or GPS locationing systems. Once this is done the Banks can safely lend. This what Hernando de Soto's Mystry of Capital labours to explain. A nother book that should be a mandatory read for all Kenyans. And lastly you see why every mobile phone user needs to register.

Ndemo. Sent from my BlackBerryR -----Original Message----- From: Andrea Bohnstedt <[email protected]> Sender: [email protected] Date: Tue, 7 Dec 2010 10:41:06 To: <[email protected]> Cc: KICTAnet ICT Policy Discussions<[email protected]> Subject: Re: [kictanet] Update on Pasha Centres _______________________________________________ kictanet mailing list [email protected] http://lists.kictanet.or.ke/mailman/listinfo/kictanet This message was sent to: [email protected] Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/bitange%40jambo.co.ke -- <http://ke.linkedin.com/in/andreabohnstedt> Andrea Bohnstedt Publisher +254 720 960 322 www.ratio-magazine.com <http://www.ratio-magazine.com/careers/index.php> Find/post East Africa careers <http://www.ratio-magazine.com/businessevents/index.php> Find/post conferences, workshops, trainings, other business events -------------------------------------------------- This message has been scanned for viruses and dangerous content by <http://www.mail.jambo.co.ke/> Jambo MailScanner, and is believed to be clean. -------------------------------------------------- "easy access to the world"

Edith and listers Thanks for your comments. The debate on Pasha has been a very interesting one. It is not about whether or not to provide access to grassroots communities. That is a clearly stated government policy, and something we all agree on. Indeed the new constitution mandates this. The Pasha debate within the Kenya ICT Board has been about HOW to create a financially and socially sustainable operating model. The Kenya ICT Board has been around the country and provided training to would be Pasha managers, some of who are already in business. We have reviewed their business plans. Some make sense and some don't. That is just the way it is. One would expect varying degrees of maturity as the Pasha Centres get deployed over the next few years. Our studies have indicate that for many rural areas, people cant make money providing just connectivity. And providing internet access without other services would not meet community needs anyway. They have to have a business that meets community information and service needs- in a sense a bouquet of services. However, our modelling has proven that even in the most remote areas, there is a business case for content services trade and connectivity and we are therefore confident that if entrepreneurs in those areas were provided with assistance. We felt that this modelling reduced the risk of failure in the implementation of the same. Indeed, the cases of failure of these types of projects elsewhere enriched our experiences. As an illustration, If you charge Kshs 1 per minute (which is the current rate countrywide in cybers) for even ten straight hours a day that would earn you Kshs 600. per day. If you had borrowed to purchase that computer and printer and fax machine plus paid for the software etc the business cash flows must pay for that. What businesses can charge for connectivity is reducing as wholesale prices fall further in line with government policy of increasing access. The issue for the ICT Board has been to ensure that this project creates entrepreneurs in rural communities who can leverage internet access as part of their business offering. In an earlier email I detail areas we have looked at. The reality on the ground is that there are many cyber cafes in towns across Kenya where one can decent internet access. The improved connectivity situation has made it easier for many to guarantee better services. Indeed most Kenyans across connect to the internet will get access via a mobile modem and mostly one bought from Safaricom. Many cybers run on mobile modems. We had substantial delays internally in crafting this strategy and getting the requisite approvals from the World Bank on various aspects of this project. While this happened we were lucky to partner with CISCO, IBM global teams to learn from their experiences around the world on this. We have received many proposals from various bodies to partner on this project which we welcome. As an example in the early days we even explored turning each PASHA center into an IT training center. This decision would have to be made by the entrepreneur being guided by what can sustain his business. Initially many thought that the government was going to build physical Pasha Centres from ground up. Now many are clearer that the model is about empowering communities through their own entrepreneurs. The Kenya ICT Board will facilitate as much government content and providing training, technical support and and other capacity support within the defined scope as the Pasha Manager needs. Indeed some may end providing digitization and other services to their local counties. I hope this sheds some more light. regards Paul Kukubo Chief Executive Officer, Kenya ICT Board PO Box 27150 - 00100 Nairobi, Kenya 12th Floor, Teleposta Towers Koinange Street Tel +254 20 2089061, +254 20 2211960 Fax: +254 20 2211962 website: www.ict.go.ke local content project: www.tandaa.co.ke, www.facebook.com/tandaakenya twitter:@tandaaKENYA BPO Project: www. doitinkenya.co.ke Digital Villages Project: www.pasha.co.ke personal contacts _______________ Cell: + 254 717 180001 skype: kukubopaul googletalk: pkukubo personal blog: www.paulkukubo.co.ke personal twitter: @pkukubo ____________________ Vision: Kenya becomes a top ten global ICT hub Mission: To champion and actively enable Kenya to adopt and exploit ICT, through promotion of partnerships, investments and infrastructure growth for socio economic enrichment On Tue, Dec 7, 2010 at 6:47 PM, Edith Adera <[email protected]> wrote:

Paul,

I'm glad that we are moving towards realizing this dream. We need to move from "will do" mode to "have done" mode!

We look forward to the launch and the 90 days after to see this realized (I trust we will get frequent updates).

Just some quick observations:-

*You mention that KICTB will "provide a technical consultant to support the technical set up and management" and "provide support for Management of the Pasha Community portal to allow collaboration and knowledge sharing among Pasha managers" - here's is where I would suggest strong bottom-up empowerment of communities to technically manage their own networks and also to develop and manage local content that can feed into the larger portal following agreed standards. Uganda's RCDF got consultants to develop district portals - which looked very beautiful, but alas they were soon "stale sites" as they were not updated frequently...there was no community buy-in...a bottom-up approach to empowering people to develop and own their content! This was a big lesson we learnt with the RCDF.

*other services could include interactive community-radio hooked to the network and local VOIP services.

Finally, why not consider a range of banks? and MFIs? why Family Bank?

Edith

*________________ *

*Edith Ofwona Adera *

Senior Program Specialist

ICT4D Program and Climate Change & Water Program

International Development Research Centre | Centre de recherches pour le développement international

Regional Office for Eastern and Southern Africa

Tel: +254202713160 | Fax/Téléc: +254202711063 | Skype: edithadera

[email protected] | www.idrc.ca | www.crdi.ca

------------------------------ *From:* [email protected][kictanet-bounces+eadera= [email protected]] On Behalf Of Paul Kukubo [ [email protected]] *Sent:* 07 December 2010 10:25 *To:* Edith Adera

*Cc:* KICTAnet ICT Policy Discussions *Subject:* [kictanet] Update on Pasha Centres

Listers

Ø Kenya ICT Board will facilitate the establishment of digital access centers, to be known as Pasha Centres across the country.

Ø Facilitation will take the following form

o An Entrepreneurs will obtain a loan from Family Bank for up to a maximum of Kshs 3M to set-up or expand and existing digital access centre.

o Kenya ICT Board will provide a technical consultant to support the technical set up and management.

o Branding and communication support in order to manage the Pasha Brand and drive consumer interest and usage.

o Management of the Pasha Community portal to allow collaboration and knowledge sharing among Pasha managers.

o Continuous Training and skills development for Pasha Owners.

o Liaison with public sector and local and international content providers who may want to access the public through the Pasha network.

Ø *Pasha Centres will provide a variety of services that could include the following:*

o Internet access, including serving as wifi hotspot providers for the area.

o Training and educational material provision

o Mobile and agency banking

o Other retail services

o Money transfer services

o Government services

o Jobs bureau

o Supply chain facilitation including assisting retailers and wholesalers with IT needs

o Technology support centres for the region

o Tourism support

o NGO Liaison support

o Data collection for government, NGOs and private sector

o Business Process outsourcing and data entry services

*The Plan*

Ø Monday 24th January 2011, public launch of Pasha Project.

Ø Target date for first disbursement of loan is 90 days from launch date. The disbursing bank will require 90 days to review applicants and conclude initial loan disbursements.

Ø Disbursements will be made to entrepreneurs who fulfill agreed conditions and don’t necessarily have to be among those that had received Pasha training prior. Kenya ICT Board in 2009 and 2010 had conducted nationwide 3 week training of 1000 people in business management, entrepreneurship, marketing, basic accounting and technical management (a starter-kit) to prepare potential pasha managers to run Pasha centre.

Ø The agreement with the bank is to ensure we disburse at least one loan per county within the year. Our eventual target is to have 210 pasha centers, one in each constituency by 2012. We shall asses the appetite and would not be surprised if the demand for loans exceeds our target.

Ø We shall encourage entrepreneurs to partner with the networks and any other organizations to beef up their business plans in preparation for loan application and to make their businesses more commercially viable.

*Mechanics of disbursement *

All applications will be forwarded to family bank for commercial assessment. Family bank and an committee appointed by the Kenya ICT Board will assess the best loan candidates on a set of agreed criteria and award the loan against this and a sound and verified business plan. We shall be keen to ensure that people don’t push through paper plans for the sake of cash.

More details will be available on www.ict.go.ke and www.pasha .co.ke

Paul Kukubo Chief Executive Officer, Kenya ICT Board PO Box 27150 - 00100 Nairobi, Kenya

12th Floor, Teleposta Towers Koinange Street

Tel +254 20 2089061, +254 20 2211960 Fax: +254 20 2211962 website: www.ict.go.ke local content project: www.tandaa.co.ke, www.facebook.com/tandaakenya twitter:@tandaaKENYA BPO Project: www. doitinkenya.co.ke Digital Villages Project: www.pasha.co.ke

personal contacts _______________

Cell: + 254 717 180001

skype: kukubopaul googletalk: pkukubo personal blog: www.paulkukubo.co.ke personal twitter: @pkukubo

____________________ Vision: Kenya becomes a top ten global ICT hub

Mission: To champion and actively enable Kenya to adopt and exploit ICT, through promotion of partnerships, investments and infrastructure growth for socio economic enrichment