#195
Leapfrogging
Published:
Aug 25, 2018
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“Leapfrogging”, or using the lack of existing infrastructure as an opportunity to adopt the most advanced methods, has been a highly effective strategy for developing nations over the last few decades.
Providing mobile connectivity for billions of people is probably the most celebrated example. But it’s not just physical infrastructure that can be leapfrogged, and we saw that recently when Kenya issued the world’s first mobile-only government bond!
Given the 27m users of mobile money in Kenya, the mobile-only M-Akiba bond promised the government access to a brand new capital base. The bond offered minimum purchase amounts at $30 vs. the $490 previously required for government bonds, a 10% interest rate and a tenor of 3yrs.
The Kenyan Treasury raised KSh247m ($2.45m), just 25 per cent of the target, but 85% of the buyers had never purchased a bond before!
With 70% of Africa’s population under the age of 35, Africa looks like a fertile ground for the development of leapfrog fintech businesses. As Vinay Gupta from the Harvard Business Review says, "We should not be surprised if the world's next leading megabrands and global platforms are born far away from the traditional centers of technology development."
Come on Africa!
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Leapfrogging
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