At it's onset, the decade that led to the millennium was marked by a very low penetration of financial services in Kenya, and a banking crisis due to under-capitalization and non performing loans across most commercial banks. Also, in that period, in a bid to boost their earnings and stability, most banks exhibited a preference for lending that mostly targeted public and private enterprises limited to urban areas. This, together with other cultural practices that discouraged banking and uptake of insurance services amongst the low income Kenyan people, led to financial exclusion being entrenched in a good percentage of the population.

Today, thanks to the mobile phone, this is quickly changing. In a country of 40 million people with 75% of it having direct access to a mobile phone, the financial services landscape significantly differs to the one of the nineties.Firstly, financial mobile phone applications like M-pesa that can be accessed via any phone means that a vital financial service like money transfer, once elusive, is availed to the people cheaply. Obviously, with Safaricom's M-pesa being available to over 15 million of the population it could be a major player in our walk towards a desired level of financial inclusion, if not total.

To put things into better perspective, we'd need to first understand what financial inclusion is and what it entails. Simply, it's the process of ensuring financial services are available at affordable costs to vulnerable groups. Vulnerable groups in this case being low income earners while the financial services/products in question are based on Affordable credit, Savings bank account, Payments & Remittance, Financial advice, Insurance and Empowering SHGs (self-help groups).

Thus, to achieve total financial inclusion, these services have to be available to a majority of the vulnerable groups. So far, M-pesa is making gains in that regard considering  some of it's innovations in partnership with experienced industry players have been able to cater for some of these needs successfully.

Already M-shwari, Safaricom's latest offering through M-pesa in conjunction with CBA, has provided a viable solution for affordable credit and savings based services. If the latest data released is anything to go by, then the 50 million currently lent through this service should be an indicator of a bright future.

This means M-pesa is in the process of solving a major puzzle of an all inclusive financial system through accessible lending and savings services to vulnerable groups while counting the gains solidified by it's remittance and money transfer service. Should the services be extended to Self Help Groups(SHGs) through 'group accounts' vetted by each individuals credit record with Safaricom's other products like Okoa Jahazi, another milestone will be achieved and a level of moral hazard risk reduced due to the accountability that can come with lending to groups.

What of the role it could play in insurance?

Currently, the insurance sector is drowned in a myriad of challenges reflected  in it's low penetration that by far excludes a large potion of the vulnerable groups. Some of the challenges cited are lack of a savings culture, unawareness amongst consumers of the insurance products available , credibility issues with insurers and the challenge of 50% of the population living below the poverty line. But this is about to change as recently, Linda Jamii, a product that will see low income earners access affordable health insurance was launched. A partnership between Britam and Safaricom, the  innovation would not be possible were it not for M-pesa's cost effectiveness that has seen a lot of the costs that would have been transfered to the consumer eliminated, though it's real success  is likely to be seen next year when it's rolled countrywide.

Even though M-pesa will play a pivotal role in the journey towards an all inclusive financial system, a lot government support and more sensitization would need to be done. But a great parting shot to all those involved in the journey would be -Don't stop innovating.