A story of moral imagination and bold entrepreneurship | Sitoyo Lopokoiyit and Jacqueline Novogratz

0:06You're listening to TED Talks Daily, where we bring you new ideas to spark your curiosity every day. I'm your host, Elise Hu. I'm always amazed by how entrepreneurial minds are able to solve some of the biggest, most intangible problems we face, seeing scalable solutions against all odds. This is one of those stories. In this conversation, impact investor Jacqueline Novogratz speaks with Satoyo Lobokoiet, the CEO of M-Pesa, Africa's largest fintech platform, to learn how M-PESA's digital banking ecosystem has revolutionized financial access across Africa. It demonstrates how financial inclusion and smart technology truly have the power to uplift entire communities.

0:50That's coming up.

1:00I am so excited to have this conversation with C-Toyo. for so many reasons, but three that I'll start with. First of all, he disrupted the first two industries I worked in. I started off in traditional banking and then in 1986, co-founded the first microfinance bank in Rwanda, both disrupted by M-Pesa. For the last 25 years, I've been investing in social enterprises focused on solving problems of poverty. and for the last 20, M-Pesa has fundamentally accelerated them. And the second reason is the unexpected. M-Pesa was founded in Kenya. What's so extraordinary is this is 2007, which was the year of the iPhone and when IBM introduced Watson, it was the year of Kindle and Airbnb.

1:56And not enough people paid attention to this notion that cell phone banking could be a thing. It would take years before the United States and China took it on themselves. And now when I'm in Nairobi, I can buy a banana or roasted corn on the streets in ways that in New York, often at restaurants, I still can't. I need my credit card. And so it has fundamentally transformed society. The third, which we're going to get to, is the moral imagination. Sitoia and I share a belief that what we need in the world are social entrepreneurs who are using business grounded in moral imagination. In other words, they are fundamentally designed from the perspective of those they are here to serve, particularly the overlooked and the underestimated.

2:51And M-PESA has done that like very few other social enterprises. So thank you for this conversation. You're welcome. And let's start at the beginning, Sitoio. First, it's great to be here, and apologies for disrupting you twice. I think in your journey, you've always talked about patient capital, so I think the patience paid off, and I think we came good for you. I think for M-Pesa, it started with two insights, And I think that's the DNA of M-Pesa. Before we launched in 2007, we were piloting with a microfinance institution, with a women's-only group, which we were trying to give out loans to the women and then see what happens.

3:43And what was happening is, for example, you were sending to her the SMS. And in that pilot, that's the first insight we had. And the second insight that came is a challenge that Kenya had with regards to rural urban migration. So people in the urban areas wanted to send money back home or to their families, to their friends, or to do farming, as an example. And the only way they could do that is physical money. So if I wanted to send money to my mother, who is 500 kilometers away from Nairobi, I would write a letter and put money into it. I'd look at it in the light, just to make sure you can't see the money.

4:24You give it to a bus driver, and then the next day she would go and pick it. And those two insights combined to create our first proposition, send money home. And that's how M-Pesa started 18 years ago. And one thing was, how do you ensure that somebody in rural Kenya with very little education or no education can receive an SMS and knows its money. And if it's deleted, she has the confidence that the money is there. Or if she loses her phone, she knows the money is there. So what we did, we built an agent network. And this is a simple mom-and-pop shop. And we mapped it to Coca-Cola, that in every little village is a Coca-Cola shop.

5:12So in every little place, we put M-Pesa agent outlets. And that meant when you receive the money on SMS, you would actually go to an agent and cash it out. And that builds trust on M-Pesa. And that's how today we have over 700 ,000 agents, and we employ directly 1.5 million people in our agent network.

5:42And could you even go beyond jobs, Sitojo, and talk about the overall stats, if you will, and the impacts that M-Pesa has today? I think first we started with a send money home proposition and then looking at insights, ideas, intensely looking at what customers are doing and we moved to a payment proposition for utilities, water, electricity. Now we've moved into savings, lending, credit, wealth management, international money transfers. Today we connect. You can send money from over 200 countries into Kenya. I can send money, I can bet this whole audience, I can send money to your bank account directly.

6:35It's over 3 billion bank accounts we can send to or to any mobile money platform. And we are connecting families across. in terms of, let's just say, international money transfer, we've dropped that down from highs of 10 % to 15 % to right now we're at SDG level, which is about 3 % from that. And then we moved into the more, you know, the growth area, which is impacting the economy. We're down from governments to the stock exchange, multinationals, Coca-Cola. All these guys run on M-Pesa. And then we've digitized SMEs and micro SMEs. I want to get into all of this stuff, but I just want to give the high line, which is what,$1.5 billion a day, 60 million customers.

7:22We're shy in saying the numbers, but it's over$400 billion of value going through the ecosystem. Just.

7:31You're so humble, I'm trying to like... It's 180 million transactions. In most of our markets, it's between 30 and two markets like Kenya. It's over 60 percent of the GDP of the country is flowing through the M-Pesa ecosystem. So it's really transformative in terms of... Thank you. In terms of, let's say, just lending, we lend over$50 million a day with NPLs below 3 percent, which is unheard of anywhere in the world.

8:11so I want to get back to the moral imagination because this is a massive company to go into the office of M-Pesa Safaricom where it's housed is like going into a central bank 60 % of GDP and there's a lot of security to get it as well but you started off thinking you would be a non-profit a true social enterprise that started off with a two million pound grant. And it's a really important point for all the social entrepreneurs in this room and the philanthropists, because we need the right kind of capital to enable people like Citoyo to build markets that have never existed, particularly for low-income people.

8:53And that takes experimentation and failures and starting over again, you've continued with that sense of the moral imagination to see yourselves not just to make money, although you make plenty of money, but to solve social problems and to really understand who your customers are, even though, especially because they might make one or two or three dollars a day. Could you give me some examples of where that has continued to fuel who you are and how Yeah, I think for us, every single day I walk into the office, it's like the first day at work. And I've been in a place for a very, very long time.

9:37And it's because we enter there every single day trying to solve real-life problems. We look at insights. We innovate around that. So just imagine, in Kenya today, there's six million visually impaired people. and one million people are blind. Now, how do those people who are excluded get to do financial services with dignity? And in 2018, we got to work with a fantastic company from South Korea called The Braille Company, and we built the first braille dot braille watch for visually impaired people in Kenya. And that meant that of a million people now can access financial services with dignity.

10:25And that DNA of how we create products and services is what we carry on until today. In a moment of history where we have so little forgiveness seemingly, something I've learned in 40 years of working in and out of Africa is that quality of forgiveness. And you've integrated that as well. Just in 20 seconds or less, say something about the Financial Inclusion Fund. So it's about two years ago, we created something called the Hassler Fund in collaboration with government. And the government wanted everyone above 18 to have a clean slate. And we worked with them, and they removed 9 million people from the Credit Reference Bureau and gave them a fresh start to rebuild that credit.

11:15And with that, over 20 million Kenyans got back access to financial services from a clean slate. We need this kind of thinking today. I want to move to the adjacent possible because M-PESA has essentially created economic rails, a whole platform on which many other industries can be built. We've seen it in energy and agriculture and healthcare. And I just want to have a conversation about how you've seen these adjacencies evolve. I think this is great. I think when we opened the M-Pesa ecosystem and opened the API, it allowed more innovation to come into M-Pesa. And I strongly believe there's more innovation outside M-Pesa than there is in M-Pesa.

12:02And the energy or the clean energy example, which you are part of, is an example. I think you should talk a little bit more about that because you've impacted over 300 million people globally with access to clean energy through pay-as-you-go solar systems. Well, thank you. It's actually an interesting story that needs to be told, especially in the world today as we're looking at so many frontier markets. But the same year that M-Pesa started, a company called D-Light started with a solar light and this dream of eradicating kerosene. At the time, people had to pay daily for kerosene. Like M-Pesa, they had to build trust, understand the technology, build distribution, etc.

12:43the big area of friction was financing. And for four years, the company struggled. 2011 and PESA for the first time married mobile payments with off-grid solar electrification. So now you could bring electricity into your house and pay for electricity the way you used to pay for dirty kerosene, except that you paid it through your phone every day, 50 cents. And if you didn't make your monthly payments by the end of the month, the solar company could call you and maybe offer you grace or shut down your unit. That was game on solar energy revolution because of the railways of M-Pesa and as Sertoyo said, our 40 companies have now brought electricity to 300 million people.

13:33It wouldn't have happened without this pay-as-you-go mobile payment system. And that's been just extraordinary. And just what you're saying, in agriculture, so we've worked with the Kenya government to digitize the whole fertilizer subsidy program. So they're subsidizing production, not consumption. And through M-Pesa, you get to register as a farmer. You get to put their location, what's your size and what you're planting. and you get information, you get a voucher, you pay on M-Pesa, and government is selling fertilizers directly to its citizens. Today, over$288 million of fertilizers have been sold through the platform.

14:19In 2022, there are 1.4 million farmers. Today, there are 6 million farmers on it. Production is up 39%. Importation of maize is down 23%. and farmers are making a better living. And this accounts from... Agriculture accounts for 30 to 40 percent of the GDP, and most of that is by small-scale farmers who have between one to five acres of land, and we're impacting and making their lives better. You've also...

14:54Agriculture is also historically a cash-based industry. where there's been a lot of what they call leakage, petty corruption, and you've also significantly reduced that. And through our agricultural investing, we've seen just massive changes. So thank you for that work as well. In the interest of time, because Sitoyo and I share a mentor and someone we have all been imprinted by, one of the great moral leaders of our time, a man named Bob Collymore, who ran Safaricom. And in this time where we keep looking around to say, where are our leaders? Bob stands as a giant, though we lost him, tragically, far too young a few years ago.

15:45See, Toyo, you're an African. You have built one of the most important companies in the world. you see a continent that is going to comprise one in four of us with a median age of 19. How do you think about AI, the future, Africa's contribution in the context of the kind of moral leadership that Bob demonstrated for us? First, I think Africa is rising. as you mentioned, the population, it's got 30 % of it is middle class. That's over 300 million people. And for this continent to continue to succeed, it's open for trade. And that's something that's really important for us. And the part of just understanding what the continent needs is very important.

16:45And when we look at AI, I mean, there's fantastic use cases, anti-money laundering, cybersecurity, you know, agriculture, health, and so on and so forth. But for me personally, I think we need to put sort of a handbrake on AI. And the reason for that is we need to open it up, build the algorithms that are relevant to Africa, and not just transport the algorithms there. Because I strongly feel that if we don't do that, it will be a form of colonization, of colonialism, at a scale that we've never seen before. And it is really important that we manage that challenge from that perspective, because it's like we are racing to a finish line that's vanishing.

17:35And for Africa, we need to ensure that the solutions that are brought in make an impact to the lives of the people on the society in which we operate in. And that's very important to me. And for the leadership part, I think I take from Bob, he used to quote Dr. Seuss all the time, he said, the person is a person no matter how small. And that's such a profound statement that we should be able to look at everybody individually and actually listen to them and try and make an impact in their lives.

18:14I think that's a great note to end on. Also, that corporate CEOs like Bob, like you, my friend, Sitoyo, have a role to play in the world today to stand up for those who are overlooked, underestimated, and who we desperately need to be realizing their human potential. And it is such an honor to know you, to work with you. Thank you. To be accelerated by you. Thank you. Thank you very much. Thank you.

18:51That was Satoyo Lopakoyet in conversation with Jacqueline Novogratz at TED 2025. If you're curious about TED's curation, find out more at ted.com slash curationguidelines. And that's it for today's show. TED Talks Daily is part of the TED Audio Collective. This episode was produced and edited by our team, Martha Estefanos, Oliver Friedman, Brian Green, Lucy Little, Alejandra Salazar, and Tonsika Samar-Nivon. It was mixed by Christopher Faze-Bogan. Additional support from Emma Taubner and Daniela Ballarezzo. I'm Elise Hu. I'll be back tomorrow with a fresh idea for your feed. Thanks for listening.