TED Talks Daily - A story of moral imagination and bold entrepreneurship | Sitoyo Lopokoiyit and Jacqueline Novogratz

Episode Date: July 10, 2025

In a conversation about visionary leadership, M-PESA CEO Sitoyo Lopokoiyit speaks with impact investor and Acumen CEO Jacqueline Novogratz about how he grew a nascent mobile payment service into Africa’s largest fintech platform — which now handles nearly 60 percent of Kenya's GDP and more than a billion dollars in daily transactions. They draw on insights from both of their careers to explore how trust, innovation and moral imagination can unlock opportunity in overlooked places.Want to help shape TED's shows going forward? Fill out our survey!For a chance to give your own TED Talk, fill out the Idea Search Application: ted.com/ideasearch.Interested in learning more about upcoming TED events? Follow these links:TEDNext: ted.com/futureyou Hosted on Acast. See acast.com/privacy for more information.

You're listening to TED Talks Daily, where we bring you new ideas to spark your curiosity every day. I'm your host, Ilyse Hwu. 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 Satoio Lobokoyet, 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. That's coming up. [♪ music playing and chimes playing in background.

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So you can protect what you build. So you can create new value. Visit pwc.com to learn more. That's pwc.com. Pwc refers to the PwC network and or one or more of its member firms, each of which is a separate legal entity. I 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, started, 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 era of the iPhone and when IBM 2007, which was the year of the iPhone, and when IBM introduced Watson, it was the year of Kindle and Airbnb.

And 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. Sitoi 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. And 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, Sitojo.

First, it's great to be here and apologies for disrupting you twice. I think you know in your journey you've always talked about patient capital so I think the patience paid off and I think we became 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.

And 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, either 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, then put money into it. I'd look at it in the light, just make sure you can see the money. You 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 became how, 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. Every single, I mapped it to Coca-Cola, but in every little village is a Coca-Cola shop. So 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. (*Applause*) And could you even go beyond jobs, Sitoyo, 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 in this whole audience, I can send money to your bank account directly. It'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 percent to, right now, we're at SDG level, which is about 3 percent 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. We're shy in saying the numbers, but it's over $400 billion of value going through the ecosystem. Just. You're so humble, I'm trying to like... No, it's 180 million transactions. In most of our markets, it's between 30 and to markets like Kenya,

it's over 60% of the GDP of the country is flowing through the M-Pesa ecosystem. So it's really transformative in terms of... Thank you. In two weeks, in terms of, let's say, just lending, we lend over 50 million dollars a day with NPLs below three percent, which is unheard of anywhere in the world. So I want to get back to the moral imagination, because this is a massive company. To go into the office of M-Pesa's Safari Com where it's housed is like going into a central

bank, 60 percent 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 £2 million 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, and 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 you operate? 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 and out for a very, very long time.

And 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 watch for visually impaired people in Kenya. And that meant that over a million people now can access financial services with dignity. And that DNA of how we create products and services is what we carry 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 nine million people from the Credit Reference Bureau and gave them a fresh start to rebuild their credit. And 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, in agriculture, in healthcare, and 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, 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. And 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. So... 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-Lite 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, et cetera. The 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 Sotoyo said, our 40 companies have now brought electricity to 300 million people.

It wouldn't have happened without this pay as you go mobile payments system. And that's been just extraordinary. Yeah, and just what you're saying in agriculture. So we've walked with the Kenya government to digitize the whole fertilizer subsidy program. So they're subsidizing production, not consumption. And through MPSA, 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 has been sold through the platform. In 2022 there are 1.4 million farmers, there is 6 million farmers on it. Production is up 39%. Importation of maize is down 23 percent. And farmers are making a better living. And this accounts for, in agriculture, accounts for 30 to 40 percent of the GDP, and most of that is by small-scale farmers who are between one to five acres of land.

And we're impacting and making their lives better. to five acres of land and we're impacting and making their lives better. You've also, um, agriculture is also historically a cash-based industry where there's been a lot of what they call leakage, petty corruption and and you've also significantly reduced that and 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 Sito 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 SafariComm. And in this time where we keep looking around to say, where are our leaders, Bob stands as a giant that we lost him tragically far too young a few years ago. CITOYO, 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. Now, first, I think Africa is rising, but you've mentioned the population,

it's got 30% of it is middle class, that's over 300 million people. 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.

And when we look at AI, I mean, there's fantastic use cases, anti-money laundering, cybersecurity, 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'll 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. And 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 it from Bob. He used to quote Dr. Seuss all the time. He said, the passage is a passage 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. I think that's a great note to end on. Also, that corporate CEOs like Bob, like you, my friend, Cetoyo, have a role to play in the world today, to stand up for those who are overlooked, underestimated, and who we desperately need to help them. 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 as, to be realizing their human potential. And it is such an honor to know you, to work with you, to be accelerated by you.

Thank you. Thank you very much. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. 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 Tansika Samarnivon. It was mixed by Christopher Faisy-Bogan, additional support from Emma Tovner and Daniela Balarezo. I'm Elise Hu. I'll be back tomorrow with a fresh idea for your feed. Thanks for listening. can shift your perspective entirely. Travel does that. It moves us not just physically, but emotionally, even spiritually. We deserve those moments. That's where sell-off vacations come in. For over 30 years they've been helping Canadians travel happy, whether it's a sun-soaked getaway, a cruise through the Mediterranean, or a local escape right here at home. Their community

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