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‘Why Should We Tolerate Being Ill-Treated?’

For half a decade he has made award-winning music, controversial headlines and divided critics. Now, the self-proclaimed prince of hip hop and “misunderstood” college dropout wants to rule African rap and believes Nigerians have got it right.

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He is two hours late for the interview. As we contemplate calling it quits, he speeds in with his Volkswagen Scirocco. Dressed in black pants and camouflage coat, he dashes into the changing room to prepare for the photoshoot. King. Genius. Irritating. Self-obsessed. Arrogant. Jerk. All words that have been used to describe the self-proclaimed South African “prince” of hip hop, Kiernan Jordan Forbes, alternatively known as AKA.

“A publication wrote an article about me with a headline ‘SA’s crowned prince’ and I thought it has a nice ring to it. What I learned in this industry is that you are what you say you are. If you say something enough times, eventually people pick up on it. So I started calling myself the prince of hip hop and now a lot of people do too,” he says.

In July, he had just become a father; his eyes are slightly puffy from sleepless nights yet he shrugs it off for the shoot and interview. He doesn’t come across as the self-obsessed, arrogant jerk some fans make him out to be. Showing his humble side he adds that he doesn’t call himself the king of hip hop, out of respect for more experienced artists.

“Wait until I get another two albums and more wins under my belt, then I might start calling myself the King.”

“Competition dead and buried in the dust I’m like the legendary Brenda Fassie…” The lyrics to his hit All Eyes On Me is a salvo full of intent.

AKA has the confidence of a superstar and success to match. His personal life, just like every other celebrity, is daily bread for South African tabloid newspapers. The buzz is more than justified. He did not break the internet, but, five years into his career, he has awards from Channel O, Metro FM, MTV African Music Awards (MAMA) and South African Music Awards (SAMA); including a coveted Black Entertainment Television (BET) nomination for the Best International Act: Africa category, and many more.

“I don’t belong exclusively to South Africa anymore. I am making a transition to belonging to the continent. I was so excited about the BET nomination because we have been working hard. Yes, we have won the SAMAs, yes we have won Metro FM awards, yes, we have won the Channel O awards, but the one thing we hadn’t done was get a nomination for a BET. We have done a lot of good work on the continent and it was great to get recognition for it.”

The rapper has more than 777,000 followers on Twitter.

“We are excited about AKA’s growth prospects in Africa and beyond. His unique approach to producing hits sets him apart from the average rap artist; this is an artist with not only innovative creative sense but with the ambition for international stardom,” Zakes Bantwini, Executive Head of A&R for Sound African recordings, reportedly said when AKA signed the deal with Sony.

Born in Cape Town, he moved to Johannesburg when he was six. As a child, he developed a love for music while listening to records with his father, whom he says gave him a broad appreciation.

He started out in a teenage hip hop crew called Entity in 2002 which was nominated in 2005 for Best African Hip Hop in the KORA Awards. As Entity disbanded in 2006; AKA went off to study sound engineering only to drop out so he could brand himself as a legend. He ventured into a solo career with early hits like Mistakes, In My Walk and Do It; the latter making it to number one on the South African 5FM Top 40.

“I love AKA. He is the king of rap. His style is international, making it easy for him to collaborate with any international artist if he ever wishes to. His flaws are also massive but he has mega talent,” says South African fan, Mthokozisi Dumani.

Public relations company owner, Allegro Dinkwanyane, says, “AKA is a very talented artist that’s contributing to the growth of South African hip hop internationally. Personally, I think Kiernan is a much nicer person than AKA. I guess it’s a persona that works well for him as a rapper. Arrogance aside, I’d definitely rank him in my top three South African hip hop artists, but still an album or two away from being ‘the prince of South African hip hop’.”

“I like his music but I don’t understand the guy. His character is weird. Sometimes you would think he has some sort of disorder because he never lets things go. When something happens, he always wants to have a say. He needs to learn to be humble and let things go,” says Zimbabwean fan, Mercy Sibanda.

“I think AKA is the prince of African rap but his arrogance takes away from his talent. Yes, he’s good at what he does but he doesn’t need to constantly toot his own horn,” adds hip hop fan, Lebogang Mathebula.

Little has changed in his character. The 27-year-old says he has always been a show-off who speaks his mind. Fans scolded him for his Twitter rants and controversial views. At the coveted annual Durban July horse racing event, AKA kicked a fan off stage; on a separate occasion he said he will not take a photo with anyone who calls themselves a fan, yet don’t own his album; he does not open for international acts in South Africa and the list goes on.

“I don’t like it when people call it a rant. It’s not a rant, I am just expressing myself. If I wasn’t me and my personality wasn’t what it is, my music wouldn’t be what it is. You can’t separate my music from my personality. Without the personality my music wouldn’t exist,” he says.

He claims he has never tried to be controversial, as the truth is controversial enough.

“I have always been like this, before the fame and money; I have always been someone who speaks the truth. I told myself that when I make it, I will do things on my own terms. I try to be myself as much as possible. Most of the time it works for me and sometimes it doesn’t.”

“If you don’t own my album, how can you be a fan? You can afford a smartphone to take a photo with but you can’t afford R100 ($7.50) for my album? Real fans support the artists. If you come to me, you want a piece of me or my time, so why can’t you buy my album?” he says.

“The country has never seen anything like me; someone as expressive, as blunt, as honest and dedicated as I am. Everything with me is intense,” he says.

According to AKA, thinking success is easy can be dangerous.

“When you start out, you work hard and say you can’t wait for the day when you are successful. When you finally get there, you realize getting there is not hard, staying there is.”

African hip hop and Afrobeats are everywhere on the radio these days. Much of that is attributed to African artists touring the world and making their presence known. AKA has toured some parts of Europe and has worked with Nigerian stars Ice Prince and Burna Boy, from whom he has learned a thing or two.

“Nigerians work much harder than the average South African artist. They are much more unapologetic, that’s why sometimes I feel like I belong there. [In] Nigeria, artists are encouraged to be superstars, yet in South Africa being a superstar is frowned upon.”

“We love to be humble people, and there is nothing wrong with being humble. Humility is the greatest source of our strength, but also, the great source of our weakness. In Nigeria and the US they are told to be great and in South Africa we are told to be humble which makes us meek, subservient and easily taken advantage of,” he says.

Although he has opened for Kanye West, Snoop Lion, Rick Ross, 2 Chainz, Big Sean and Kendrick Lamar on tour, AKA swears he will never open for an international artist in South Africa.

“Promoters treat us differently from Kanye West and all these other artists. They get better sound, better money and better treatment, yet we would be performing in our own cities. Promoters say we should do it for exposure but exposure to whom? These are our people who know us, so why should we tolerate being ill-treated?”

According to AKA, South Africa needs to redress legacies of apartheid. He believes African artists should be respected like international artists.

“We still have that mentality of saying ‘how can AKA and Drake be on the same stage?’ We need to address our own self-worth. Apartheid left in us the idea that we are not worth more and we need to change that,” he says.

AKA is not a hugely sentimental man, but a glimpse of his softer side shines on social media when he talks of his daughter Kairo.

“It took a while for me to figure out how to change a nappy as Kiernan insisted on doing it himself all the time. He would wake up at night during our stay at the hospital and get up to change the baby’s nappy. I remember thinking that I really needed to learn, but it felt good knowing that he was so hands on,” says Kairo’s mother, DJ Zinhle, on her blog.

When Zinhle had her baby shower she says AKA “popped in to say hi to the ladies, he walked in carrying the most adorable Melissa and Doug Giraffe, with a big pink satin bow tied around her neck”.

Since the baby, AKA says he only sleeps for three to four hours a day; instead of six.

“There is no balance in my life. I still need to find it. I am mentally tired, physically tired, I need a holiday, I need a break but there is just no time. My life is exploding, I am having a baby; I’m on tour and have interviews.”

Although reluctant to share his net worth, the 27-year-old divulges that he makes more than R100,000 ($7,500) from performing each month. He also has income from TV shows, and various business ventures. He designed a range of headphones, Bluetooth speakers and clothing items which are sold nationwide.

“I want to make sure my future is secure. By the time I hang the mic I should be able to provide a great life for my children and their children and children’s children.”

As the saying goes, “the man who moves a mountain begins by carrying away small stones”. You could argue AKA is doing this. You can also argue he has had more than his fair share of stones thrown at him. No matter, AKA wants to be the king of African hip hop.

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Forbes Africa | 8 Years And Growing

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As FORBES AFRICA celebrates eight years of showcasing African entrepreneurship, we look back on our stellar collection of cover stars, ranging from billionaires to space explorers to industrialists, self-made multi-millionaire businessmen and social entrepreneurs working for Africa. They tell us what they are doing now, how their businesses have grown, and where the continent is headed. 

Since its inception in 2011, and despite the changing trends in the publishing industry, FORBES AFRICA has managed to stay relevant, insightful and sought-after, unpacking compelling stories of innovation and entrepreneurship on the youngest continent, in which 60% of the population is aged under 25 years.

 Many of those innovations have been solutions-driven as young entrepreneurs across the continent seek to answer questions that have burdened their communities.

 Always on the pulse, FORBES AFRICA has chronicled and celebrated those innovations – prompting the rest of the globe to pay attention and be fully engaged.

 A prime example of this is the annual 30 Under 30 list, which showcases entrepreneurs and trailblazers under the age of 30 from business, technology, creatives and sports. In 2019, we had 120 entrepreneurs on the list, finalized after a rigorous vetting and due diligence process to well laid down criteria.

 We have always maintained the highest standards of integrity in all our reporting.

 As we transition into the next milestone, FORBES AFRICA reflects on the words of civil rights activist Benjamin Elijah Mays, who once said: “The tragedy of life is not found in failure but complacency. Not in you doing too much, but doing too little. Not in you living above your means, but below your capacity. It’s not failure but aiming too low, that is life’s greatest tragedy.”

 With the transformation in the media landscape, the recent awards given to the magazine for the work done by a hard-working, determined and youthful team, serve as a reminder that we are doing something right.

 Early this year, FORBES AFRICA journalist Karen Mwendera received a Sanlam award for financial journalism as the first runner-up in the ‘African Growth Story’ category. In January, FORBES AFRICA’s Managing Editor, Renuka Methil, received the ‘World Woman Super Achiever Award’ from the Global HRD Congress.

 In reflecting on the last eight years, this edition revisits a few of the strong, resilient men and women who have graced our covers.

For some, fortunes have literally changed, as witnessed in the fall of gargantuan African empires such as Steinhoff. Of course, there have been massive moments of triumph too, which have seen some new names feature on the annual African Billionaires List. There have also been moments of tragedy with former cover stars passing away.

 Africa is ripe for the taking and is seen as the next economic frontier. The unique position the continent finds itself in will no doubt give FORBES AFRICA plenty to report on. Here’s to more deadlines and debates for the next eight years.

– Unathi Shologu

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Having A Ball With Data

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Stephan Eyeson started a basketball business at the age of 19. That venture failed, so he tried the data business instead. He is working and playing hard.


First, the facts.

Africa has a data problem. For all the talk about data being the new oil, the continent comprises about 12.5% of the world’s population but only accounts for less than 1% of research output, according to global information and analytics firm, Elsevier.

And Survey 54, an AI mobile survey platform solving the problem of data collection on the continent, wants to offer a solution. Founded by Stephan Eyeson, Survey 54 focuses on providing good quality data essential for governments and private businesses to accurately plan, fund and evaluate their activities.

READ MORE | Owning The African Narrative

“Data in Africa is such a prevalent problem, in a sense of when you are going to start up a business, it is hard for you to get consumer data on say ‘how many people eat out in Lagos every day? what is the transactional value? what are the types of things that people eat? what do they want to eat etc?’ All these things are available in the West but for people who want to move into Africa for business, how do they get their data to make their decisions and how do we make it really easy for them and not just for a startup but for even governments and larger businesses,” says Eyeson.

Fresh out of a master’s program in innovation and management from Loughborough University in the United Kingdom (UK), Eyeson joined Survey Monkey, an online survey development cloud-based software as a service company, as part of the team responsible for building their enterprise function in London as well as looking after customers in the EMEA (Europe, Middle East and Africa). After learning the ropes, he decided to branch out to start his own company to offer a more robust and tailored solution for the African market.

“For people who want to move into Africa for business, how do they get their data to make their decisions and how do we make it really easy for them?”

“The problem around data in Africa and emerging markets is a massive one. So, for us, it’s about how do we become a data platform not just for a company but for governments to help them understand their people easier.”

Data is the first step. Then you need intelligence around that data to enable you to make objective analysis that will shape your decision-making process, as well as provide the foundation for policy-making and budgeting.

“Instead of hiring an agency to go to Ghana and do a face-to-face interview, for example, we look at how governments can get mobile data faster and then how they are able to manipulate that data to get the results they need,” says Eyeson.

READ MORE | The $100 Trillion Opportunity: The Race To Provide Banking To The World’s Poor

Due to the dearth of knowledge, Eyeson’s unique understanding for the data space is relied on by many startups and larger businesses who depend on his expertise to drive results in Africa.

“Stephan has great expertise in strategy and high-level corporate business development. Survey 54 has and will be instrumental for companies to make decisions within Africa and emerging markets, making it easier to use and understand consumer data. A platform like Survey 54 is essential for companies operating on the continent,” says Nana Adomako, head of UK & Ghana growth at Taptap Send.

Born to Ghanaian parents in London, Eyeson’s first stint at entrepreneurship began in his early years at university, when his dream to become a professional basketball player was shattered.

“I had a scholarship into America for basketball and that scholarship was taken away due to some technicality with my results so I couldn’t go and so I started a basketball business instead when I was 19. It helped Americans play in Europe and Europeans play in America. I made the system easier. So, players paid a monthly fee to get seen and coaches paid to get access to talent.”

But unfortunately, the business failed to take off because the market was not big enough for Eyeson to remain profitable.

The data business, on the other hand, is huge: worldwide revenues for data and business analytics are forecast to reach $189 billion this year and $274.3 billion by 2022, according to technology market research firm IDC. Even though Survey 54 is in its first full year of business, the company has already secured contracts with multinationals like Colgate, amongst many others.

READ MORE | A Germ Of An Idea

“I was one of Survey 54’s first clients and it has been a pleasure watching Stephan grow the company into what it is today, working with some of the world’s largest brands.

“There is a significant lack of data in the region so the need for a sophisticated data insight product is essential and I believe Stephan’s mission-driven leadership style will enable the company to become one of the largest software businesses driving investments to the content,” says Yvonne Bajela, Principal and Founding Member at Impact X Capital.

The company has recently secured a spot on the coveted Startupbootcamp platform in Cape Town. While Survey 54 is trying to secure a first-mover lead in data on the continent, challenges remain. As the company scales, they will need to overcome the language barrier across the African continent and learn to interpret data by bringing the cultural context into the surveys organizations are seeking.

Eyeson has his eyes set on moving into the US markets as a long-term plan, but for now, the goal is transferring the abundant and ubiquitous asset of data in Africa into millions for his startup.

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Entrepreneurs

The $100 Trillion Opportunity: The Race To Provide Banking To The World’s Poor

Companies like Tala are at the forefront of the race to deliver rudimentary financial services to the 1.7 billion people on the planet who lack even a bank account.

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Two years ago, Amylene Dingle lived with her husband and 7-year-old daughter in Payatas, an impoverished Manila neighborhood with the largest open dump site in the Philippines. Her husband worked on the security staff in a government building, earning 4,000 pesos a week, the equivalent of $80. She had always wanted to start a business, but she was unemployed, had no money saved, no credit history and couldn’t get a credit card or a bank loan.

Dingle’s fortunes took a dramatic turn after she responded to a Facebook ad for Tala, a Santa Monica-based startup that makes small loans through a smartphone app. After granting Tala access to her phone, through which the app cleverly parses mobile data to assess a borrower’s risk, she got a 30-day, $20 loan. She paid 15% interest and used the money to buy cold cuts, hamburgers and hot dogs. She marked them up 40% and sold them door-to-door, earning $4 in profit after paying back the interest and a small processing fee.

Loan Ranger: Tala founder Shivani Siroya at her startup’s Santa Monica headquarters. She uses cellphone data to establish creditworthiness for people rejected by banks in the developing world. ROBERT GALLAGHER FOR FORBES

Today Tala lends Dingle, 42, $250 a month for her now thriving food business. Her $70 in weekly profits have nearly doubled her family’s income and funded their move to a two-bedroom home in the quiet, clean Batasan Hills district. Tala is thriving, too. Founded in 2011 by Shivani Siroya, a 37-year-old former Wall Street analyst who had worked at the United Nations, it has raised more than $200 million from top U.S. investors, including billionaire Steve Case’s Revolution Growth fund. With estimated 2019 revenue of more than $100 million, Tala is valued at close to $800 million.

Companies like Tala are at the forefront of the race to deliver rudimentary financial services to the 1.7 billion people on the planet who lack even a bank account. Providing them with the basics of credit, savings and insurance is one of the great challenges and opportunities of the century. With access to the financial system, people can buy a car or a home. They don’t have to resort to loan sharks if they face a medical emergency. They are happier. They live longer. They are more productive, and their increased productivity will help lift their nations out of poverty. Serving the unbanked will generate some of tomorrow’s largest fortunes. It is both capitalism’s moral imperative and the route to one of the most significant untapped markets.

While the unbanked pay for everything in cash, an even larger swath of people, the more than 4 billion “underbanked,” may have accounts but struggle to make ends meet, racking up steep fees when checks bounce and resorting to high-interest alternatives like payday loans. Traditional banks alone could boost annual revenue by at least $380 billion if they turned all the unbanked into customers, according to a 2015 Accenture report.

The multiplier effects are staggering. The GDP of emerging-market countries would surge $3.7 trillion by 2025, or 6%, if they adopted a single innovation—switching from cash to digital money stored on cellphones, McKinsey estimated in 2016. Diego Zuluaga, an analyst at the Cato Institute’s Center for Monetary & Financial Alternatives, has studied the likely effects of full financial inclusion: “If we were to give the unbanked and underbanked in the developing world the same kind of access to credit and investments that we have in rich countries, you could easily create an additional $100 trillion in financial assets over the next 50 years.”

 
Tala founder Siroya was raised by her Indian immigrant parents, both professionals, in Brooklyn’s gentrified Park Slope neighborhood and attended the United Nations International School in Manhattan. She earned degrees from Wesleyan and Columbia and worked as an investment banking analyst at Credit Suisse and UBS. Starting in 2006, her job was to assess the impact of microcredit in sub-Saharan and West Africa for the UN. She trailed women as they applied for bank loans of a few hundred dollars and was struck by how many were rejected. “The bankers would actually tell me things like, ‘We’ll never serve this segment,’ ” she says. 

Where banks saw risk, she saw opportunity. For the UN, she interviewed 3,500 people about how they earned, spent, borrowed and saved. Those insights led her to launch Tala: A loan applicant can prove her creditworthiness through the daily and weekly routines logged on her phone. An applicant is deemed more reliable if she does things like regularly phone her mother and pay her utility bills on time. “We use her digital trail,” says Siroya.

Tala is scaling up quickly. It already has 4 million customers in five countries who have borrowed more than $1 billion. The company is profitable in Kenya and the Philippines and growing fast in Tanzania, Mexico and India.

Rafael Villalobos Jr.’s parents live in a simple home with a metal roof in the city of Tepalcatepec in southwestern Mexico, where half the population subsists below the poverty line. His father, 71, works as a farm laborer, and his mother is retired. They have no credit or insurance. The $500 their son sends them each month, saved from his salary as a community-college administrator in Moses Lake, Washington, “literally puts food in their mouths,” he says. 

To transfer money to Mexico, he used to wait in line at a MoneyGram kiosk inside a convenience store and pay a $10 fee plus an exchange-rate markup. In 2015, he discovered Remitly, a Seattle startup that allows him to make low-cost transfers on his phone in -seconds. 

Immigrants from the developing world send a total of $530 billion in remittances back home each year. Those funds make up a significant share of the economy in places like Haiti, where remittances account for more than a quarter of the GDP. If all the people who send remittances through traditional carriers, which charge an average 7% per transaction, were to switch to Remitly with its average charge of 1.3%, they would collectively save $30 billion a year. And that doesn’t account for the driving and waiting time saved. 

Remitly cofounder and CEO Matt Oppenheimer, 37, was inspired to start his remittance service while working for Barclays Bank of Kenya, where he ran mobile and internet banking for a year starting in 2010. Originally from Boise, Idaho, he earned a psychology degree from Dartmouth and a Harvard M.B.A. before joining Barclays in London. When he was transferred to Kenya, he observed firsthand how remittances could make the difference between a home with indoor plumbing and one without. “I saw that $200, $250, $300 in Kenya goes a really, really long way,” he says.

Oppenheimer quit Barclays in 2011 and together with cofounder Shivaas Gulati, 31, an Indian immigrant with a master’s in IT from Carnegie Mellon, pitched his idea to the Techstars incubator program in Seattle, where they met Josh Hug, 41, their third cofounder. Hug had sold his first startup to Amazon, and his connections led them to Bezos Expeditions, which manages Jeff Bezos’ personal assets. The fund became one of Remitly’s earliest backers. To date, Remitly has raised $312 million and is valued at close to $1 billion.

Oppenheimer and his team can keep fees low in part because they use machine learning and other technology to bar terrorists, fraudsters and money launderers from transferring funds. The algorithms pose fewer questions to customers who send small sums than they do to those who send large amounts.

Remitly transfers $6 billion a year, serving senders in 16 countries, including the U.S., Australia and the U.K., and recipients in 45 nations. In the first half of 2019 it added 15 receiving countries, including Rwanda and Indonesia. The company is not yet profitable, but last year estimated revenue came to $80 million. Oppenheimer sees a huge growth opportunity. Fewer than 1% of the world’s 250 million immigrants are Remitly customers. 

In 2012, Dorcas Murunga lived in Gachie, a crime-ridden neighborhood on the outskirts of Nairobi. She earned $80 a month babysitting and cleaning houses, and her husband made $120 installing elevators. He covered most of their expenses while she struggled to save money. Whenever she had cash, she says, she spent impulsively on clothes, junk food and alcohol. She managed to put aside the $5 minimum balance required to open a savings account at Equity Bank of Kenya, but she had a hard time coming up with the $3 monthly fee. To make a deposit, she took a bus an hour each way and waited in line for an hour at the bank. She closed the account after just one year. 

Like most Kenyans, Murunga was already using M-Pesa, a service created by Safaricom to send money via text message. In 2012, Safaricom, a subsidiary of British telecom giant Vodafone, introduced M-Shwari, a savings account and loan service it integrated into M-Pesa. Two years later, it started offering an account that locked up a customer’s funds for a fixed period at a fixed interest rate.

Determined to improve her finances, Murunga committed to saving $1 a day through her locked account. When she got the urge to buy vodka or a pair of shoes, she says, she’d make deposits through her phone instead. She cut her spending by two thirds, to $10 a week. By 2016, she was saving $300 a year. She had started a business making handbags, and the savings helped pay for design courses. She has invested in real estate with her husband and says she spends more than $200 a year helping friends and family. 

The spark for M-Pesa (pesa means money in Swahili), the first mobile money provider in Africa, came in 2003 from Nick Hughes, a Vodafone executive who managed a five-person team tasked with creating wireless products with a social impact. Hughes’ idea: set up a digital money-transfer system that would operate through personal cellphones.

Since M-Pesa launched in 2007, it has exploded in size and popularity. Kenyan taxi drivers complain when riders try to pay in cash. Ninety-six percent of Kenyan households now transact through M-Pesa. Before M-Pesa, only 27% of Kenya’s then 38 million people had bank accounts. Kenya’s population has since risen to 51 million, and 83% have checking or savings accounts. The service has spread to eight countries, including Egypt and India. Sending less than 50 cents is free. M-Pesa charges 1% to 2% for larger amounts. Through its various subsidiaries, M-Pesa generates some $840 million in annual fees for Vodafone.

The adoption of M-Pesa has had a tremendous impact on Nairobi’s startup scene. Durable-goods providers have introduced pay-as-you-go plans that bring in millions of new customers. For example, three-year-old Deevabits, based in Nairobi, sells $80 home solar systems in remote villages with no access to electricity. All its customers use M-Pesa to make an initial deposit. They pay the remainder through M-Pesa in 50-cent daily increments over eight months. “The presence of M-Pesa has transformed how business is done in Kenya,” says Deevabits founder and CEO David Wanjau, 32. “We couldn’t operate without M-Pesa.”

Dixie Moore used to strain to make paychecks last to the end of the month. A 25-year-old single mother with two small children, she earns $12.25 an hour as an assistant manager at a Bojangles’ fast-food restaurant in Canton, Georgia. In 2011, she was paying $30 a month for a Wells Fargo checking account, but when a bounced check and multiple overdraft fees left her with a $1,200 negative balance, she lost the account. She regularly paid up to $6 to get her paychecks cashed. “I was stuck between a rock and a hard place,” she says. Then a friend told her about MoneyCard, a Walmart-branded product offered by Pasadena, California–based Green Dot, the largest provider of prepaid debit cards in the U.S. Now her employer deposits her paychecks directly onto the card, and she uses it to pay for everything from groceries to dentist appointments. “It has really been a blessing,” she says. 

Green Dot offers a financial lifeline to people like Moore. Until she started using the card two years ago, hers was among the 7% of American households—representing some 14 million adults—that get by entirely on cash. Founded in 1999 by a former DJ named Steve Streit, the company initially focused on teenagers who wanted to shop online. But seeing a larger opportunity, in 2001 Green Dot shifted its focus to adults who were using the card because they had bad credit or couldn’t afford commercial bank fees.

One advantage of cash cards: When users spend all the money on their card, it’s like running out of paper cash. They avoid overdraft fees that can run as high as $35 for a single infraction. The cards also make it possible for users to buy online.

Streit, 57, says that nearly 40% of Green Dot’s 5 million customers were previously unbanked.

In 2007, he struck a deal with Walmart that was a boon for the chain’s then 130 million customers: a cash card with a monthly fee of just $3 (today it’s $5). That’s down from the nearly $8 monthly fee paid by users who bought their cards at stores like CVS. The surge in Walmart card sales helped make up for the shortfall from the lower monthly charge.

In 2010, Streit took the company public. Though Green Dot generated revenue of $1 billion last year, its stock slid 40% this past August as it lowered its revenue expectations, citing the increase in well-funded competitors entering the market. But bad news for Green Dot is good news for America’s unbanked. Smartphone-based cash offerings from venture-backed startups like Chime, a six-year-old digital bank based in San Francisco, and digital-payment company Square’s Cash App are signing on millions of customers.

Harvard Business School professor Michael Chu, a former partner at KKR who cofounded Mexico City-based Compartamos, Latin America’s largest microfinance lender, says the opportunity to serve the underbanked in the U.S. is “huge.” But paradoxically, the richest nation on earth poses some of the greatest barriers to financial-inclusion innovators. A patchwork of state laws intended to protect borrowers from predatory lenders and federal laws that guard against money laundering requires startups to navigate through a maze of red tape.

Another problem: The technology that transfers funds between U.S. financial institutions is old, slow and expensive. While M-Pesa zips mobile money across Kenya in seconds at virtually no charge, an electronic fund transfer from Miami to New York can take two days and cost as much as $40. 

But in the grand scheme these are minor obstacles. The Fed has promised to build a new and improved U.S. transfer system by 2024. Entrepreneurs will lobby—or innovate—their way around the bureaucratic barriers. After all, there are billions of dollars to be made—and countless lives to improve.

By Jeff Kauflin, Fintech, Forbes Staff and Susan Adams, Education, Forbes Staff.

Additional reporting by Anna Corradi.

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