Jan 17th 2013, 14:45 by E.C. | LOS ANGELES
IN KENYA mobile money has become central to the country’s economy. M-PESA, a service that allows money to be sent and received using mobile phones, has now been adopted by 70% of the adult population and is a conduit for 25% of Kenya’s GNP. Yet elsewhere such services have had limited success, even though there is no lack of demand. In India, for instance, only an estimated 30,000 of the 600,000 villages in the country have bank branches. Little wonder that 700m Indians, or nearly two-thirds of the population, don’t have accounts.
Now mobile money seems to be finally taking off outside Kenya. In both Bangladesh and India mobile-money services now boast a sizeable number of users. And in both cases it is clever entrepreneurs who have pushed things along—rather than a big telecoms operator, as was the case in Kenya.
In Bangladesh bKash has garnered a following of 2.2m users. It has more than 30,000 retail agents, almost one in every two villages, allowing most rural Bangladeshis to use digital cash (see picture). In India BEAM has signed up 14m customers and does 1m transactions every month.
In both cases the success is in large part the result of what Anand Shrivastav, BEAM’s founder and chief executive, calls “the agnostic option”: bKash and BEAM offer mobile wallets that work on any wireless network. This helps overcome what has been a big barrier to widespread adoption of mobile money: that such a service is often limited to one network.
This defeats the purpose, says Arun Gore, chief executive of Gray Ghost Ventures, a social venture-capital firm based in Atlanta, which backs both of these companies. “The very essence of mobile money is to help the unbanked expand their reach,” he argues.
In Kenya this was not an issue: Safaricom, which operates M-PESA, controls two-thirds of the country’s telecoms market, which helped the service spread quickly. In contrast, most other big developing countries have a more fragmented market split between several network operators. In India Airtel and Vodafone have rolled out their own mobile wallets.
Another reason for the growing adoption of mobile money, at least in the case of bKash, is the fact that it is not a single firm, but has a broad network of partners. It is linked to BRAC, a big Bangladeshi NGO, which in turn works with a vast network of mostly mom-and-pop grocery shops, which serve as retail agents for bKash. “They are like an ATM, but a more reliable one in a country where electricity can drop in and out,” says Kamal Quadir, chief executive of bKash.
But what if one of India’s network operators were to offer an “agnostic” mobile-money service of its own? Mr Gore is not worried. In India, he explains, such mobile-money services have to abide by strict banking regulations—something operators are not set up for.
At any rate, mobile money is likely to spread because it is a big help for many—and can save lives. Mr Shrivastav got the idea for BEAM from his driver, who tried to transfer money for medical treatment to his ill mother via money order. She was living in a village with no banks nearby. When the money finally arrived she had already died.