How To Start An MPESA Shop Business In Kenya

For ‘young’ people, starting your very own business and becoming self employed is the most suitable alternative to the ever growing hard to get 9 to 5 jobs. Starting a business is always the best alternative to the ever elusive jobs.

A survey by the Kenya National Bureau of Statistics (KNBS) revealed that seven (7) million Kenyans are unemployed. An additional figure of over 1.4 million are actively looking for employment. With those figures, it is easy to see why more and more people are looking for alternatives.

Because we know very many business ventures require huge amounts of capital to get started, this new How To series will only show you how to start and execute several small business that require capital from as little as 5,000 Kenyan Shillings. Thus giving you the keys to the kingdom of starting a profitable business with little or no capital.

If you are also just looking for a side hustle to maybe supplement your 9 to 5 or full time job, this is for you.

All that you need to thrive in these businesses besides capital, is good customer service of course, great managerial skills, a suitable business location, and a clear cut vision.

Today’s article will show you how to set up an MPESA Shop business in Kenya. While this is not exactly a 5,000 Kenyan Shillings capital business, I am sure you would agree that this is also a very viable option.

MPESA hit the nation of Kenya by storm and almost immediately commanded the lion share of the money transfer market. Today, almost everyone in Kenya uses Safaricom’s MPESA money transfer service.

If you have been considering starting an MPESA shop business in Kenya, you are in the right place. MPESA shops are very profitable ventures. One thing that makes them enticing to entrepreneurs, is that they are rather easy to start and can double as either a main business or side business. Also if you have another business like a Daycare for example or dry cleaning and laundry service, you can also incorporate the MPESA Shop business and run both simultaneously.

How To Start An MPESA Shop Business In Kenya

How much do you need to start a MPESA Shop business? What paperwork, and or equipment are you required to have in Kenya? If you are considering this option, here is everything you will need to kickstart your MPESA Shop business in Kenya:

1. A Location. As with most businesses, a good location is one of the major factors that determine whether or not your MPESA Shop will succeed. Consider the location or area your business will be based in, keeping in mind that the location you do eventually decide on will affect and also influence the particular customers or potential customers, who will require your services.
2. Secure Your Banking License, Other Licenses and Business Permits, As Well As Insurances. You are required by law to acquire a business permit before starting any business in Kenya. Please ensure that you get in touch with the necessary authorities who issue the business permits and licenses. Doing this will show that you abide by guidelines for the business operations in Kenya. You will also need to present your business permits, your Value Added Tax (VAT) and Tax certificates, valid IDs, a police clearance certificate and a valid banking license from a financial institution that is reputable. So getting the required documents, is a must.
3. Renovating And Branding Your Shop. After securing a location or space, you will need to brand your MPESA Shop with the Safaricom and MPESA colours and logos.

Requirements For Becoming An MPESA Agent

To operate an MPESA shop as an MPESA agent, you will need:

1. To have a registered limited company, that has been active for at least 6 months.
2. You must have at least 3 other outlets under the same company name, that are ready to offer Safaricom’s MPESA services.
3. You will need to have 100,000 Kenyan Shillings. That is the minimum investment for float on Safaricom’s MPESA per outlet.
4. If you want to have more than one MPESA Agent shop, make sure that the shops are spread in at least two different counties.
5. You must also invest 100,000 Kenyan Shillings for simex (sim replacement cards).

Once done, head to the MPESA Agent head office and fill in the application form, along with the MPESA Agent store application form.

After submitting the forms and meeting all the requirements you will then be given an MPESA Till Number that you will use.

How To Run Your MPESA Shop

1. You can either decide to run the MPESA outlet yourself or decide to hire a very competent staff. Make sure that they have at least Kenya Certificate of Secondary Education (KCSE) qualifications.
2. Make sure that you know how to accurately deposit money into the accounts of your clients who are registered customers with MPESA.
3. Make sure that you know how to accurately carry out cash withdrawal requests and operations for your clients who are registered customers with MPESA.
4. Make sure you know how to register new MPESA users.
5. Make sure you comply and adhere to all of Safaricom’s business practices.

Requirements For Becoming An MPESA Sub Agent

MPESA Sub sub agents are the MPESA stores that we all see all around our respective neighborhoods. Be an MPESA sub agent, is a lot more affordable than registering as an agent.

To become an MPESA sub agent however, you will need to be recruited by a licensed Safaricom MPESA Agent and you will be working directly under them. You can also opt to buy their registered MPESA alone and proceeed to pay them commissions for using their lines.

As a sub agent, you only need 20,000 Kenyan Shillings to 40,000 Kenyan Shillings for MPESA float.

Challenges With Running An MPESA Shop

1. The MPESA Shop scene, is a rather crowded one. There are MPESA shops all around us and literally everywhere, on every street, in every mall, Supermarket, etc. this makes the business very competitive.
2. Because you will have to share your profit(s) with Safaricom and because Safaricom also determines the profit you make, some individuals do not view running an MPESA shop, as an entrepreneurial venture.
3. The MPESA Shop business, also constitutes a rather huge security risk. This is because the potential large amount of money transactions that occur in MPESA Shops, make them a major magnet for criminals.
4. Because of Safaricom’s strict guidelines for MPESA agents and sub agents if you daily to comply with the guidelines, your MPESA lines can be blocked.

And that is it! All you need to know about starting your very own MPESA Shop business.

Is the MPESA Shop business suitable for you? That question, is left for you to think on and answer. This writer’s goal is to open your eyes to the various entrepreneurial opportunities that abound in the country.

Also while the prospects are very promising please have a realistic approach as well. As with any business, there is a chance that you might incur losses. Especially at the beginning.

Was this article helpful? Are there any other How To topics you would like us to write on? Feel free to reach out to Mpesa Pay in the comment section.