Broadband spurs new businesses and ideas in Kenya

“We need one, like, yesterday ... we are an information society. This information can be used for scams and identity fraud,” he said. “How the information is collected is critical, how it is stored is critical as is how it is accessed.”

He adds that lack of data protection guarantees, coupled with a judiciary that is perceived to be weak and slow, could dissuade some foreign firms from investing in the sector.

Julian Cunningham-Day, a partner at London-based Linklaters, says there are other challenges to Kenya’s ambitions for its outsourcing sector like unreliable power supply and perceptions of political instability.

“The clashes following the disputed elections in 2007-8 shattered many peoples’ perceptions of Kenya as a politically stable country,” said Cunningham-Day.

Those chaos did not dampen a move towards online shopping.

Motivated by the rise of access to the Internet, banks like I&M Bank started this year to offer electronic payments services to businesses in the country.

“The new payment gateway will give potential and existing Kenyan e-commerce merchants the opportunity to expand their sales online with a significant reduction in transaction costs,” says Arun Mathur, the bank’s chief executive.

Businesses which have existed for decades are also searching for ways of leveraging the enhanced access to the Internet.

Peter Mwangi, chief executive of the Nairobi Stock Exchange, says they are looking to introduce Internet and mobile phone-based trading this year to allow investors to take advantage of market moves in real time.

The stock exchange is the fifth-largest in Africa after South Africa, Morocco, Egypt and Nigeria and was the top-performing market in Africa in the first quarter, with the main index up 25.4 per cent after a lacklustre 2009.

While the bourse awaits the introduction of new channels for trading, Kenyan musicians are already tapping the Web to market their music, and finding.

A group called Just A Band realised the power of the Internet after posting a short clip of its video called Ha-He on YouTube.

The clip, that features a character named Makmende, went viral, taking social sites such as Facebook and Twitter by storm.

It spawned Makmende Internet pages, turned the song into a hit that dominated many conversations, mainly around jokes about the tough character who rescues girls and torments the bad guys in his superhero role.