Safaricom launched mpesa in kenya in march 2007 and has since become the most famous and probably the most successful implementation of mobile money service to date. Mobile financial services are said to promote inclusion. The study set to establish whether the many mergers that have happened in kenyas banking sector had influenced financial performance. Pesalink is a money transfer service from a local kenya shillings bank account to another local kenya shillings bank account in realtime. In may 2008, 14 months after the launch, mpesa in kenya had 2.
The bank added that its shareholders have approved of the union with the listed institution during the companys annual general meeting agm held on 16th april 2019. Community level economic effects of mpesa in kenya. Tailormade for the kenyan society, where many feel formal bank accounts are out of their reach while mobile phone technology has become pervasive, m. Kenya stepped into the arena of mobile money transfer services in 2007 through the successful launch of m pesa by safaricom1, a mobile network operator mno mas and radcliffe, 2010. Many kenyans are familiar with this application because it is widely used in the country. Dec 08, 2016 a study finds the mobilemoney service m pesa has lifted 194,000, or 2 percent, of kenyan households out of poverty, having greater impact on femaleheaded households and helping 185,000 women shift from farming to business occupations. Its more involved than how we marketed or educated about m pesa. M pesa a success story of digital financial inclusion by njuguna ndungu, associate professor of economics, university of nairobi and former governor, central bank of kenya m pesa was first developed as bank product in partnership between safaricom, a telecommunication telco company and the commercial bank of africa. Mergers and acquisitions sweep corporate kenya as global. The app delivers a superior mpesa experience, making it possible to send money to loved ones, access your bank account, pay for goods and services, send money. Mpesa and the rise of the global mobile money market.
Financial services for the underbanked contributed by. The impact of mergers and acquisition on the financial. M pesa helps worlds poorest go to the bank using mobile phones. Browse here for more information regarding mpesa statistics, history of mpesa, access trust deed forms and next of kin claim procedure. Now in use by 9 million customers40 percent of kenyas adult.
Usage and impact from mpesa august 2009 brief despite growing agreement on the potential of technology to expand access to. In this paper, we report initial results of two rounds of a large survey of households in kenya, the country that has seen perhaps the most rapid and widespread growth of a mobile money product known locally as m. Aug 12, 2015 most people probably dont think of kenya as an innovation and technology hub, but in 2007 it became the launching pad for mpesa, a transformative mobile phonebased platform for money transfer. Mpesa in kenya was rolled out by safaricom, which by customer numbers was the largest mobile service provider in east africas largest economy. In this video, nick hughes, head of international mobile payment solutions, vodafone group, talks about their product mpesa in kenya a mobile payment service which allows customers with a. However, the question of how to extend financial access to the unbanked in underdeveloped countries has long remained a puzzle in the development. Its more involved than how we marketed or educated about m. Its improved commerce and brought basic necessities to poorer areas. Transforming millions of lives telecom circle the economic impact of mobile phones is a well talked about fact but the role of mobile phones in remittances and money circulation can be far greater. Practitioners insight mpesa a success story of digital. Mukesh sadana, george mugweru, joyce murithi, david cracknell and graham a. Pesa with indias icici bank, targeting 220 million of indias 700 million under and unbanked people incorporating mpesa into national financial regulatory frameworks has proved challenging.
The mpesa mobile payment system was launched in kenya in 2007. The app delivers a superior m pesa experience, making it possible to send money to loved ones, access your bank account, pay for goods and services, send money. Mpesa continues to dominate kenyan market mobile world live. Opinion in kenya, phones replace bank tellers the new. M pesa m for mobile, pesa is swahili for money is a mobile phonebased money transfer service, payments and microfinancing service, launched in 2007 by vodafone group plc and safaricom, the largest mobile network operator in kenya.
Most people probably dont think of kenya as an innovation and technology hub, but in 2007 it became the launching pad for mpesa, a transformative. The contribution of mpesa to deepening financial inclusion for the poorest socioeconomic groups in kenya is significant. This paper uses a novel, threestep probit analysis to identify. Mpesa is a mobile payments system that allows users to make financial transactions such as deposits, withdrawals, bill payments, remittances, and. A mobile money revolution has swept kenya, where people can send and receive money on their cell phones. Ignacio mas and dan radcliffepesa is a smallvalue electronic payment and storeofvalue system in k enya accessible from ordinary mobile phones. Chapte r 20 mobile payments go viral mpesa in kenya. Cba groups shareholders in support of merger with nic. Pdf mpesa is a mobile phone based money transfer system in kenya which grew at a blistering pace following its inception in 2007. Anyone with a cell phone in kenya or other mpesa regions can use the service. M pesa was originally introduced in kenya as an alternative way for the unbanked. Simply defined, mpesa is a mobile money transfer application, a service from the safaricom network company. The mpesa has brought more than 14 million customers into virtual banking.
The mpesa platform also provides mobile banking facilities to more than 70 percent of the countrys adult population. By janet kamana, nairobi mpesa is a mobile money transfer service supported by safaricom, kenyas largest mobile network operator. The m pesa mobile payment system was launched in kenya in 2007. This is a fast, easy and convenient way to increase your contributions through your mobile phone. Due to changes in the operating environment, several licensed institutions, mainly commercial banks, have had to merge combine their operations in mutually agreed terms or one institution takes over anothers operations acquisitions. Do the mpesa rails contribute to financial inclusion. The countrys successful mobile banking and payments initiative, m pesa, turns 10, while the rest of the world plays catchup. How mobile money has changed lives in kenya page 3 of 3 using a bank for the first time banks, cooperatives, and nonbank financial service providers have quickly connected to mpesa in order to allow existing customers to access their accounts more easily, though to date there have been. The central bank of kenya act as amended in 2003 gives cbk broad oversight mandate over payment systems, but does not provide for operational modalities. Mpesa, an agentassisted, mobile phonebased, persontoperson payment and money transfer system, was launched in kenya on march 6, 2007. About this app the fastest and safest way to send money and make digital payments in tanzania.
Financial services for the underbanked contributed. Mpesa offered a more accessible banking option that was simple to use, less discriminative and fitted right in with the liquid requirements of many kenyans. With mpesa, people can reach out anywhere in kenya. By january 2010, over nine million kenyans had become registered users of mpesa.
Mergers and acquisitions sweep corporate kenya as global investors shop for sure bets. It has since expanded to tanzania, mozambique, drc, lesotho, ghana, egypt, afghanistan, south africa, india, romania, and albania. The role of mpesa in kenyas economic and political development. Feb 22, 2017 kenya s been schooling the world on mobile money for 10 years. The study was coauthored by tavneet suri of the mit sloan school of management. Google is the latest firm in a string of multinational corporations that have had to think global and act local. It is arguably the most developed mobile money transfer system in the world, and has transformed the lives of many kenyans. M pesa and records the quantity of emoney owned by a customer at a given time. This year, the largest concluded deals have seen helios sell a stake in equity bank to norwegian funds and and old mutuals. M pesa, the largest and most innovative mobile financial service in tanzania has enriched your experience by launching the m pesa app.
Safaricom launched m pesa in kenya in march 2007 and has since become the most famous and probably the most successful implementation of mobile money service to date. Mpesa helps worlds poorest go to the bank using mobile. In may 2008, 14 months after the launch, m pesa in kenya had 2. The countrys successful mobile banking and payments initiative, mpesa, turns 10, while the rest of the world plays catchup. Browse here for more information regarding m pesa statistics, history of m pesa, access trust deed forms and next of kin claim procedure. In 2015, kenya commercial bank partnered with mpesa to start a mobile based savings account, kcb mpesa. Customers can get emergency loans without producing collateral or fill any paperwork. Kenyan mergers and acquisitions of 2015 quantum economics. Pesa with indias icici bank, targeting 220 million of indias 700 million under and unbanked people incorporating m pesa into national financial regulatory frameworks has proved challenging. This year, the largest concluded deals have seen helios sell a stake in equity bank to norwegian funds and and old mutuals purchase of a 60. The case of mpesa in kenya scott burns1 abstract many economists argue that financial market development plays a role in fostering economic development.
M pesa is a mobile payments system that allows users to make financial transactions such as deposits, withdrawals, bill payments, remittances, and. The impact of mpesa in kenya isaac mbiti and david n. Why multinationals are yielding to the allure of mpesa. You can now make contributions directly into your nssf account through mpesa. The cabinet has approved merger of export promotion council and the brand kenya board to create kenya. Government merge brand kenya board, export council.
It is a collaboration between all local banks who are members of the kenya bankers association and is managed by integrated payment services limited. The type of research design was the causal study that relies on control factors. Mpesa, kenyas mobile money initiative, turns 10 cnet. Jun 29, 2012 in this video, nick hughes, head of international mobile payment solutions, vodafone group, talks about their product m pesa in kenya a mobile payment service which allows customers with a. Facebook is showing information to help you better understand the purpose of a page.
A mobile banking service that allows users to store and transfer money through their mobile phones. Moving the money from mpesa is free of charge or ledger fee. We examine how mpesa is used as well as its economic. By janet kamana, nairobi m pesa is a mobile money transfer service supported by safaricom, kenya s largest mobile network operator. Introduction mpesa, the mobile banking and payment system in kenya represents the gold standard for innovative financial services. Kenyas been schooling the world on mobile money for 10 years. M pesa is a unique innovation that is rapidly evolving laws must be flexible in order to accommodate new changes and not confine development of new products. According to the imf imf, 2011, mpesa processes more transactions domestically within kenya than western union does globally. A study finds the mobilemoney service mpesa has lifted 194,000, or 2 percent, of kenyan households out of poverty, having greater impact on femaleheaded households and helping 185,000 women shift from farming to business occupations. Mpesa mpesa is a money transfer service wherein users can use their mobile phones to store and transfer money. The role of mpesa in kenyas economic and political. Kenya stepped into the arena of mobile money transfer services in 2007 through the successful launch of mpesa by safaricom1, a mobile network operator mno mas and radcliffe, 2010.
Feb 21, 2017 the m pesa mobile payment system was launched in kenya in 2007. It allows users to store money on their mobile phones in an eaccount and deposit or withdraw money in the form of hard currency at. Productivity, innovation, and entrepreneurship mobile money is a tool that allows individuals to make financial transactions using cell phone technology. An announcement by cba group has made it known that is the final stages of the merger with national industrial credit nic bank. While the delivery of mpesa initially relied on safaricoms dealer network, and later independent mpesa agent networks, banks in kenya moved to embrace mpesa, if only to gain access to safaricoms everwidening subscriber base, a good percentage of whom. Mpesa and records the quantity of emoney owned by a customer at a given time. E40,o16,o33 abstract mpesa is a mobile phone based money transfer system in kenya which grew at a blistering pace following its inception in 2007. Mpesa, the largest and most innovative mobile financial service in tanzania has enriched your experience by launching the mpesa app. In just four weeks, safaricom, the company that launched the mobile pay system, registered more than 20,000 new customers for mpesa, and between its introduction in march 2007 and 2009, its customer base grew to over six million in kenya mas and morawczynski, 2009. It allows users to store money on their mobile phones in an eaccount and deposit or withdraw money in the form of hard currency at one of mpesas numerous agent locations. Today, as it faces new challenges, it has 30 million users in 10 countries and three continents. Simply defined, m pesa is a mobile money transfer application, a service from the safaricom network company. Mpesa helps worlds poorest go to the bank using mobile phones.