MICROCAPITAL BRIEF: Survey on Kenya's M-PESA Mobile Transfer Service Shows Increased Impact in 2009

A survey of Kenya’s M-PESA program, a cellphone-to-cellphone money management service, that was conducted by Billy Jack of Georgetown University’s Economics Department and Tavneet Suri of the Massachusetts Institute of Technology’s (MIT’s) Sloan School of Management, examines the impact of the service on its users. The survey indicates that, in 2008, 43 percent of households nationwide had at least one member using M-PESA and that this increased to 69 percent in 2009. The number of M-PESA agents where cash can be deposited or withdrawn increased from 4,000 in 2008 to 12,000 in 2009. Impact in rural areas has also been significant, with the portion of rural households using M-PESA doubling from 29 percent in 2008 to approximately 60 percent in 2009.

M-PESA is also reaching women, with the portion of females using the program rising from 38 percent in 2008 to 44 percent in 2009. Mr Jack and Ms Suri found that the increased use of M-PESA is correlated the number of remittances, both sent and received. Of those who were M-PESA users and non-users both years, there was little change in the number of remittances sent. But among users who adopted the program between surveys, the frequency of remittances sent increased from 37 percent in 2008 to 55 percent in 2009, with the frequency of remittances received following the same pattern. Mr Jack and Ms Suri concluded that, the program has, contributed to better household financial management and has the capacity to partially protect users from the negative consequences of job loss or business failure [1].

About M-PESA: M-PESA is a Kenyan cellphone-to-cellphone cash transfer service. The M is for “mobile” and pesa is “cash” in Swahili. Launched in 2007 by Safaricom Limited, a Kenya-based cellphone service provider, M-PESA was developed by Vodafone Group Private Limited Corporation, a British multinational mobile network operator, as part of its strategy to reach the bottom of the pyramid with new goods and services.

By Diana Baide, Research Assistant

[1] Mobile Money for the Unbanked. “The adoption and impact of M-PESA: a first look at some new data” by Billy Jack, 29 October 2010

http://mmublog.org/africa-east/the-adoption-and-impact-of-m-pesa-a-first-look-at-some-new-data/

MicroCapital. “MICROFINANCE PAPER WRAP-UP: Saving Through the Mobile Phone: ?The Case of M-PESA, by Olga Morawczynski, Published by Microfinance Information Exchange (MIX)” by Matthew Fox, 28 September 2010

https://www.microcapital.org/microfinance-paper-wrap-up-saving-through-the-mobile-phone-the-case-of-m-pesa-by-olga-morawczynski-published-by-microfinance-information-exchange-mix/

MicroCapital’s Microfinance Universe profile: M-PESA

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=M-Pesa

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