News / Africa

Development Experts Ring Up Kenya's Mobile Money Success Story

M-Pesa can now be used to directly and easily pay school fees, February 2011
M-Pesa can now be used to directly and easily pay school fees, February 2011

Multimedia

Audio
Nico Colombant

The success of the M-Pesa mobile money system in Kenya is attracting the attention of development experts, aid organizations and companies seeking to replicate its effectiveness.

An award-winning advertisement for M-Pesa shows money flying from a smiling son's mobile phone, handled from his luxurious city desk, into his mother's cell phone, which she keeps in a sash while toiling at a field in the countryside.

"Now you can send M-Pesa fast and safe using Safaricom's new service M-Pesa," says the M-Pesa advertisement. It continues, "It is the new reliable way to send and receive money using your mobile phone. Visit your nearest M-Pesa agent today. Terms and conditions apply."

M-Pesa advertisements have convinced Kenyans they can trust a mobile phone operator for money transfers, February 2011
M-Pesa advertisements have convinced Kenyans they can trust a mobile phone operator for money transfers, February 2011

Mobile money

M stands for mobile and Pesa is Swahili for money. Safaricom, an affiliate of British-based Vodafone, is Kenya's leading mobile network operator.

M-Pesa was initially designed with help from the British Department for International Development as a tool for micro-finance. It was then developed and fine-tuned in Kenya as mobile money for the general population.

Another video circulating on the Internet, with sweeping music and equally sweeping landscapes, is this documentary which praises M-Pesa, now in its fourth year of commercial existence. The movie also tells the story of goat seller Emmanuel Sironga.

"As pastoralists, we have to travel long distances in search of greener pasture," said Sironga. "M-Pesa has made our lives easier."

M-Pesa allows users to send money to others through their mobile phones, and pay more and more items, from bills, to groceries, school fees, hotel bookings and even salaries and taxi fares. Digital amounts are exchanged for cash at any of the 25,000 M-Pesa agents or at banks and ATMs.

Valuable services

Deposits are free, but there are fees attached to transfers and withdrawals. Person-to-person transfers and bill payments cost the equivalent of about 40 cents, while withdrawing money is on a sliding scale. A withdrawal of $100 costs about $1.

But Kenyans have been willing to pay these services, as millions of M-Pesa transactions now take place on a daily basis.

"What has really been lacking are technologies created by Africans for Africans" said G. Pascal Zachary, who teaches a class about technology and development in Africa at Arizona State University. He calls M-Pesa a major success story.

"This is the first example in the digital age of a brand new service technology system being spawned in an African country, so people need to spend a lot of time trying to understand how this happened in a supposedly backward place like Kenya and what does it mean for what other African countries can do to incubate appropriate solutions," said Zachary.

African entrepreneurship

One of those doing just that is William Jack, an associate professor in the Department of Economics at Georgetown University in Washington.

"It is really uplifting to go to Safaricom headquarters in Nairobi and see all these very, very professional, highly qualified Kenyans running the place, many of whom are women by the way," said Jack.

Jack recently co-authored a detailed research paper called "The Economics of M-Pesa."  
While many other companies are trying to develop mobile money across Africa, Jack said several factors have helped Safaricom with M-Pesa, including having a dominant position in
Kenya's voice market. Jack said this gave users confidence in the service.

The economist said Safaricom also has been able to effectively integrate M-Pesa into Kenya's banking system.

Success stories

He is not surprised the Bill and Melinda Gates Foundation has commissioned him to do more M-Pesa research.

"This looks like it might be a way to make people's lives better," said Jack. "I mean, the good thing about it is it is sustainable. People want this stuff. They are willing to pay for it. And so, there is no need for continuing subsidies from outside to sustain it and that is the kind of thing we are looking for in development, sustainable innovations that are valued enough by people to pay for them."

Jack hopes to see similar success in other sectors of Kenya's economy.

"One has the impression that the country does not produce anything else, that it is just mobile telephony. I think we have to remember that there are lots of other sectors of the economy in which a lot of people could be employed, that also need innovation like this."

In an increasingly competitive market for mobile money in Africa, M-Pesa has since been launched in other countries, including Tanzania and more recently, last September, in South Africa. It also now allows customers to transfer money internationally from their accounts to a Visa prepaid card, without needing a bank account. That lifts a barrier many Africans have long faced in making purchases without cash outside their own countries.

You May Like

Will Cuba Follow the Southeast Asia Model?

Decision to restore ties between US and Cuba has some debating whether it will lead to enhancement or regression of democracy for Communist island nation More

Kenyan Designer Finds Her Niche in Fashion Industry

‘Made in China’ fabrics underlie her success More

Report: CIA, Israel's Mossad Killed Senior Hezbollah Commander

The Washington Post story says Imad Mughniyah was killed instantly by a bomb "triggered remotely" from Tel Aviv by Mossad agents More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Jefferson's Library Continues to Impress, 200 Years Lateri
X
Deborah Block
January 31, 2015 12:12 AM
Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Jefferson's Library Continues to Impress, 200 Years Later

Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid