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
TEXT SIZE - +
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

Algerians Vote in Presidential Election

There were few media reports of protests and clashes around the country, but so far no significant violence More

Sharks More Evolved than Previously Thought

The discovery could “profoundly affect our understanding of evolutionary history” More

Pakistan Military Asked to Protect Polio Workers

Request comes as authorities say a Taliban ban on vaccinations in 2012 and deadly attacks on anti-polio teams have prevented thousands of children from getting inoculated 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.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid