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

Video British Fighters on Frontline of Islamic State Information War

It’s estimated that several hundred British citizens are fighting for Islamic State alongside other foreign jihadists More

Pakistan's Political Turmoil Again Shines Spotlight on Military

Thousands of protesters calling for PM Sharif to step down continue protests in front of parliament, as critics fear political impasse could spur another military coup More

Photogallery Ebola Quarantines Spark Anxiety in Liberian Capital

Food prices rise sharply as residents attempting purchases clash with security forces, leaving one person dead 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.
Native Bees May Help Save Cropsi
X
Deborah Block
August 22, 2014 12:23 AM
U.S. President Barack Obama has called for a federal strategy to promote the health of bees that have been declining. The honeybee has been waning due to parasites, disease and pesticides. Wild bees may be used to take over their role as crop pollinators. Scientists first need to learn a lot more about wild bees, says biologist Sam Droege, who is pioneering the first national inventory on native bees. VOA’s Deborah Block went to his research laboratory in Beltsville, Maryland, to bring you more.
Video

Video Native Bees May Help Save Crops

U.S. President Barack Obama has called for a federal strategy to promote the health of bees that have been declining. The honeybee has been waning due to parasites, disease and pesticides. Wild bees may be used to take over their role as crop pollinators. Scientists first need to learn a lot more about wild bees, says biologist Sam Droege, who is pioneering the first national inventory on native bees. VOA’s Deborah Block went to his research laboratory in Beltsville, Maryland, to bring you more.
Video

Video US Defense Officials Plan for Long-Term Strategy to Contain Islamic State

U.S. defense officials say American air strikes in Iraq have helped deter Islamic State militants for the time being, but that a broad international effort is needed to defeat the extremists permanently. Defense Secretary Chuck Hagel warned Thursday that the group formerly known as the Islamic State in Iraq and the Levant, or ISIL, is better organized, and financially and militarily stronger than any other known terrorist group. Zlatica Hoke has more.
Video

Video Drug-Resistant Malaria Spreads in Southeast Asia

On Thailand’s border with Myanmar, also known as Burma, a malaria research and treatment clinic is stepping up efforts to eliminate a drug-resistant form of the parasite - before it spreads abroad. Steve Sandford reports from Mae Sot, Thailand.
Video

Video Gaza Conflict, Hamas Popularity Challenge Abbas

The Palestinian unity government of Mahmoud Abbas has failed to convince Hamas to agree to Egyptian-negotiated terms with Israel on a Gaza cease-fire. VOA State Department Correspondent Scott Stearns reports on what the Gaza conflict means for President Abbas, with whom U.S. officials have worked for years on a two-state solution to the Israeli-Palestinian conflict.
Video

Video Nigeria's 'Nollywood' Movie Industry Rolls in High Gear

Twenty years after its birth in a video shop in Lagos, Nigeria's "Nollywood" is one of the most prolific film industries on earth. Despite low budgets and whirlwind production schedules, Nigerian films are wildly popular in Africa and industry professionals say they hope, in the future, their films will be as great in quality as they are in quantity. Heather Murdock has more for VOA from Lagos.
Video

Video UN Launches 'Biggest Aid Operation in 30 Years' in Iraq

The United Nations has launched what it describes as one of the biggest aid operations in 30 years in northern Iraq, as hundreds of thousands of refugees flee the extremist Sunni militant group calling itself the Islamic State. As Kurdish and Iraqi forces battle the Sunni insurgents, the fighting has forced more people to flee their homes. Kurdish authorities say the international community must act now to avert a humanitarian catastrophe. Henry Ridgwell reports for VOA from London.
Video

Video Cambodian American Hip Hop Artist Sings of Personal Struggles

A growing underground movement of Cambodian American hip hop artists is rapping about the struggles of living in urban America. Most, if not all of them, are refugees or children of refugees who came to the United States from Cambodia to escape the Khmer Rouge genocide of the 1970s. Through their music, the artists hope to give voice to immigrants who have been struggling quietly for years. Elizabeth Lee reports from Long Beach, California.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.

AppleAndroid