Financial Inclusivity: Women Riding on Wave of M-Pesa

Financial Inclusivity: Women Riding on Wave of M-Pesa

Joy Mueni (Riara University, Kenya)
Copyright: © 2020 |Pages: 22
DOI: 10.4018/978-1-7998-2398-8.ch011

Abstract

M-Pesa is a mobile phone-based money transfer system in Kenya that was introduced in 2007 by Safaricom, a subsidiary of Vodafone. Since its inception, the mobile money industry has witnessed some unprecedented growth mainly due to the diverse products, key among them M-Pesa. Powered by the over 100% mobile phone penetration in Kenya, M-Pesa has revolutionized the social and economic lives of Kenyans. In this chapter, using case studies, the author explores the impact M-Pesa has had on women in Kenya. In reference to banking, the author looks at the regulations, polices, and restrictions of M-Pesa against the formal banking industry to understand which is more suited to women and hence its rate of adoption. Another parameter that the author explores is the convenience that M-Pesa guarantees the user and how this has impacted on the effectiveness and efficiency of transactions among women.
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Background

M-Pesa is a mobile phone based money transfer system originating from Kenya which was introduced in 2007 by Safaricom, a subsidiary of Vodafone. Since its inception, the mobile money industry has witnessed unprecedented growth mainly due to the diverse products key among them is M-Pesa. Powered by the over 100% mobile phone penetration in Kenya according to Communication Authority of Kenya (CAK), M-Pesa has revolutionised the social and economic lives of Kenyans and more so to the banking lives of women.

A unique factor of the M-Pesa system is that it empowers users to make electronic payments via ordinary mobile phones without the requirement to connect to online banking using the internet (Katz & Berry, 2014). Users merely need to register at M-PESA retail stores by carrying their national identification (henceforth ID) cards. Users create electronic accounts and link those accounts to their phone numbers and Subscriber Identity Module (henceforth SIM) cards. In addition, users create a private PIN for using when accessing the account. The M-PESA users deposit cash money in the retail stores or using online banking and, they in-turn receive equal float (henceforth e-float). Transactions are confirmed with a notification in the form of an SMS for both users and the retail agent. Through the confirmation and notification, users are able to see new account balance and the retail agent as well remains with the transaction records of the money sent and received (Bosire, 2012).

Katz and Berry, (2014 indicate that the launch of M-PESA was an enormous success as it brought instant benefits to the users, financial institutions and mobile providers. Within a short period of time, M-PESA outperformed Kenya’s bank branches, at 17 million users by the end of 2013. Today, two-thirds of the population actively uses M-PESA, which handles 25% of the national gross domestic product (henceforth NGP). Rightfully so, Jack and Suri (2011), note that the adoption of mobile phones and M-PESA in Kenya occurred at the fastest pace of any consumer-level technology in the history of technology adoption.

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