Mar 6, 2012

How M-PESA is Transforming Kenya's Economy

Today marks 5 years since M-PESA was launched by Safaricom. Within 5 years M-PESA has spread quickly and has become the most successful mobile phone-based financial service in the world.
Within the first month after launch Safaricom registered over 20,000 M-PESA customers. The average number of new registrations per day exceeded 5,000 in August that year and reached nearly10, 000 in December. Today 15 million Kenyans use M-PESA, and have transferred about 20 per cent of National GDP through the system.

The statistics on financial access before the launch of M-PESA in Kenya show that the formal financial system was serving just over a quarter (26.4%) of Kenya’s adult population. Kenya had only 450 bank branches and 600 automatic teller machines, or less than 2 bank branches per 100,000 people. Today M-PESA has over 35,000 agents countrywide, and about 70 per cent of financial transactions are now handled by M-PESA, which is a ubiquitous venue for utility bills, water purchases, farm equipment purchases, payroll, goods and services and international money transfers.

Today over 700 businesses have integrated with M-PESA to extend various innovative services to all Kenyans at lower cost to the people in remote areas.

In agriculture, UAP Insurance and the Syngenta Foundation are offering farmers index-based insurance dubbed Kilimo Salama using M-PESA to collect small premiums and issue payouts. Kickstart is using M-PESA layaway program to enable poor farmers acquire irrigation pumps.

 In health, Changamka Microhealth Ltd. is using M-PESA’s bill pay function to help expectant mothers save for maternity health care.

 In water, Grundfos LIFELINK has leveraged M-PESA to create a fee-for-service model whereby rural communities access safe water and pay for it using M-PESA.

In microfinance, Women Enterprise Fund is using M-PESA to provide easier, faster, efficient and secure loan repayment method.  

In charity, Concern Worldwide is combating severe malnutrition in slums using M-PESA money transfer service to enable people buy food.In business, Kopo Kopo is enabling small and medium sized businesses process M-PESA payments.