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Examining the adoption and usage of m-banking in Kenya: The case of M-PESA

Examining the adoption and usage of m-banking in Kenya: The case of M-PESA. Olga Morawczynski The University of Edinburgh, UK. Introducing M-PESA. M-banking application introduced in March 2007 by Safaricom Targets unbanked and pre-paid segment Allows for various transactions:

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Examining the adoption and usage of m-banking in Kenya: The case of M-PESA

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  1. Examining the adoption and usage of m-banking in Kenya: The case of M-PESA Olga Morawczynski The University of Edinburgh, UK

  2. Introducing M-PESA • M-banking application introduced in March 2007 by Safaricom • Targets unbanked and pre-paid segment • Allows for various transactions: • P2P transfers, deposit and withdraw, check account balance, top-up mobile phone, pay bills • 9 billion Ksh + transferred • Nearly 2 million users (36.9 million population) • 2000 + agents

  3. What explains the rapid growth rate of the M-PESA application?

  4. The multi-sited study: From slum to village • 6 months in Kibera (slum) • 3 weeks in Bukura (village)

  5. The multi-sited study:Introducing Kibera • One of the largest slums in Africa • 60% of population (1 million) in Nairobi live in Kibera • 17% employed in formal sector • Poor social amenities • No formal financial institutions • 7 M-PESA agents

  6. The multi-sited study:Introducing Bukura • Small village in Western province—one of the most impoverished regions in Kenya • Many depend on subsistence farming • No formal financial institutions • 1 M-PESA agent

  7. Explaining adoption and usage • Circular migration between city and village • Urban-to-rural remittances

  8. Explaining adoption and usage • Remittances are sent by urban migrants to maintain relations with the rural area • Structure of family: wives and children remain in the village as men migrate to the city • Inheritance of land: males inherit and invest in the ‘shamba’ • Ideas on the ‘home’: retire and are buried in the village

  9. Explaining adoption and usage • These relations are vitally important for both sides: • For the urbanites- contact with the rural helps them to survive in the city. It provides economic and emotional security. • For the villagers- depend on those in the city to meet basic needs and purchase farm inputs.

  10. Lessons • Success of M-PESA: it fits into already existing patterns of urban-to-rural remittances • Factors such as cost and availability must also be considered • Remittance patterns exist because urban-rural relations need to be maintained • Such relations are vital for the well-being of both the villagers and the urbanites • Would M-PESA work the same in other contexts?

  11. The future • Will remittance patterns change because of M-PESA? • How will this impact urban-rural relations?

  12. Asante sana Olga Morawczynski o.morawczynski@sms.ed.ac.uk

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