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M-PESA - Technology and Growth

AQA, Edexcel, OCR, IB

Last updated 22 Mar 2021

M-PESA is a mobile payment solution launched in March 2007 and credited with having a significant impact on economic development in Kenya.

  • Launched in 2007, named after Swahili for money (pesa), originally a micro finance project
  • Operated by Safaricom (40% owned by Vodafone)
  • Less than 10% of Kenyans have access to financial services
  • But nine out of ten adults have access to a mobile phone in Kenya
  • By 2009 M-PESA had 6.5 million customers, more recent figure suggests 15.1 million on the system
  • Around 20% of Kenyan GDP washes through the M-PESA system
  • Safaricom is not allowed to make a profit on the interest and neither is the customer
  • Interest earnings go into a charitable M-PESA foundation
  • M-PESA has been very successful in Tanzania but has had less impact in Afghanistan and India
  • Airtel is the main domestic rival, formerly called Zain and now owned by India’s Bharti Airtel,

M-PESA used in myriad different ways - Kenyans pay school fees, collect their salaries, shop for groceries, they buy everything from drinks in beer shacks to airline tickets thanks to mobile money, sending transfers at the push of a few buttons on a mobile telephone. As per capita incomes rise, people will make savings using the system or might be able to take out loans.

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