Examining the adoption and usage of mbanking in Kenya: The case of MPESA

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

• Olga Morawczynski
• The University of Edinburgh, UK

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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

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

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The multi-sited study From slum to village

• 6 months in Kibera (slum)
• 3 weeks in Bukura (village)

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The multi-sited studyIntroducing 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

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The multi-sited studyIntroducing Bukura

• Small village in Western provinceone of the most
  impoverished regions in Kenya
• Many depend on subsistence farming
• No formal financial institutions
• 1 M-PESA agent

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Explaining adoption and usage

• Circular migration between city and village
  
• Urban-to-rural remittances

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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

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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.

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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?

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The future

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

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Asante sana

• Olga Morawczynski
• o.morawczynski_at_sms.ed.ac.uk