M-PESA mMoney service - impact and usage in Kenya

by Karen Coppock
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CGAP recently published an interesting brief, Poor People Using Mobile Financial Services: Observations on Customer Usage and Impact from M-PESA - about M-PESA in Kenya.

Some interesting tidbits from the brief:

• Money is usually sent from urban to rural areas: as to be expected, most funds are transferred from urban to rural areas with urban residents (generally men) adopting the service and then encouraging their relatives in rural areas (generally women) to use it.

• There are some wrinkles in the service: not all text messages (money transfers) go through and not all rural agents have cash on hand...both of which cause frustration with the service

• Outcomes are mixed:
• positive - increased income levels among rural users, more frequent and smaller transfers, women's empowerment due to ease of requesting and receiving funds and M-PESA acts as a savings account or feeds into a savings account to increase savings and financial security
• negative - men tend to travel home to rural areas less often to deliver funds as they can now do it via their mobile...women back home fear that their husbands will take up "city wives" and stop sending them money or that they will have to share limited funds with these new spouses.

The unexpected result of the technology potentially decreasing rather than increasing existing relationships is an unfortunate finding.  Regardless of the final verdict on this issue, it is important to have a reference point on mMoney usage and impact as mMoney solutions are rapidly spreading across Africa and other developing nations.