examining the adoption and usage of m-banking in kenya: the case of m- pesa olga morawczynski the...
TRANSCRIPT
Examining the adoption and usage of m-banking in Kenya:
The case of M-PESA
Olga MorawczynskiThe 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:– 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
What explains the rapid growth rate of the M-PESA
application?
The multi-sited study: From slum to village
• 6 months in Kibera (slum)• 3 weeks in Bukura (village)
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
• 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
The multi-sited study:Introducing Bukura
The slum The village
Number of daily transactions * 70-185 * 150-200
Customer base * Mostly young men * Mostly women and retirees
Nature of transactions * Mostly deposits-using M-PESA to send money
* Top-up mobile phone* Check balance* Store money
* Mostly withdrawals-using M-PESA to receive money
* Top-up mobile phone* Check balance* Store money
Busiest time of year * End month* Beginning of school term
* End month* Beginning of school term* Planting and harvesting season
Reasons for adoption and usage
* Cost, speed of transfer, availability
* Suggested by relative in the city, availability, speed of transfer
Barriers to adoption and usage
* Problems with M-PESA system
* Cash float of agents* Technological literacy* Problems with M-PESA system
Explaining adoption and usage
• Circular migration between city and village
• Urban-to-rural remittances
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
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.
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?
The future
•Will remittance patterns change because of M-PESA?•How will this impact urban-rural relations?
