Community-Level Economic Effects of M-PESA in Kenya: Initial Findings

This study discusses the success of M-PESA in Kenya.

M-PESA is an agent-assisted, mobile phone-based, person-to-person payment and money transfer system that was launched in Kenya on March 6, 2007. It allows users to store money on their mobile phones in an e-account, and deposit or withdraw money in the form of hard currency at one of M-PESA’s numerous agent locations.

M-PESA has scaled up quickly, covering a majority of the geographic area of the country. As of January 2010, M-PESA had 9 million registered users. There was also a phenomenal growth in the number of agents, from 7,000 in March 2009 to almost 17,000 in January 2010. Findings from the first stage of the study indicate that:

• M-PESA affects the economic outcomes of community members, users as well as non-users, through direct and externality effects;
• M-PESA has had positive effects in areas such as local economic expansion, security, capital accumulation and business environment;
• Effects are not visible in all the study communities and among all the population segments within the communities;
• Effects are influenced by gender and location.