Outreach of M-PESA System in Kenya: Emerging Trends
This paper focuses on the potential trajectory of the agent-based M-PESA system in Kenya.
M-PESA is an agent-assisted, mobile phone-enabled, person-to-person payment and money transfer system. It allows users to store money on their mobile phones in an electronic account and deposit or withdraw money at one of M-PESA’s numerous agent locations. The paper summarizes initial findings on recent trends in the outreach of M-PESA in the study locations. It is based on interviews with M-PESA agents, financial institutions and key community members. Findings include:
- Several layers of operators provide M-PESA services;
- M-PESA is expanding slowly to interior areas, and the volume and number of transactions fluctuate based on the seasons and time of the month;
- Rural and urban differences exist in terms of volume of transactions;
- Collaboration between financial institutions and M-PESA is becoming common to improve services and outreach.
Finally, cash and electronic float shortages among agents, frequent service disruptions, and the inability to record M-PESA transactions in detail limit M-PESA’s effectiveness in meeting client demand on time.
