I have recently been to Kenya and, despite the fact I had already heard about this money transfer system, I was struck by the omnipresence of a mobile money service called M-PESA (meaning “mobile money” in Swahili) . The principle is pretty simple: if you have a mobile phone, you can withdraw or transfer money with your mobile from virtually anywhere in the country.
I am not the first one at all to discover the importance of this system. Since its inception in 2007, many studies have tried to understand the success of M-PESA in Kenya. Most of the time, researchers analysed why such a system was so successful in an African country and not in the rest of the world. They also examined why M-PESA did not know the same success in other African countries such as Tanzania or South Africa.
How does it work? You only need a mobile phone with Safaricom as your operator. As for every phone in the world, you can top up your credit. Now imagine that you have a bank account on your phone as well. Your company can choose to pay you partially by topping up your M-PESA account and giving you some cash. Without the intermediary of a bank, you can also buy items in shops or pay your bills with your mobile phone. Finally, because there are so many M-PESA agents in the country, you can withdraw money from nearly anywhere.
Originally, M-PESA was created to implement micro-finance schemes throughout Kenya but it is currently becoming a bank system. I was lucky to meet the head of the technical services of Safaricom and he explained to me how M-PESA will soon open what looks like “real” bank accounts for its customers. For example, in 2013, customers will be able to borrow money from M-PESA.
Since the beginning of the 2000s, many commentators have talked about the “mobile phone revolution” in Africa. Even if its success is for the moment limited to Kenya, M-PESA is clearly an illustration of the importance of technologies which can foster economic development in Africa.