Examining the adoption and usage of m-banking in Kenya The case of by arq31336


									 Examining the adoption
and usage of m-banking in
  Kenya: The case of M-
        Olga Morawczynski
   The University of Edinburgh, UK
      Introducing M-PESA
• M-banking application introduced in March 2007 by
• 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
         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
• 60% of population (1 million)
  in Nairobi live in Kibera
• 17% employed in formal
• Poor social amenities
• No formal financial
  – 7 M-PESA agents
          The multi-sited study:
           Introducing Bukura
• Small village in Western
  province—one of the most
  impoverished regions in
• Many depend on
  subsistence farming
• No formal financial
  – 1 M-PESA agent
                            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-   * Mostly withdrawals-using
                            PESA to send money           M-PESA to receive money

                            * Top-up mobile phone        * Top-up mobile phone
                            * Check balance              * Check balance
                            * Store money                * Store money
Busiest time of year        * End month                  * End month
                            * Beginning of school term   * Beginning of school term
                                                         * Planting and harvesting
Reasons for adoption and    * Cost, speed of transfer,   * Suggested by relative in the
usage                       availability                 city, availability, speed of
Barriers to adoption and    * Problems with M-PESA       * Cash float of agents
usage                       system                       * Technological literacy
                                                         * Problems with M-PESA
  Explaining adoption and usage

• Circular
  between city and
• Urban-to-rural
   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
    – Ideas on the ‘home’: retire
    and are buried in the village
    Explaining adoption and usage

• These relations are vitally important for both
  – 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.
• Success of M-PESA: it fits into already existing
  patterns of urban-to-rural remittances
   – Factors such as cost and availability must also be
• 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
   Asante sana

     Olga Morawczynski

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