"Examining the adoption and usage of m-banking in Kenya The case of"
Examining the adoption and usage of m-banking in Kenya: The case of M- PESA Olga Morawczynski The 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 The multi-sited study: Introducing Bukura • 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 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 season Reasons for adoption and * Cost, speed of transfer, * Suggested by relative in the usage availability city, availability, speed of transfer Barriers to adoption and * Problems with M-PESA * Cash float of agents usage system * 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? Asante sana Olga Morawczynski firstname.lastname@example.org