This archive report was first published on 19 January 2020.
Published on January 19, 2020, M-PESA has come a long way since its inception, revolutionizing the way Kenyans access financial services. In 2006, before the M-PESA innovation, there were only 2.4 million bank accounts in Kenya, with access to formal financial services being a preserve for a few.
Fast forward to 2020, there are over 40 million bank accounts in Kenya, with over 20 million of them riding on the M-PESA customer base. M-PESA has liberalized access to financial services, making it possible for Kenyans from all walks of life to send and receive money not only within Kenya but from over 100 countries across the globe.
One of the key benefits of M-PESA is its simplicity and convenience. Kenyans in urban areas typically send money to their dependents in rural areas, and M-PESA has made this process more efficient, trustworthy, and convenient. The sender of money in the M-PESA platform receives an alert, creating trust and assurance that the money has been sent, while the receiver also gets an SMS alert marking the end of the financial transaction.
For instance, Mary, a 20-year-old university student, can receive pocket money from her parents in a matter of seconds and use it for her upkeep, without having to worry about how long a courier service will take to bring her the money. She also doesn't have to keep the money in cash, which can get stolen or lost.
M-PESA has also made it easy for Kenyans to fundraise money in different instances, such as paying for hospital bills, school fees, and funeral expenses. A good number of Kenyans have formed WhatsApp groups to raise funds for funeral expenses and raised hundreds of thousands using M-PESA in a matter of days to support their friends and loved ones in dire needs.
Thousands of chamas have their payments powered by M-PESA, making it easy for members to make contributions. Tens of thousands of businesses in Kenya are now using M-PESA as their collection platforms, from Mitumba traders in Gikomba and Muthurwa to global clothing brands in Two Rivers mall to fishermen in Homabay.
M-PESA powered platforms such as Mshwari, KCB-MPESA, and Fuliza have lent over Ksh 600bn to individuals and their businesses since 2012, with Mshwari alone lending up to KES 430 billion since its launch. Before M-PESA was launched, it was difficult for millions of individuals to access loans since their data was not part of the formal financial ecosystem.
Different value chains in Kenya use M-PESA to create value for their stakeholders, including households who can power their electronic devices and light using M-KOPA Solar devices whose payments are made via M-PESA. Over 700,000 farmers have had their lives transformed through the Digifarm platform, where they get quality information for sustainable farming and can purchase inputs via M-PESA or credit payable between 30, 60, or 90 days depending on the credit package a farmer gets.
Safaricom has invested hundreds of billions of Kenya Shilling to build the distribution and operational scalability of the platform, ensuring that over 20 million Kenyans are able to transact in the platform. Over 160,000 agents have created job opportunities for themselves and others from M-PESA business.
