This archive report was first published on 19 January 2020.
Published on January 19, 2020, M-PESA has revolutionized the way Kenyans access and use financial services. In 2006, before the M-PESA innovation, there were only 2.4 million bank accounts in Kenya. Fast forward to 2020, there are over 40 million bank accounts, with over 20 million of them riding on the M-PESA customer base.
Today, Kenyans from all walks of life can send and receive money not only within Kenya but from over 100 countries across the globe. The simplicity and convenience of M-PESA make it ubiquitous, with even 80-year-old grandfathers and grandmothers using the service.
While M-PESA has made it easier for Kenyans to send money to their dependents in rural areas, it has not changed the underlying dynamics of this practice. People were already doing this using bus courier services, money orders, and other methods. M-PESA simply made it more efficient, trustworthy, and convenient.
For example, 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. She no longer has to worry about how long a courier service will take to bring her the money or keep it 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. This is done remotely, without the logistics and headache of organizing physical meet-ups. Thousands of chamas have their payments powered by M-PESA, and tens of thousands of businesses in Kenya are now using M-PESA as their collection platforms.
These businesses are able to collect their money efficiently and build good credit scoring datasets that help them get loans from the formal financial ecosystem. 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.
As a result, different value chains in Kenya use M-PESA to create value for their stakeholders. Households are able to 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.
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.
