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M-PESA mobile banking case examined in After Hours Seminar

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Yesterday Billy Jack of Georgetown University and Claire Alexandre of the Bill and Melinda Gates Foundation delivered a presentation on M-PESA to a packed house and busy webinar audience. Attendees included practitioners working in the USA and those working on USAID-funded projects abroad in the area of mobile banking and economic development.

During the seminar the audience asked Billy and Claire about the reasons for M-PESA's success in Kenya. Both agreed that working with Safaricom, which already had a large market share prior to the launch of M-PESA, gave the company a great advantage but as M-PESA expands to other countries, it will take more time and effort for the company to reach the scale that it reached in Kenya. Billy Jack’s presentation is available here and the screencast of the event will be posted on Microlinks in the coming weeks. Below is some background on M-PESA.

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What is M-PESA?

In 2005, Nick Hughes (Signal Point Partners) and Susie Lonie (Vodacom South Africa) started M-PESA as a mobile money and banking initiative in Kenya. The project was a joint venture between Safaricom, the leading mobile telecommunications company in Kenya, and Vodafone. 

According to the Economist, M-PESA has changed the way money moves around in Kenya and impacted the population by "offering them a safe, secure and low-cost way of transferring money, paying bills, receiving wages and running small businesses." As of September 22, 2010 M-PESA had attracted over 12 million users, or nearly a third of the Kenyan population. M-PESA users now double the less than five million bank accounts in Kenya.

Beyond Kenya

While M-PESA is especially successful in Kenya, with 25,000 agents operating all over the country, the company has expanded operations to Tanzania, Afghanistan, South Africa and currently has a pilot program in India. An the end of 2010, The Bill and Melinda Gates Foundation awarded the company $4.8 million for a program titled M-PESA Tanzania Acceleration Opportunity, with an aim to "increase awareness and usage of the mobile money service, M-PESA, in Tanzania, reaching at least 2 million people in 18 months. It looks to improve the lives of millions of Tanzanians, much like M-PESA is doing in Kenya." M-PESA is also being seen as a model for ten million USAID/Gates Foundation initiative to spur mobile banking systems in Haiti.