19 October 2007
More than 1.6 million Kenyans have now signed up to the mobile phone banking service, M-PESA.
M-PESA (‘mobile money’ in Swahili) is a fast, safe and affordable way to send and receive money through mobile phones without the need for a bank account. The service, which has been in operation for a year, is run by Vodafone subsidiary Safaricom.
Through the Financial Deepening Challenge Fund, DFID helped set up the pioneering service by matching Vodafone’s investment of £1 million. Nick Hughes, Global Head of International Mobile Payment Solutions at Vodafone, says that without DFID support he would not have been able to convince Vodafone to invest in the venture. With no joining fee, monthly charge or minimum balance required, the ‘pay as you go’ service has facilitated $38 million of mobile phone banking transactions and has now become so popular that 2,500 people are signing up every day.
M-PESA targets customers who until now have been excluded from formal bank networks due to their remote location and small transaction volumes. With more than 46% of the population living below the poverty line, the introduction of M-PESA may have huge developmental benefits for poor people in Kenya.
Vodafone has recently launched a trial with CitiGroup to enable international remittances to be sent from people in the UK to friends and relatives in Kenya by mobile phone. The company is also working with the Social Protection Payment Challenge Fund to determine whether M-PESA could be used to distribute social payments to poor families in remote areas.
What are Bookmarks?
DFID around the web:
© Crown copyright 2010