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M-PESA - Business developing social innovations

Author: Louise Pulford
Published Date: 22 February 2010

M-PESA is a Safaricom service which allows people to transfer money using their mobile phones. It has revolutionised money transfer in Kenya and significantly reduced levels of financial exclusion, by making it easier, safer and cheaper to send and receive money.


M-PESA is a Safaricom service which allows people to transfer money using their mobile phones. The project was piloted in Kenya and developed by Vodafone and its Kenya subsidiary, Safaricom. The service is available to all Safaricom subscribers, regardless of whether they have a bank account or not. Registration is free and available from M-PESA agents across Kenya. The M-PESA application is installed on SIM cards and works on all handsets.


M-PESA has revolutionised money transfer in Kenya and significantly reduced levels of financial exclusion, by making it easier, safer and cheaper to send and receive money. Piloted in 2004, Safaricom has built on the vast network of existing mobile phone services and kiosks, transforming them into M-PESA agencies where money can be deposited and collected in cash form. M-PESA can be used within different services, including money transfer, bill payment, and in the near future will be accepted as payment on some public transport services. The system prompts more regular loan repayment as customers in hard-to-reach areas have easier access to a means of money transfer. The cashless system also provides security for customers who would otherwise be forced to store their money at home and could potentially allow public service employees, such as transport drivers, to avoid being responsible for cash amounts.


After the success of the pilot, the service was permanently implemented, and, after entering into partnership with Citibank, will operate on a worldwide basis. M-PESA money is becoming increasingly available at ATM’s, which demonstrates its success as a recognised banking service. M-PESA now has over 7 million Kenyan subscribers and 11,000 agents countrywide. M-PESA has developed to an established and widely depended on service in Kenya, with 43% of customers using the service once a month, and over 90% of users agreeing that M-PESA is a safe service to use. With 70% of M-PESA users with at least one bank account as opposed to 40% of non-users, the organisation has successfully increased the number of people using banking services, therefore making an important step towards greater financial inclusion.