Mobile Banking: The Impact of M-Pesa in Kenya
AbstractM-Pesa is a mobile phone based money transfer system in Kenya which grew at a blistering pace following its inception in 2007. We examine how M-Pesa is used as well as its economic impacts. Analyzing data from two waves of individual data on financial access in Kenya, we find that increased use of M-Pesa lowers the propensity of people to use informal savings mechanisms such as ROSCAS, but raises the probability of their being banked. Using aggregate data, we calculate the velocity of M-Pesa at between 11.0 and 14.6 person-to-person transfers per month. In addition, we find that M-Pesa causes decreases in the prices of competing money transfer services such as Western Union. While we find little evidence that people use their M-Pesa accounts as a place to store wealth, our results suggest that M-Pesa improves individual outcomes by promoting banking and increasing transfers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17129.
Date of creation: Jun 2011
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-06-25 (Africa)
- NEP-ALL-2011-06-25 (All new papers)
- NEP-MAC-2011-06-25 (Macroeconomics)
- NEP-MFD-2011-06-25 (Microfinance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Esther Duflo & Michael Kremer & Jonathan Robinson, 2011.
"Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya,"
American Economic Review,
American Economic Association, vol. 101(6), pages 2350-90, October.
- Esther Duflo & Michael Kremer & Jonathan Robinson, 2009. "Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya," NBER Working Papers 15131, National Bureau of Economic Research, Inc.
- Aghion, P. & Howitt, P., 1990.
"A Model Of Growth Through Creative Destruction,"
DELTA Working Papers
90-12, DELTA (Ecole normale supérieure).
- Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
- Edgar L. Feige, 2005. "The Theory And Measurement Of Cash Payments; A Case Study Of The Netherlands," Macroeconomics 0501025, EconWPA.
- Nava Ashraf, 2009. "Spousal Control and Intra-household Decision Making: An Experimental Study in the Philippines," American Economic Review, American Economic Association, vol. 99(4), pages 1245-77, September.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- AusAID needs a Technology for Development Strategy
by Gerard McCarthy in Development Policy Blog on 2013-08-06 20:00:11
- Venet, Baptiste & Arestoff, Florence, 2013. "Learning to walk before you run : Financial Behavior and mobile banking in Madagascar," Economics Papers from University Paris Dauphine 123456789/11979, Paris Dauphine University.
- Graham, Carol & Nikolova, Milena, 2013. "Does access to information technology make people happier? Insights from well-being surveys from around the world," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 126-139.
- Michael King, 2012. "Is Mobile Banking Breaking the Tyranny of Distance to Bank Infrastructure? Evidence from Kenya," The Institute for International Integration Studies Discussion Paper Series iiisdp412, IIIS.
- Allen, Franklin & Carletti, Elena & Cull, Robert & Qian, Jun & Senbet, Lemma & Valenzuela, Patricio, 2013.
"Improving access to banking : evidence from Kenya,"
Policy Research Working Paper Series
6593, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.