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M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?

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  • Leo Van Hove

    (Department of Applied Economics (APEC), Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium
    Faculty of Economic Sciences and Management, Nicolaus Copernicus University, Gagarina 13a, 87-100 Toruń, Poland)

  • Antoine Dubus

    (Télécom ParisTech, 46 rue Barrault, 75013 Paris, France)

Abstract

Mobile financial services such as M-PESA in Kenya are said to promote inclusion. Yet only 7.6 per cent of the Kenyans in the 2013 Financial Inclusion Insights dataset have ever used an M-PESA account to save for a future purchase. This paper uses a novel, three-step probit analysis to identify the socio-demographic characteristics of, successively, respondents who do not have access to a SIM card, have access to a SIM but do not have an M-PESA account, and, finally, have an account but do not save on it. We find that those who are excluded in the early stages are predominantly poor, non-educated, and female. For the final stage, we find that those who are in a position to save on their phone—the phone owners, the better educated—are less likely to do so. These results go against the traditional optimistic discourse on mobile savings as a prime path to financial inclusion. As such, our findings corroborate qualitative research that indicates that Kenyans have other needs, and want their money to circulate and ‘work’.

Suggested Citation

  • Leo Van Hove & Antoine Dubus, 2019. "M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?," Sustainability, MDPI, vol. 11(3), pages 1-26, January.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:3:p:568-:d:199876
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