Mobile Banking: The Impact of M-Pesa in Kenya
M-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 roughly four 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.
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| Length: | |
| Date of creation: | Jun 2011 |
| Date of revision: | |
| Publication status: | Forthcoming: Mobile Banking: The Impact of M-Pesa in Kenya , Isaac Mbiti, David N. Weil. in African Successes, Volume III: Modernization and Development , Edwards, Johnson, and Weil. 2016 |
| Handle: | RePEc:nbr:nberwo:17129 |
| Note: | ME |
| Contact details of provider: | Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Web page: http://www.nber.org Email: More information through EDIRC
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