Impact and Rise of Mobile Income Sources (M-PESA) | ICT

Impact and rise of mobile income sources , such as M Pesa in rural area.

Answer:

-M-Pesa (M for mobile, pesa is Swahili for money) is a mobile phone-based money transfer, financing and microfinancing service, launched in 2007 by Vodafone for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania.

-It has since expanded to Afghanistan, South Africa, India and in 2014 to Romania and in 2015 to Albania.

- M-Pesa allows users to deposit, withdraw, transfer money and pay for goods and services (Lipa na M-Pesa) easily with a mobile device.

-The service allows users to deposit money into an account stored on their cell phones, to send balances using PIN-secured SMS text messages to other users, including sellers of goods and services, and to redeem deposits for regular money. Users are charged a small fee for sending and withdrawing money using the service.

-M-Pesa is a branchless banking service; M-Pesa customers can deposit and withdraw money from a network of agents that includes airtime resellers and retail outlets acting as banking agents.

-M-Pesa has spread quickly, and by 2010 had become the most successful mobile-phone-based financial service in the developing world.

- By 2012, a stock of about 17 million M-Pesa accounts had been registered in Kenya. By June 2016, a total of 7 million M-Pesa accounts have been opened in Tanzania by Vodacom. The service has been lauded for giving millions of people access to the formal financial system and for reducing crime in otherwise largely cash-based societies

Impacts of M-Pesa:

-The results indicate that majority (45%) of the Mpesa shops had been in operational between 2 and 3 years. 

-The study established a positive correlation between Mpesa and creation of employment (correlation coefficient of 0.334), Mpesa and access to credit facilities with a coefficient of 0.141 and, Mpesa and income generation with a coefficient of 0.356.

- This shows that Mpesa operation had improved peoples’ livelihood in Bureti Sub County by creating employment opportunities, increasing income generation, access to credit facilities and social capital between families and friends. 

-In order to fully tap the benefits of Mpesa in the area, its services should be extended to all parts of the Sub County, as well as widening the scope of banking services to include provision of micro credits to customers.