Why is M-Pesa the poster child for financial inclusion?

Mpesa, mobile money transfer tool, is the very best example of success when it comes to financial inclusion.

Mobile banking products have gradually become famous in many developing nations for making debit and credit transfers, bill payments, and online purchases; catering to unbanked population and helping them with local money transfers. And, Mpesa is no different.

Mpesa is almost a decade old mobile money digital wallet which gives the user accessibility of money on mobile phones. It transforms the mobile phone into a bank account and gives one the freedom to transact 24/7. The service is available in Kenya, South Africa, India, Tanzania, Afghanistan and a few other nations.

But why talk about Mpesa alone when there are over 270 mobile banking/digital wallet services out there?

According to Economist, in 2013, 43% of Kenya’s GDP was traded on Mpesa alone! No other country has or can claim such an enormous success. This to me is a reason enough to award it the accolade of being the poster child for mobile money.

No doubt the parent company of Mpesa, Safaricom, conducted proper research and also had the means to do what other nations could not back in 2007 when Mpesa was launched, but as the quote goes ‘A strategy, even a great one, doesn’t implement itself’ So… How did Safaricom do it and what made Mpesa such a huge success?

Several factors were contributing to the success of Mpesa such as monopoly, usability, lenient KYC and of course the marketing.


As per the website of Safaricom, the mobile network provides 3G coverage to over 75% of Kenya’s population, and over 95% of the population has access to 2G coverage. With those statistics, Mpesa was available to everyone who had access to a simple mobile phone. You simply can’t enjoy the monopoly if you are not the only one with the biggest and most extensive infrastructure.


If it is not user-friendly, it is as good as a lost cause.

Mpesa filled the gap which the digital world had created in financial services. To put it simply, in developing nations, hard cash is used by nearly everybody for every transaction. If someone wanted to send money to a relative, s/he would first need a bank account or would need someone to hand deliver it personally. Since it is relatively cumbersome to open a bank account in a developing country, financial service product such as ‘money transfer’ becomes a problem even if its to a relative.

Safaricom introduced a complete package solution that could convert cash into mobile money. By placing agents on almost every street, one could simply walk to an agent and convert their cash to mobile money (or vice versa) and conduct the transaction they wanted to without a lengthy waiting period.

Lenient KYC

You have to meet a particular set of requirements before any bank lets you open an account with them. Proof of residence, income and sometimes an NOC of some sort has to be submitted to the bank. Mpesa did not have any such lengthy KYC requirements to fill because Safaricom was government’s venture and hence the mobile operator could be trusted. Hence, one only needed to be an ID holder to open Mpesa account, making it an instant hit.


Mpesa mobile money service was advertised so very well that it was hard for anyone to miss it. A mobile money transfer tool which is free, requires minimal proof, is available on every block, is instant and solves a host of problems – is bound to be a recipe for success.

Factors such as trust, simplicity, and market reach also paved the way for Mpesa to be successful and Safaricom was able to tackle and turn the biggest problem at that time into an opportunity.

In case you are wondering what the big problem was; it was money transfer.

People living in urban areas of Kenya needed to send money to their families who lived in remote sections. Sadly banks were not accessible in remote areas and had little to offer to low-income earners. What everyone did have was a mobile phone connection with Safaricom, and they had the network and market penetration to bring a digital wallet solution into every home.

With the huge trust factor backing Safaricom, people automatically trusted Mpesa as well. This solution offered a more accessible ‘banking’ option that was not only simple to use, but less discriminative and fit right in with their requirements.

Once transferring money to families became simple, Mpesa became the single most used digital wallet solution across the nation. And, no doubt with the kind of deep pockets and market reach Safaricom had back in 2007, made everything so much smoother.

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