Mobile Banking: The Impact of M-Pesa in Kenya / Isaac Mbiti, David N. Weil.

Format:

Book

Author/Creator:

Mbiti, Isaac.

Contributor:

National Bureau of Economic Research.

Weil, David N.

Series:

Working Paper Series (National Bureau of Economic Research) no. w17129.

NBER working paper series no. w17129

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Mobile Banking

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

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.

Notes:

Print version record

June 2011.