M-Pesa, a Kenyan-based mobile money payments and transfer service, celebrates 17 years in operation since its launch in March 2007.
The Safaricom PLC-owned solution, which began in Kenya as a mobile money service, has grown into Africa’s leading all-in-one fintech platform, offering everything from merchant services to savings and loans, which has revolutionized financial inclusion in Kenya and beyond.
Since the launch of M-PESA which was designed to enable remittances, the fintech has revolutionized various aspects of the Kenyan economy transforming the way people conduct financial transactions and access financial services.
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This has seen the fintech gain widespread adoption in Kenya, with 96% of households in the East African country having at least one M-Pesa account.
M-Pesa was developed to transform the way that money is managed and transferred by the average consumer. The strategy the company deployed to achieve this objective rested on the following pillars:
1. Scale (customers and money volume) – the success of M-Pesa rested on the company’s ability to generate a sufficient foundation of users due to the network effect. This was due to not only ensure the future growth of the user base but also to attract enough 3rd-party agents to execute operationally.
2. Low cost to the user – Given the low-income levels of the typical customer and the relatively low ticket sizes of money transfers, a low
transaction cost was critical for adoption to be achieved. The company’s ability to employ such competitive rates rested on this success in driving volume.
3. Product simplicity – With the typical consumer uneducated about certain core banking products, Mpesa had to roll out a simple standardized product to bypass several barriers.
With regard to financial inclusion, M-Pesa has played a pivotal role by providing a convenient and accessible mobile money platform, which has enabled millions of Kenyans, including those in remote and underserved areas, to access formal financial services.
Through the platform, it has empowered individuals to save, send and receive money, pay bills, and access credit, thereby enhancing their economic resilience and opportunities.
Moreover, Mesa has fueled entrepreneurship and economic growth in Kenya. The platform has facilitated the growth of small businesses by providing them with a reliable and efficient means of accepting payments and managing their finances.
It has also fostered innovation and entrepreneurship in the digital economy, with numerous startups and businesses leveraging its infrastructure to create innovative solutions and services.
Additionally, Mpesa has contributed to the efficiency of the Kenyan economy by reducing transaction costs and improving the speed and convenience of financial transactions. This has facilitated trade and commerce, supported supply chains, and boosted overall economic productivity. An analysis by the World Bank found that since its launch in 2007, the fintech platform has contributed 2 percent to Kenya’s GDP, and has created over 185,000 jobs in Kenya.
The company has recorded impressive milestones so far which include;
•Serving 7 African countries such as Kenya, Tanzania, Mozambique, DR Congo, Lesotho, Ethiopia, and Ghana.
•It has grown to over 51 million customers, and 970k+ merchants on its platform, recording $1 billion transacted daily, from 150 million daily transactions
•Also, M-Pesa has recorded $4 billion in annual cross-border transactions, with $6 billion in annual credit disbursed.
Despite its remarkable performance, M-Pesa has continued to be incredibly successful, rolling out and upgrading new features, with no signs of slowing down. With its strategic expansion into new regions, the fintech company is poised to play a pivotal role in enhancing financial inclusion and helping nations overcome economic barriers.