NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Mobile Banking: The Impact of M-Pesa in Kenya

Isaac Mbiti, David N. Weil

Chapter in NBER book African Successes, Volume III: Modernization and Development (2016), Sebastian Edwards, Simon Johnson, and David N. Weil, editors (p. 247 - 293)
Published in September 2016 by University of Chicago Press
© 2016 by the National Bureau of Economic Research
in Research on Africa

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.

This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
Order from Amazon.com

This paper was revised on September 8, 2015

Machine-readable bibliographic record - MARC, RIS, BibTeX

This chapter first appeared as NBER working paper w17129, Mobile Banking: The Impact of M-Pesa in Kenya, Isaac Mbiti, David N. Weil
Users who downloaded this chapter also downloaded these:
Mbiti and Weil w17129 Mobile Banking: The Impact of M-Pesa in Kenya
Jack and Suri w16721 Mobile Money: The Economics of M-PESA
Modigliani Business Reasons for Holding Inventories and Their Macro-Economic Implications
Dupas, Green, Keats, and Robinson w17851 Challenges in Banking the Rural Poor: Evidence from Kenya's Western Province
Jacoby and Weston Factors Influencing Managerial Decisions in Determining Forms of Business Financing: An Exploratory Study
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us