M-Banking in Kenya Essay

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Mobile Banking in Kenya Sub-Saharan Africa has been part of the world’s expediential growth of mobile telephone users. According to Gallup World, (Tortora and Rheault, 2011, p. 1) a survey of 17 sub-Saharan Africa countries revealed, “Fifty-seven percent of the adult population -- or more than an estimated 151 million people -- have mobile phones” Ogunlesi and Busari (2012, p. 1) claim that by “2016 there will be a billion mobile phones on the (African) continent.” With the meteoric rise of mobile phone subscribership across sub-Saharan Africa, mobile banking has experienced similar grown in Kenya. By October, 2010, Safaricom and “M-PESA had over 12 million users out of 17 million mobile phone subscribers, representing over 70% penetration of the mobile subscriber market, or 50% of the adult population”. (Gencer, 2011, p. 5) In his National Geographic article, The Invisible Bank: How Kenya has beaten the World in Mobil Money, Ken Banks (2012) heralded the M-PESA platform as revolutionary: In banking and finance, the big ideas in cashless transfers and mobile, flexible exchanges are not to be found in Geneva or London or New York. A revolution in mobile money transfer has occurred, but not in these financial centres. Instead, it’s happened in Kenya, with (Safaricom) M-PESA (p. 1). It is apparent that Safaricom in partnership with Vodaphone, the British multinational mobile phone operator has successfully brought to market the integration of the mobile phone technology into the m-banking platform, know as M-PESA, the “m” for money and “pesa” stands for “cash” in Swahili (Newman, 2012, p.1). The impressive market penetration and adoption rate of the M-PESA money transfer systems transaction grew so rapidly that Safaricom had difficulty meeting demand. (Gencer, 2011, pp. 5-6) The Economist (2009, p.2) reported that according to a study, incomes of

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