Banking in the M-PESA Age - Lessons from Kenya

W. Cook & C. McKay | CGAP

When Safaricom’s mobile money service M-PESA launched in 2007, it immediately became popular and dramatically increased Kenyans’ access to financial services. Due in part to M-PESA’s success, financial inclusion among Kenyans grew from 27 percent in 2006 to over 75 percent in 2016. The narrative around Kenya’s success continues to focus on mobile money, and with good reason. Before M-PESA and the inroads it made for mobile money, inclusion numbers saw only modest growth. This Working Paper explores three approaches banks in Kenya have used to respond to mobile money. Each approach demonstrates that, while nonbank mobile financial services can fundamentally reshape the financial sector in a developing market, as they have clearly done in Kenya, mobile services need not represent an existential threat to the traditional banking industry.

Kenya, Access to Finance, Mobile Banking, Banking
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