Disruptive technology, mobile money, and financial mobilization in africa: M-pesa as kenya’s solution to global financial exclusion?

Abstract

The current global financial markets are failing to include and meet the needs of a majority of Africans, particularly those who reside in rural areas, resulting in the significant exclusion of adults from formal financial services. This chapter examines Kenya’s experimentation with M-Pesa, a mobile phone-based money transfer (MMT) service, and its role in fostering financial inclusion and promoting socioeconomic development, for example, bridging the distances between urban and rural areas and the broader citizens. The chapter outlines MMT technology as an innovative and disruptive form of branchless banking and examines the specific factors that were responsible for its success in Kenya. Then, it analyzes the impact of M-Pesa on Kenyan farmers, with a focus on MMT services and food security. The chapter evaluates whether the M-Pesa model can be replicated across the African continent as more countries attempt to enhance their citizens’ access to financial services.