Introduction of M-PESA in Kenya
In the current era, the advancement of technology has brought much change to the mobile phone and now the transfer of money is also possible with a mobile phone. This is clear with the introduction of the M-PESA in Kenya. The research is conducted for findings the reason behind the success of the M-PESA in Kenya. The success was mostly carried near by the demographic factors which include ethnicity. The study inspects some of the factors with the accessibility of the resources, affordability and the ease of use of the mobile phones by implementing the M-PESA. The study initiate with the introduction of the M-PESA in Kenya with it uses by the people. Later, there is discussion related to the opportunities which are available and contributed to the success of M-PESA.
The aim of the research is to determine the reason behind the model of M-PESA success in Kenya. The below given are the objectives which will help to encounter the major aim of the research: –
- To explore the meaning and idea of M-PESA
- To determine the reason behind the achievement of the M-PESA in Kenya
- To explore the opportunity of M-PESA in the market of Kenya
According to Mbogo, 2010, M-PESA stands for the M which means mobile and PESA which is the Swahili word that is used in the place of money. M-PESA is a well-known mobile banking system which was initiated and introduced by the mobile service provider Safaricom. Safaricom was having a branch of Vodafone in Kenya. This service permits the customers to make the small transactions with the help of the short message service (SMS) for which there is no need to create the bank accounts.
Considering the viewpoint of the Corkin, 2018, the reason behind the success of the M-PESA in Kenya is the easy processing. It doesn’t include the long procedure and formality due to which it is preferred by the local people of Kenya. The process of the M-PESA is simple and convenient for the customers due to which the customers started adopting this money transfer service. In order to make use of the M-PESA service, a specific needs a nation-wide identity card with a Safaricom SIM card to register. After the registration of the SIM, the local customer can visit the agent through which they can deposit the money, whereby they will get the e-float (M-PESA) in exchange. This electronic money is further exchange by the customer with another M-PESA subscriber in the form of an SMS (Rutten and Mwangi, 2012). The customers can perform the different operations with the use of this electronic money which include payment of bills, sending money to friends and family, payment of school fees and many others.
Factors contributing to the success of M-PESA
Contradicting to the factors, Ngugi, Pelowski and Ogembo, 2010 shared the views in which he said that M-PESA success was possible because of the diverse agent network, low prices, strong connection of mobile and the marketing strategy of the Safaricom. These factors are considered as the innovation model which made the service of M-PESA effective in Kenya. This innovation model is evident with the data of the customers who are using M-PESA. Considering the recent report by GSMA, mobile money for the unbanked programme reflect that 33 million Kenyans make use of mobile phones out of which 26.7 million people have registered mobile service accounts. This has been found through a study that this is no small amount because the population of Kenya is around 45 million with the view of the World Bank.
In addition, the Safaricom M-PESA, 2018 also reflect the growth of the M-PESA was projected to continue considering the present situation of the market. Considering the view shared in the financial report of the Safaricom, it is noted that the services are growing which shows that there is an advantage. The increase in the service is possible with the rise in the use of the internet by the Kenya population since the year 1999 to 2011. The use of the internet is increase which directly affects the growth of M-PESA. There is the opportunity for the growth because of the popularisation of betting services that are present in the country which mainly depends on the solely on the mobile money relocations to control. The company believes that their job is to make the service more available and modest to use. Along with this, the company is willing to confirm that M-PESA leftovers as the number one monetary service partner for Kenya’s.
According to Markovich and Snyder, 2017 one of the reasons which are reflected in the report of Safaricom which leads to the success of M-PESA is hassle-free and easy access. Safaricom rolled out the M-PESA in Kenya which was the largest mobile service provider in the market of East Africa. The company has a huge market share when the services were launched by the company which means that it is accessible for the millions of potential users. Considering the view of the Safaricom CEO Bob Collymore, they put in efforts to conduct the study or research and to make the people convinced that their money is safe and secure. In addition, the services were successful in the market due to the simple operation and access. Along with this, the registration was simple and the cost was cheap which increased the use of the service in the market.
Demographic factors and accessibility of resources
Another Mas and Ng’weno, 2010 shared the views and said that the achievement of M-PESA was unbiased by the demographic factors in the society that exists before the launch of M-PESA in the market. In Kenya, 78% or above population lives in rural areas and 30% of the households mainly rely on the remittance to sustain themselves. In Kenya the transfer of money is considered as one of the common practice with the rise in the demand for the remittance. This has been found in the study, that there are 840 banks in Kenya and the people need to travel a lot to deposit the amount in the banks or to send the money. This was the major reason due to which the people shifted from banks to M-PESA. This reflects that the demographic factors contribute in achieving the success because they accepted the M-PESA for the transfer of money in Kenya.
According to the Ndung’u, 2017, consumer’s preference, trust and believe for the services that are offered by Safaricom were one of the causes behind the success of M-PESA. Along with this, the M-PESA was in demand because of the rise in the ubiquity and affordability of the mobile phones. The brand image of the Safaricom helped them in introducing the service like M-PESA. In addition, the company is considered as one of the well-known brands because it offers their services to 16 million customers and maintains more than 3000 employees. In addition to this, the author stated that another reason due to which the customers started making use of M-PESA was the security of transaction which was done by the customers (Jack and Suri, 2014). The increased protection of the financial services with the help of mobile through laws made the customers to use M-PESA. The law was offered by the Commercial Bank of Kenya (CBK). This leads to the success of the M-PESA in Kenya.
Research methodology is a procedure which is used for collecting the facts and figures because this is the right manner of obtaining the research into the methodological manner. The research method is considered as the organised analysis of the various methods that are specifically implemented in the research study (Taylor, Bogdan and DeVault, 2015). This research study is related to success of M-PESA in Kenya as it consider many research techniques to collect the feasible data like research design, strategy purpose, approaches and other techniques.
Low prices and strong connection of mobile
The research strategy is the way through which the pooling of the facts and figures takes place methodologically. There are various strategies such as interview, literature review, grounded theory, content analysis, and cross-sectional studies which might be used for conducting the research study. For this research study of M-PESA success factors in Kenya, the research strategy that has been used is Literature review. Literature review is executed by the researcher in this study with a motive to attain the aim and objectives of research (Mackey and Gass, 2015). This research strategy will help in exploring different internal sources which can be accessed by the researcher which include news articles, journal articles, books and World Bank reports. Along with this, the external sources are also accessed for the research study of M-PESA which includes internet articles, pdf and other information through the government website. A review of the literature has been exercised which reflects the opinions of the different authors for the success of M-PESA in Kenya.
The research design is another element of the research methodology which is essential to achieve the research in the valid and reliable manner. The three methods that can be used for the research project include mixed, qualitative and quantitative (Lewis, 2015). In this research of the M-PESA in Kenya, there is used of the mixed research design in order to attain the aim and objectives of research because this is the appropriate design which helps in understanding the facts and statistics. The mixed research method includes both the quantitative and qualitative method.
Data collection technique may vary according to the research project but it is essential to consider as this method are used to pool the facts and figures. Considering this research project, the secondary method has been selected by the researcher for analysis on the reason behind the success of the M-PESA in Kenya. This include the different kinds of sources which are used for the gathering the secondary data such as internal and external sources for the study of factors that lead to the success of M-PESA in Kenya (Silverman, 2016). The secondary data is also pooled in this research report with the help of the literature review as this will help in understanding the success factors and opportunities for the M-PESA in Kenya.
The sampling procedure is one of the processes that are mainly used in the research to select the respondents from the large group. The two major sampling techniques that are used in the research study include the non-probability sampling and the probability sampling. These sampling techniques are mainly used to determine the right sources for the secondary research. In this research of M-PESA in Kenya, the researcher has selected the non-profitability sampling technique which is used to gain the depth-understanding for the relevant topic of research study (Smith, 2015). With the intention of the research, 3 articles are used by a researcher as a sample size of research and these selected articles include the review of numerous articles that are valid.
Hassle-free and easy access
The data analysis methodology is advantageous to get the valid and appropriate outcome. In this research for the success factors of the M-PESA in Kenya, there is a need for the appropriate data analysis technique. Considering the research, the researcher has selected the summative content analysis which is implemented to obtain the authentic and useful information for the M-PESA use in Kenya (Saks and Allsop, 2012). The summative content analysis makes the researcher counter and compares the content by describing the fundamental context.
The ethical consideration is linked to the techniques and strategies which are required to be used by the researcher to decrease the probability of the ethical problems (Hair, et al 2015). The secondary method of the research has been adopted by the company for avoiding the ethical concern related to the plagiarism and manipulation. The researcher has kept the confidentiality and privacy related to the participants of the data with respect to the M-PESA. The researcher makes use of the guidelines related to the ethical code of conduct which is prescribed by the university so that the ethical issues can be avoided. For conducing the research for the success of M-PESA, the ethical Consideration act 2010 is used by the research to conduct their research in ethical manner.
The article presents the details related to the success factor of M-PESA in Kenya. From this article, it is found that the use of the M-PESA is increasing in Kenya and in the coming years, it is expected that the use will increase further. The major factor which is discussed in the article is Hassle free and accessible. This is clearly presented in the article that the use of the M-PESA is increasing because it is easy and convenient for the users to register and transfer the amount (Masinde, 2017). Moreover, the customer trust for the security of the amount is one of the factors due to which the use of M-PESA is increasing. Along with this, in the article, there is clear discussion related to the growth of M-PESA in Kenya. The analysis of the article is based on the Safaricom financial report and its efforts towards the service when it first came into the market.
Figure – A Kenyan revolution: more phones than adults
The graphical presentation reflects the rise in the use of the mobile phone which leads to the rise in the use of the M-PESA service. The graphical presentation shows that since the year 1999 there is an increase in the mobile subscriptions and internet subscription till the year 2011. The graphical presentation also reflects that the rise in internet access will make Kenya, a country that has become as one of the most connected and the modern economies in the developing world (Eijkman, Kendall and Mas, 2010).
Brand image and customer trust
The findings are supported by the view of Markovich and Snyder, 2017 which includes the use of the M-PESA which is increasing because of the easy accessibility and registration for the service. Moreover, the strategies which are discussed in the article are supported by the Safaricom financial report that includes all the details related to the new service that is introduced by the company. Along with this, the fact and the use of M-PESA are effectively explained in the article.
(Source: The Economist, 2015)
The image reflects the message which is received by the customers on a mobile phone from M-PESA. The increase in the use of M-PESA has made Kenya a world-leading mobile money system for M-PESA. The article reflects the details related to the origin of the M-PESA system which includes that the service was launched in 2007 by Safaricom. Safaricom is the country’s largest mobile operator and it is currently used by more than 17 million Kenyans which is equal to the two third of the adult population of Kenya. Along with this, the article reflects that data is approx. 25% of the country’s gross national product flow through it (The Economist, 2015). The article shows that in Kenya M-PESA allows the transfer of cash with the use of their phones.
The article presents that M-PESA is the used by Kenya’s for transferring the cash with the use of phones. This system is not only used by the people for transferring the amount but also for paying the amount to the taxi ride (Wamuyu and Maharaj, 2011). The article presents that paying for a taxi ride with the use of mobile phone is easier in Nairobi than it is in New York. The success of the M-PESA in the Kenya market was a matter of the county global profile. The article presents that the people of Kenya are performing each and every activity with the help of the M-PESA.
The findings are supported by the view of Ngugi, Pelowski and Ogembo, 2010, which include the fact that the use of mobile phone is increasing by the people of Kenya and this is clear with the data of the GSMA, in which it is very clear that the 33 million people make use of the mobile services and from this data 26.7 million people have registered themselves on the mobile service account. This shows that the number of people who are making the use of the services is not small that can be neglected by the people. This has been found that the number is expected to increase further with the increase in awareness among the people.
Research methodology
This article presents the views on the success of M-PESA which is possible due to the demographic factors like ethnicity. The paper presents the views for some factors that lead to the success of the M-PESA in Kenya and with this, it includes the availability, resources and the affordability of the mobile phones. The details for the M-PESA are explained in the article which reflects the working of the system. Moreover, it shows the requirement that is required to be fulfilled by the customers in order to make use of the M-PESA. The analysis of the factors reflects that the reason behind the success of this system is the lack of banks. Banks contribute a lot to the development of the country but in Kenya lack of banks in numbers affected the people as they were not able to avail the adequate financial services (Wankiju, 2018).
The financial services play a vital role in Kenya as this system provided the support to the people of Kenya not only in offering the facility for the transfer of money but it provided the support to bring the improvement in the living standard of people, alleviate poverty and also in creating employment (Mbiti and Weil, 2013). As result, the people of Kenya supported the use of M-PESA and the success of the system became the company’s biggest achievement. Safaricom’s brand was able to generate the success, trust of customers, satisfaction, rise in revenue, improvement in the society and culture. This shows that the entire short-term objective of the Safaricom’s gets achieved.
The above image depicts the use of the M-PESA is increasing within Kenya with the use of the mobile phones. This shows that M-PESA has transformed the everyday lives of the most of Kenyans. M-PESA disrupt the traditional banking system and had captured the market where the banks were not available. The article presents the demand for M-PESA is increasing in the market (Jack and Suri, 2014). M-PESA is still in demand in Kenya due to its numerous advantages which include: –
- A fast and convenient transfer of money within the country which is accessible to every person who has the mobile phone.
- Secure and trusted services which are making the people avoid the worries of carrying the cash along with them. This will reduce the risk of theft or loss which is considered one of the major advantages.
- This is found that the banks in Kenya are located in a different place but far away from the local people due to whom the Kenyans people are unable to travel the place. Therefore, this is the time saving for the users in which they remove the need to travel to banks and to wait in the queues (Demombynes and Thegeya, 2012).
- M-PESA allows the cheap rates that decrease the cost of the financial products which include the lower rates on the microloans.
The findings are supported by the view of Mas and Ng’weno, 2010 which shows that the M-PESA is increasing in demand by the people in Kenya due to lack of the financial banking services in the market. The lack in the banking system was one of the reason due to which the people started making the use of the M-PESA. In addition, the author also presented that the customers are getting numerous benefits due to which they have accepted the use of M-PESA.
Conclusion
In the end, it can be concluded that the increase in the use of the M-PESA was one of the factors due to which the company achieved the success. This research report which includes the research on the factors that leads to the success of the company. These factors include the demographic factor, increase in the use and registration, increase in the safety and security, easy and accessible availability of M-PESA. Along with this, the trusts and believe of the customer was one of the major reason due to which the company was able to meet the success. Though, this is the fact the company has put in efforts to improve the sale of the services offered by them. Moreover, the research on the success factors has been done after considering the views of the different author on the success factors of M-PESA. The paper also includes the findings of the article which supports the opinion of authors. In results, this can be said that the M-PESA received success in Kenya due to which there is an improvement in the living standard of the people.
References
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