Banking Beyond Bank Branches: A Case Study of M-Pesa and Financial Inclusion in Kenya (American Scholarly Journal for Scientific Research)

Summary

• Consumption fell by approximately 7% among nonusers after negative income shocks, with no significant decline among users.p.6
• A 2017 survey found 47% of Kenyan digital borrowers repaid late, 12% defaulted and 20% cut food purchases to repay loans.p.9
• M-Pesa was commercially launched by Safaricom in Kenya in March 2007.p.2

Key insights

1. Active customers increased by 10.91 million over five years, about 7.5% compound annual growth (author's calculation).p.4
2. Formal access increased by 58.1 percentage points between 2006 and 2024, while exclusion declined by 31.4 points; these are not M-Pesa market shares.p.5
3. Company customer counts differ from population percentages and do not measure distinct Kenyan adults.p.4
4. Being offered mobile bank accounts raised the transition to high school by approximately five to six percentage points.p.7
5. M-Shwari, introduced in 2012, offered bank savings and loans through the M-Pesa interface.p.7
6. Access to M-Shwari credit reduced the likelihood of forgoing expenses after negative shocks by 6.3 percentage points near the eligibility threshold.p.9
7. Mobile payments and banking appear complementary rather than substitutes.p.8
8. Kenya's National Payments Strategy 2022-2025 prioritised interoperability, security, customer needs and effective regulation.p.10