Money-Sharing App Encourages Growth in Kenya


NAIROBI, Kenya — In recent years, a money-sharing app in Kenya has expanded opportunities for economic growth and development. M-PESA is an app made for basic phones that can send and receive money, schedule regular bill payments and top up phone credit. All over the world, people are stuck in poverty because of inaccessible and inadequate financial services. Without banking, people cannot invest in health, education or business ventures, and the economy stagnates.

In 2007, M-PESA was launched by Vodafone in Kenya and Tanzania. In a recent study, economists from the Massachusetts Institute of Technology and Georgetown University partnered with nonprofit Innovations for Poverty Action to analyze the impact of M-PESA in Kenya. The study found that the app is used in 96 percent of households in the country, making the money-sharing app one of the most successful in the world.

When M-PESA was in its early stages of development, its goal was to allow for microfinance loans to be paid by phone. The project quickly broadened to include more general money transfer services. Now, the system operates smoothly throughout Kenya. Users can deposit and withdraw money from an M-PESA account at a Safaricom network location, and transfer money to other users by sending a text from their phone. The app caters to older models of phones as well as smartphones, making it accessible to a larger amount of people.

Since the spread of M-PESA, women have been empowered to control their own finances and economic contributions. In this sense, the study conducted by Innovations for Poverty Action has also added insight to research on gender dynamics regarding household finances in developing countries.

Overall, the introduction of this money-sharing app in Kenya has made the handling of finances easier for a large majority of households and continues to encourage economic growth. The app is affordable and has proven essential to Kenya’s impoverished as they move toward a more economically stable future.

Peyton Jacobsen

Photo: Flickr


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