M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?
Sustainability, Vol. 11, Nr. 3, 2019, 568
26 Pages Posted: 26 Feb 2019 Last revised: 28 Feb 2019
Date Written: January 22, 2019
Abstract
Mobile financial services such as M-PESA in Kenya are said to promote inclusion. Yet only 7.6 per cent of the Kenyans in the 2013 Financial Inclusion Insights dataset have ever used an M-PESA account to save for a future purchase. This paper uses a novel, three-step probit analysis to identify the socio-demographic characteristics of, successively, respondents who do not have access to a SIM card, have access to a SIM but do not have an M-PESA account, and, finally, have an account but do not save on it. We find that those who are excluded in the early stages are predominantly poor, non-educated, and female. For the final stage, we find that those who are in a position to save on their phone — the phone owners, the better educated — are less likely to do so. These results go against the traditional optimistic discourse on mobile savings as a prime path to financial inclusion. As such, our findings corroborate qualitative research that indicates that Kenyans have other needs, and want their money to circulate and ‘work’.
Keywords: Financial Inclusion, Saving, Mobile Financial Services, M-PESA, Kenya
JEL Classification: I3, D14, E42
Suggested Citation: Suggested Citation