The Effect of Mpesa Money Transfer Service on the Socio-Economic Status of the Mpesa Agents: A Case of Nairobi County

Abstract

The core objective of the research was to assess the effect of the Mpesa money transfer service on the socioeconomic status of the Mpesa agents in Nairobi. The specific objectives that guided the study were: to evaluate the effect of Mpesa money transfer service on the socioeconomic status of Mpesa agents in Nairobi County, to assess the effect of Mpesa money transfer service on the standard of living of Mpesa agents in Nairobi County, and to evaluate the effect of Mpesa money transfer service on the saving characteristics of Mpesa agents in Nairobi County. The study employed the use of a descriptive research design. The population under investigation was Mpesa Money transfer agents within Nairobi County who were more than 10,000, but the study used 164 Mpesa agents for its population. The sampling frame of the study consisted of a list of all registered Mpesa agents in Nairobi County that was obtained from Safaricom’s website. Stratified random sampling was used to breakdown the population into 4 strata that included, attendants, supervisors, managers and self-owners. The sample size was established by use of geographical locations that came to 164. The research employed the use of questionnaires and interviews where necessary as the key data collection instruments. The data collected was processed and analyzed using SPSS. Data was analyzed using inferential statistics and descriptive methods of percentages and standard deviations. Coefficient of correlation was employed to determine whether dependent variables correlated with the independent variable. Regression analysis was used to examine the existing relationships between the study variables. The study revealed that there needs to be better marketing and training involved to help consumers understand the capability of Mpesa services, and the government needs to put in place policy measures to ensure that the benefits of mobile banking are evenly distributed across the banking and consumer sectors. Agents seeking to expand their market must be ready to spend a considerable amount of money, time and other resources in order to increase market penetration, as well as set aside funds to improve their distribution and enhance their market communication among other things sectors. The study showed that Mpesa has reduced the overall transaction costs of sending and receiving money thus increasing the freedom, flexibility, and privacy of mobile banking, as well as access to affordable financial services has help individuals in overcoming poverty and increasing their economic growth. The study revealed that agents plays a key role in the adoption of Mpesa services by creating a dense network of agents who convert cash to e-money and vice versa for customers. Agents with less access to formal financial services mainly use Mpesa accounts to keep money, particularly when they are small amounts. The study concludes that Mpesa helps users to manage risk and diversify resources within their existing structures of power and dependency increasing their bargaining power, and it is considered private and provides women especially with partial financial autonomy, which allows them to make financial decisions without asking their husbands. The study concludes that Mpesa provides a safe place to keep money and this is sufficient to increase the agents’ ability to have emergency savings. The study recommends that the government strengthens its ICT platform to encourage better flow and access to information. The ICT platforms can ensure that the information and available systems are not constrained by providing better access to shared service information.