E-Money for Enhancing MDGs at Bottom of the Pyramid: A Case Study of Mpesa Agents in Kenya

Abstract

The general objective of this study was to investigate the implications of mobile money (M-Money) in society and document the experiences of respective service agents. Specifically, this study sought to determine performance and how business partnerships and agent networks had responded to the developments in the m-money economy. Implicit in the study were challenges that the agents face in doing their business, the potential for m-transaction‘s enhancement of MDGs at the bottom of the pyramid and challenges regulators must confound to create a financial inclusive environment. The research used a case study approach. To do this, the study used a triangulation of exploratory and descriptive research design approaches. The target population consisted of MPESA Agents across the country. The sampling technique used was a combination of cluster and convenient sampling. With respect to business partnership and agent networking performance, the study found that KCB commanded a disproportionately large control on provision of the float, followed by Cooperative Bank. In most cases the float was between Ksh 5,000 and Ksh 100,000, and the level of the float increased with the age of the business and it was clear that there was a close correlation between the age of the business and the amount of the float. It was also found that most agents served less than 100 customers per day and there was also a correlation between the age of the business and the number of customers. Other pertinent findings showed that the majority of transactions per customer were below Ksh 20,000 the average age of the customer was between 26 and 40 years of age and most of them were men, even though the majority indicated they served equal numbers of men and women. With respect to business challenges and welfare implications, the study found that fraud was the major challenge followed by a slow system due to network congestion. A challenge cited for not participating in new MKESHO product included technical problems, lack of MKESHO facilities nearby, customer confusion between MKESHO and MPESA, and lack on information. On the issue of welfare implications, respondents felt that the business had improved their welfare through job creation, improved incomes and general livability.