Back to database    Mar 02, 2017

Intrapreneurship series tells narratives of large companies that engage in independent social activism by building projects that contribute to local communities. These projects are driven by intrapreneurs who, by adapting entrepreneurial and start-up strategies, add to their companies’ coefficient of innovation. By reinforcing the value of social intrapreneurs, we hope to encourage more companies to engage in employee-driven creative ideation, galvanising intrapreneurs with potential into positive action. Learn more about SEV’s original social intrapreneurship builder.

Cashless Africa, or Kenya’s smash success with mobile money

by Joanne Willemin & Yusuf Jaffar

m-pesaM-PESA is a mobile money transfer service that was launched in Kenya in 2007 by two leading mobile network operators in the country, Vodafone’s Safaricom and Vodacom. The service was designed for people with limited access to or no bank accounts. M-PESA facilitates deposit and withdrawal of money via authorised agents – usually small mobile phone store owners – who convert virtual money to cash. M-PESA is also used for salary, school fee and even traffic fine payments. It is accepted by a wide number of shops as a means of payment too. The transfers are safe as they are secured by a PIN number and confirmation text messages to both the sender and the receiver.

M-PESA, like so many other social innovations, was created as a result of the intrapreneurial initiative of Michael Joseph, Nick Hughes and Susie Lonie of Vodafone UK. They were convinced that mobile phones could improve the standard of living in developing countries in more than one way. At the beginning, their initiative was not supported by the company, which forced them to look for alternative sources of funding. The Department for International Development (DFID) took interest in the project and funded a pilot between October 2005 and May 2006 that promoted utilisation of mobile phones for microfinance repayments. The success of the pilot eventually convinced Vodafone to launch M-PESA via Safaricom in March 2007 as a full-fledged financial service.

Innovation to emulate
In most developing countries, it is challenging to exchange money virtually as few people hold formal bank accounts. Even for those who do have access to banking facilities, travelling long distances to the bank is often inconvenient due to cost and time involved.  Money transfers, however, are necessary as many work away from home and have to send money to their families within or outside the country. Therefore, instant transfers via mobile phones that M-PESA has introduced are the perfect answer, helping people safe transfers at low cost, save time and carry less cash.

Impact to date
Today, M-PESA is one of the world’s leading mobile money systems. It is now part of the daily life for millions of people across Africa, used in a wide variety of situations. In 2016, the company achieved yet another significant milestone, with more than 25 millions registered customers and more than 100,000 authorised agents.

M-PESA has impacted lives by giving large, previously unbanked, communities access to secure financial amenities within a simple framework. Proven areas of impact include financial inclusion with an increase of money circulation, money services and capital accumulation; moreover, notable improvements have been recorded in food security, business expansion and employment opportunities.

M-PESA is also a prime example of the fact that that it is possible to find a profitable and sustainable business model with high social impact. In 2016, with US$41.5bn in revenues, M-PESA accounted for more than 21% of Safaricom’s annual total.

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