Do the M-PESA Rails Contribute to Financial Inclusion?

• by Mukesh Sadana, George Mugweru, Joyce Murithi, David Cracknell and Graham Wright
• May 16, 2011
• 1 min
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The Note examines progress towards financial inclusion in Kenya, and concludes that while M-PESA’s rails offer the potential, Kenya may yet have to wait to realise affordable, effective financial inclusion.

A substantial proportion of the Kenyan population is using M-PESA as an addition to bank savings accounts, and less frequently, as a full-scale substitute. The worry among financial inclusion proponents and banks is that poor people will use M-PESA as a substitute for formal institutions. The Note examines progress towards financial inclusion in Kenya, and concludes that while M-PESA’s rails offer the potential, Kenya may yet have to wait to realise comprehensive, commercially sound, affordable and effective financial inclusion.