...M-Pesa Kenya stepped into the arena of mobile money transfer services in 2007 through the successful launch of M-PESA by Safaricom1, a mobile network operator (MNO) (Mas and Radcliffe, 2010). Safaricom is the leading mobile network operator (MNO) in Kenya, and an affiliate of Vodafone Group- a British multinational telecommunications company. The mobile phone acts as both a wallet and a bank account. Kenya’s M-PESA is not the first mobile money deployment; however its rate of adoption has been unprecedented. The first sustainable mobile money system was launched by Smart Money, in 2001, in the Philippines. Based on an exchange rate of $/KES 85. M-PESA is a mobile payments system that allows users to make financial transactions such as deposits, withdrawals, bill payments, remittances, and purchase of goods and services by using a mobile phone,2 without requiring a bank account, internet connection, or a payment card. ‘M’ is an acronym for ‘mobile’ and ‘Pesa’ is a Kiswahili word that translates to ‘money’; M-PESA therefore translates to ‘mobile money’. Within 4 years of its launch, M-PESA attained over 15 million service users thus enabling millions of unbanked Kenyans, the majority of whom reside in rural areas, to have access to a 24-hour financial service system. The exceptional growth of M-PESA mobile money service in Kenya since its introduction has spurred a wave of mobile money service deployments across and beyond the African continent.3 Today, Kenya stands...
Words: 2610 - Pages: 11
...UNIVERSITY OF NAIROBISCHOOL OF BUSINESSTHE IMPACT OF MOBILE MONEY SYSTEM INNOVATION ON THE SAVINGS LEVEL OF LOW AND MIDDLE INCOME EARNERS IN KENYABY MASILA JOSHUA MULI D33/32510/2010 VIRGINIA NYAKIO WAIRIMU D33/20134/2009 DECIMA AKOTH OYUKE D33/32014/2010| MUTINDA ELIZABETH MUMBUA D33/32196/2010| | | | | A Research Project Submitted in Partial Fulfillment of the Requirements of the Award of the Degree of Bachelor of Commerce 2013 Table of Contents INTRODUCTION 2 1.1 Background of the study 2 1.2 Problem statement 4 1.3 Objectives of the study 6 1.4 Significance of the study 6 LITERATURE REVIEW 7 2.1 Introduction 7 2.2.2 Buffer stock model 10 2.2.3 Institutional theories 10 2.3.1 Income and savings 11 2.3.2 Reasons for savings 12 2.3.3 Precautionary/emergency reasons 12 2.3.4 Household reasons: 13 2.3.6 The need to save 15 2.3.7 The population structure 16 Methodological review 20 2.6 Summary 21 RESEARCH METHODOLOGY 22 3.1 Introduction 22 3.2 Research Design 22 3.3 Research population 22 3.4 Data Collection 23 3.5 Validity test and reliability test 23 3.6 Data analysis and Presentation 24 DATA ANALYSIS & PRESENTATION OF FINDINGS 26 4.1 Introduction 26 SUMMARY, CONCLUSION AND RECOMMENDATIONS 35 5.1 Summary 35 5.2 Conclusion 36 5.3 Policy Recommendations………………………………………………………………………….37 5.4 Limitations of the study …………………………………………………………………………...
Words: 12715 - Pages: 51
...________________ DATE: ______________ MR KINYUA DEPARTMENT OF MOUNT KENYA UNIVERSITY i DEDICATION This work is dedicated to my mother Mrs. Perez Akinyi, and my sister Yvonne Atieno for their support in the course undertaking my research work ii ACKNOWLEDGEMENT I wish to thank the almighty God who has sustained me throughout this project I would also wish to thank my supervisor Mr. Geoffrey Kinyua for his valuable patience and assistance in accomplishing this project I would also wish to thank the technical staff of K.C B jogoo road branch for their help and cooperation iii ABSTRACT With reference to K.C.B this research is carried out to investigate the challenges facing the banking industry in Kenya. The specific objectives are; to investigate whether theft cases in banks are a major problem, to establish if ATM card skimming is a problem to the banking industry in Kenya, to determine if high interest rates are affecting the banking industry in Kenya negatively, to find out if mobile money transfer services are becoming a competition to banks in Kenya. The sample design was stratified random sampling so as to obtain data...
Words: 4741 - Pages: 19
...MOBILE MONEY-TRANSFERS SCHEME “M-PESA” AND ITS IMPACTS IN KENYA AND AFRICA AS A WHOLE. As the developed world begins to rebuild the recently collapsed global financial system, the financial architecture in parts of the developing world is being rapidly transformed. As the costs of mobile phone technology have fallen, and as the technology has been adapted to support financial services, mobile banking innovations have begun to spread across and within poor countries. The low cost, and the widespread unmet demand for financial services, as captured by low rates of bank access, means that mobile banking has the potential to reach remote corners of the socio‐economic, as well as geographic, spectrum. ‘Think of the developing world, and the first thing that springs to mind probably isn't cutting edge technology’, Mobile phone technology has reduced communication costs in many parts of the developing world from prohibitive levels to amounts that are, in comparison, virtually trivial. Nowhere has this transformation been as acute as in sub-Saharan Africa, where networks of both fixed line communication and physical transportation infrastructure are often inadequate, unreliable, and dilapidated. While mobile phone calling rates remain high by world standards, the technology has allowed millions of Africans to leap‐frog the land‐line en route to 21st century connectivity. ‘The success of the technology lies in necessity’, (Seema Desai), Early on in this revolution, cell phone users...
Words: 758 - Pages: 4
...editor Bill Gates Can mobile banking revolutionize the lives of the poor? By Ben Popper We're excited to have Bill Gates as our guest editor in February. Throughout the month, Bill will be sharing his vision of how technology will revolutionize life for the world's poor by 2030 by narrating episodes of the Big Future, our animated explainer series. In addition, we'll be publishing a series of features exploring the improvements in banking, health, farming, and education that will enable that revolution. And while the topics reflect the bets Bill and his wife Melinda are making with their foundation, they've asked us for nothing less than fully independent Verge journalism, which we're more than happy to deliver. Turns out Bill Gates is a pretty confident guy. Nilay Patel, Editor-in-Chief In the village of Sori along the banks of Kenya’s Lake Victoria, fishing has long been the lynchpin of the local economy. Jobs here are largely divided by gender: men catch the fish, and the women process the meat, take it to market, and handle finances. As detailed in a 2012 study from the SIT Graduate Institute, residents of Sori traditionally kept their money at home. Theft was a constant concern, and many of the women interviewed reported their husbands misappropriating their savings. For many, traditional banks were either too far away, or demanded minimum deposits the villagers could not afford. All that changed in 2007 with the introduction of M-PESA, a mobile service that allows Kenyans...
Words: 2583 - Pages: 11
...PGPPM 2013-15 TERM II Term Paper On CORPORATE FINANCE A study on Mobile Banking initiatives taken by Reserve Bank of India (RBI) to enable financial inclusion SUBMITTED BY A Naga Jyoti 1313009 Scope: This term paper envisages to study the major initiatives taken so far by Reserve Bank of India to enable financial inclusion using mobile device and the way forward to take the initiatives to the next level. Financial inclusion is the delivery of financial services at affordable costs to the disadvantaged and vulnerable segments of society. Indian banking sector has been facing severe challenges in bringing these under privileged sections of the society into the formal financial system. More than 70% of the population, in India, live in the rural areas and these people do not have any access to organized banking facilities. Extending the financial services to these unbanked population is a major challenge to the banks as operating cost of providing the services to this population is much higher than the monetary value that is carried by their financial transactions. Several innovative measures have been initiated by RBI to drive growth in financial inclusion like: 1. No-Frills Accounts (NFAs): RBI encouraged the banks to review their existing practices to enable financial inclusion. Banks extended financial services to the unbanked households by opening “no-frills” account (NFAs) with nil or very low minimum balance. Banks have even relaxed Know your Customer...
Words: 2921 - Pages: 12
...Mobile Wallets Alternative to savings accounts ? September 2012 Mobile phones can do almost anything these days "I'm amazed at all the cool stuff I can do with my new phone. Yesterday I sent a photo to my mom, bought some music, watched a movie, trimmed my sideburns and neutered my cat!" Mobile Wallets FINAL.pptx 1 How many of you have received SMS alerts from your bank on your phone? How many of you have a smart feature phone? How many of you have a mobile banking application installed on your phone? How many on you are aware of USSD based mobile services? How many of you have transferred money using mobile banking? Mobile Wallets FINAL.pptx 2 Huge untapped potential for MFS in India Fundamental drivers for adoption of mobile payments in place Transactions on mobile channel remain small '000 cr % of HHs earning > INR 1.5 lac pa % of popln b/w 20-50 yrs of age 150.1 7,100 7,077.5 1 % 54 44 72 46 % 100 0 100 Younger 50 Richer Demographic 0 FY 12 2 High Mobile Penetration # / 100 200 100 0 201 202 2 0 119 150 83 # of subscribers per 100 pop 201 202 2 0 100 83.4 3 Prevalence of Paper Payments % of txns 100 50 0 46 54 50 83 17 e-payments paper payments 1.8 0 NEF T POS (credit & debit) ECS (Debit) Mobile Source: RBI Data, Euromonitor , EIU, BCG Payments Model Mobile Wallets FINAL.pptx 201 202 2 0 3 One reason : lack of consumer awareness Penetration far lower than other payment...
Words: 1265 - Pages: 6
... the Bank extended its operations to Nairobi, which had become the Headquarters of the expanding railway line to Uganda. The next major change in the Bank’s history came in 1958. Grind lays Bank merged with the National Bank of India to form the National and Grind lays Bank (KCB, 2008). Upon independence the Government of Kenya acquired 60% shareholding in National & Grind lays Bank in an effort to bring banking closer to the majority of Kenyans. In 1970, the Government acquired 100% of the shares to take full control of the largest commercial bank in Kenya. National and Grind lays Bank was renamed Kenya Commercial Bank (KCB, 2008). In 1972, Savings & Loan (K) Ltd was acquired to specialize in mortgage finance. In 1997, another subsidiary, Kenya Commercial Bank (Tanzania) Limited was incorporated in Dar-salaam, Tanzania to provide banking services and promote cross-border trading. Since then, three branches, namely, Dar es Salaam, Arusha and Mwanza, have been opened. Today, KCB Group has the widest network of outlets comprising of over 145 branches across the region and over 280 Automated Teller Machines (ATM). KCB Bank Group is composed of Kenya Commercial Bank, a Commercial Bank; S&L, a...
Words: 5596 - Pages: 23
...AGRICULTURAL FINANCE STAGE II Submission In the partial fulfillment of AF Project to Prof. Vaibhav Bhamoriya Future of Payment Services in Rural Areas Submitted By Group 5 Amrita Dokania, Anjali Neha Lakra, Ashish Negi, Bhawna Nirmal, Veeru Kumar Prajapati INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD Introduction Payments are indispensable parts of our daily transactions, be it B2B, B2C or C2C, and be it rural areas or urban areas. Payment system of a country should be “safe, secure, efficient and accessible” owing to its vital role in raising the GDP of a nation. Payments being one of the most important parts of the financial system, different channels that accelerate the process efficiently constitute the focus of the system. Banking industry has witnessed a tremendous growth in the last few decades in terms of volume and the complexities in the banking system. Even if banks have made significant improvements in the recent years for achieving financial viability and profitability there have been concerns regarding reach and serving a huge population of interior areas. There has been a skewed distribution of population i.e. 6000 per bank branch in urban and 24000 in the rural areas. India has approximately 6.4 lakh villages out of which 5 lakh villages are still unbanked because of the operational and structural issues for example viability, long distance, costs etc. Although rural India comprises of 68% of population, it constitutes only 9% of total...
Words: 4047 - Pages: 17
...countries ii Oxford Policy Management Evaluation of Agent Banking Models in different countries Table of contents Table of contents Abbreviations Executive summary Agent banking regulation and impact Permissible agent activities Volume and value of different types of activities Introduction 1 1.1 Analysis of agent banking regulations Colombia 1.1.1 Background & implementation of regulations 1.1.2 Definition of agent, approval by the regulator & types of entities that can be agents 1.1.3 Rules governing exclusivity/non-exclusivity of agents 1.1.4 Permissible activities 1.1.5 Roles and responsibilities & minimum standards 1.1.6 Typical remuneration structure Brazil 1.2.1 1.2.2 1.2.3 1.2.4 1.2.5 1.2.6 Peru 1.3.1 1.3.2 1.3.3 1.3.4 1.3.5 1.3.6 Kenya 1.4.1 1.4.2 1.4.3 1.4.4 1.4.5 1.4.6 India 1.5.1 i iv vi viii x xi 1 3 3 3 4 4 4 5 6 1.2 6 Background & implementation of regulations 6 Definition of agent, approval by the regulator & types of entities that can be agents 7 Rules governing exclusivity/non-exclusivity of agents 7 Permissible activities 8 Roles and responsibilities & minimum standards 8 Typical remuneration structure 9 9 Background & implementation of regulations 9 Definition of agent, approval by the regulator & types of entities that can be agents10 Rules governing exclusivity/non-exclusivity of agents 10 Permissible activities 11 Roles and responsibilities & minimum standards 11 Typical remuneration structure 12 12 Background & implementation of regulations 12 Definition...
Words: 28143 - Pages: 113
...offices at Bishop Magua Centre on Ngong Road, Nairobi. Stephen Mudiari | Nation By JEVANS NYABIAGE jnyabiage@ke.nationmedia.com Posted Monday, November 8 2010 at 16:00 In Summary * Equity financiers scout for buyouts in Kenya as mobile and internet spur innovation Kenya’s tech environment is bustling with innovations driven by mobile telephony and strong entrepreneurial spirit, but access to capital remains a major constraint. This has created a magnet of venture capitalists in Kenya seeking to fund tech startups. Venture Capitalists are investors who scout for promising startups and small businesses with potential for huge profits. Venture Capital funds make money by owning equity in the companies they invest in. Mr Brian Hirman, a co-founder of eVA Fund, says Nairobi is recording high growth of start-ups in digital, ICT, web and mobile. “There’s a lot of entrepreneurship also motivated by Kenyan whiz kids who have studied in the US or Europe. There are lots of bright people with strong digital business ideas,” says Mr Hirman, whose fund has invested in Kenyan tech start-ups. Pitching for cash On October 18, 2010, at the Ihub incubation centre, five venture capital funds listened to pitches from eight startups. The forum was organised by the Kenya ICT Board as follow-up to the $3 million in content grants funded by the World Bank. The Venture Capitalists, or VCs, on the panel were eVA Fund, Fanisi Venture Capital Fund, Africa Media Venture Fund, Grofin, and Open Capital...
Words: 1024 - Pages: 5
...PROLIFERATION OF MOBILE PHONE IN E-COMMERCE Proliferation of Mobile Phone in E-Commerce Gertrude Nyandat Grantham University Abstract This Paper explores five published articles that reiterate the proliferation of mobile phone in E-Commerce and how mobile phone has penetrated in the day to day commerce industry. These articles agree that mobile phone usage is growing at a faster rate its future in E-Commerce is very bright. Zorrille Ltd (Ecommerce article) explained how the field of wireless technology is tremendously increasing. Ferner (2011) gave us 21 ecommerce applications for mobile phone that are being used to facilitate ecommerce, and how businesses are coming up with applications after another to make it easier for them to conduct business. Consumers and businesses are conducting their business on a mobile device through an application (commonly known as apps) that can be downloaded on the mobile device. Once the app is downloaded, users have the power to use the mobile device to make purchases from virtually anywhere. Lui (2011) wrote on the usage of mobile phone and how it is reshaping the E-Commerce virtually anywhere. He explained how living in a constantly connected world makes mobile phone a preferred mode of business. Akei &Mbiti (2010) and Ochieng(n.d) analyzed the impact of mobile phone in our financial transaction and touched on how the African continent has benefited in mobile financial transactions by using M-PESA (“M” stands for mobile; “PESA” stands...
Words: 1677 - Pages: 7
...BANKING IN KENYA BY JOEL WANJOHI D63/73163/2012 A RESEARCH PROPOSAL SUBMITTED AS ASSIGNMENT FOR DFI 513: MASTER OF SCIENCE IN FINANCE, UNIVERSITY OF NAIROBI NOVEMBER 2012 DECLARATION I hereby declare that this proposal is entirely my own composition. It has not been presented in any University or college for examination purposes. All references made to works of other persons have been duly acknowledged. Permission from the author or examining body should be sought before any part of this work is reproduced. Signed: __________________ …………………………………. Reg. No. D63/73163/2012 Date: 25/11/2012 ABSTRACT Agency banking is a new banking concept introduced in Kenya by the Central Bank (CBK). The main objective is to increase financial services outreach and to promote financial inclusion to the un-banked and under-banked population without risking the safety and soundness of the banking system. The concept is also geared towards encouraging financial institutions to use agents in the provision of banking services so as to reduce the cost of financial services and to foster financial inclusion, reach and depth. Commercial Banks worldwide offer similar kinds of services, but they could provide differences in terms of service quality. This paper analyzes past studies regarding service quality improvement in the agency banking sector. The continuing trend to a model of service quality improvement, from personnel counter services to electronic...
Words: 9078 - Pages: 37
...SHOW THE APPLICATION OF THE MARKETING MIX AND EXTENDED MARKETING MIX FOR SERVICES IN A BUSINESS ORGANIZATION OF YOUR CHOICE The marketing mix refers to variables that a marketing manager can control to influence a brand’s sales or market share (Ellis, 2006). The marketer E. Jerome McCarthy proposed the four Ps classification in 1960, which has since been used by marketers throughout the world (Wikipedia, 2014). These variables are summarized as: product, price, promotion, and place (distribution). The 4P’s are also known as product marketing mix because their application is traditionally for marketing of products. Robert F. Lauterborn proposed a four Cs classification in 1990 which is a more consumer-oriented version of the four Ps (Wikipedia, 2014). They are: consumer, cost, communication and convenience. In this discussion we concentrate on McCarthy’s 4P’s. The extended marketing mix is, as the name suggests, an extension of the marketing mix which was traditionally for products (Bhasin, 2014). As services came more into the picture it was seen that the 4p’s could not justify the marketing mix. Bhasin further reports that the extended marketing mix was brought forward by adding the following 3 elements: Process, Physical evidence and People to make the 7P’s. These 3 more elements were necessary to explain the marketing of services. Therefore this extended marketing mix is also known as the service marketing mix. The marketing mix and extended marketing mix can be illustrated...
Words: 2792 - Pages: 12
...The Technical University of Kenya Department of Mathematics and Statistics School of Mathematics and Actuarial Science A report on Acceptance of M-Pesa by all to minimize poverty By: Carlos Mbingo Maundu REG NO. 111/04937 Date:14-10-2014 1. Problem Statement The purpose of this report is to identify the effect that M-Pesa has on the living standards of the people living in Kenya 2. Justification of the study One may expect alternative money transfer methods of different money channeling systems to differ in their efficacy in achieving different goals. Several reports have suggested that since the inception of mobile money transfer, poverty has significantly dropped in Kenya. This findings needed to be carefully interpreted and the accompanying prove of the statement justified. The establishment of M-Pesa in Kenya has usually been regarded as the best means of ensuring that the of Safaricom subscribers can easily transfer money safely from their mobile gadget to another and also carry out transactions like payment of bills electronically. The review of available literature also does not give a precise arid uniform picture about the performance of M-Pesa system in minimizing poverty relative to other money channeling systems. The current state of knowledge about the structure and performance of alternative forms money channeling systems in Kenya thus clearly warrants further investigations, and it was against this background that the present study was...
Words: 815 - Pages: 4
