NO KENYAN LEFT BEHIND: THE MODEL OF FINANCIAL INCLUSION THROUGH MOBILE BANKING

Tony Mutsune

Review of Business and Finance Studies, 2015, vol. 6, issue 1, 35-42

Abstract: The importance of widespread access to suitable financial services for the populace in fostering economic vitality is well recognized. Regrettably, much of the developing world experiences a relative scarcity of crucial financial services in rural and semi-urban areas. With estimated mobile devise ownership at over 700 million in Africa, innovative banking solutions such as mobile banking offer potential channels to advance the access frontier in the banking industry. This study examines Kenya’s highly successful money transfer model, M-pesa, in an effort to explore the nature and role of financial inclusiveness in stimulating economic activity. M-pesa allows ordinary Kenyans to send money across the country cheaply and reliably using mobile devises. As such, the stage appears set for a mass adoption by similarly situated countries in the region that are keen to enhance their financial services. Understanding the nature and role of economic dynamism dispensed through financial inclusiveness can be useful for policy prescription and future studies, among other things. To this end, we borrow from a combination of the ideas of velocity circulation of money and a simple diffusion model to develop a framework for empirical study.

Keywords: Mobile Banking; Financial Innovation; Financial Inclusion; Money Velocity (search for similar items in EconPapers)
JEL-codes: E41 E42 G00 G20 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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