M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?

Leo Van Hove and Antoine Dubus
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Leo Van Hove: Department of Applied Economics (APEC), Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussels, Belgium
Antoine Dubus: Télécom ParisTech, 46 rue Barrault, 75013 Paris, France

Sustainability, 2019, vol. 11, issue 3, 1-26

Abstract: Mobile financial services such as M-PESA in Kenya are said to promote inclusion. Yet only 7.6 per cent of the Kenyans in the 2013 Financial Inclusion Insights dataset have ever used an M-PESA account to save for a future purchase. This paper uses a novel, three-step probit analysis to identify the socio-demographic characteristics of, successively, respondents who do not have access to a SIM card, have access to a SIM but do not have an M-PESA account, and, finally, have an account but do not save on it. We find that those who are excluded in the early stages are predominantly poor, non-educated, and female. For the final stage, we find that those who are in a position to save on their phone—the phone owners, the better educated—are less likely to do so. These results go against the traditional optimistic discourse on mobile savings as a prime path to financial inclusion. As such, our findings corroborate qualitative research that indicates that Kenyans have other needs, and want their money to circulate and ‘work’.

Keywords: financial inclusion; saving; mobile financial services; M-PESA; Kenya (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:3:p:568-:d:199876

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