Introduction
The reason I chose this topic was when I was a kid, my grandfather had to walk many kilometres to go to the bank and he had leg pain. Since M-Pesa was released, my grandfather doesn’t have to walk anymore and he easily sends and receives money. I got intrigued by M-Pesa and I wanted to know if it impacted other people as it impacted my family.
Another reason why I chose this topic is because according to the World Bank, 75% of the world’s poor population do not have access to some sort of financial establishment. Kenya is among the poor countries, did not have access to a financial establishment. Due to this I wanted to know how Mpesa has changed this lack of financial establishment. The majority of the people in Kenya could not …show more content…
The use of M-PESA has allowed women in fishing communities along Lake Victoria, to save their money and to keep it away from their husbands because the husbands would use the money to buy alcohol.
M-PESA has helped its Company Safaricom a lot. It has made Safaricom a lot of turnover. (Ksong November 17 2016) said in 2014, Safaricom sold roughly 38% of its total airtime through M-Pesa. This translated into savings of 64 million USD in commission fees.
Due to the explosive growth of M-Pesa, Safaricom set up an M-Pesa academy which selects the top students in Kenya who are at a financial disadvantage and gives full scholarships to the students that are accepted.
M-Pesa technology has increased employment as M-Pesa grew bigger, more agents were required to supply the demand of M-Pesa. It has allowed small businesses to start up more easily as M-Pesa can be a substitutes for …show more content…
((Dwilson, S. D. (2015, November 22).
Challenges facing M-PESA
The biggest challenge M-PESA faces is cash flow restraints which is when retailers cannot sometimes meet large withdrawals because they have a specified amount of money for each day. Safaricom also discourages outlets from handling large withdrawals. Especially in the rural areas, where most of the transactions are withdrawals the agents must try to retain their cash float. (A specific amount of money a retailer has to give to customers) The agent has to make frequent trips to the bank and this is a big problem if the agent is not nearby an urban centre where most banks are in Kenya.
Another problem is service availability; Safaricom has only 2000 towers, which is not enough to cover the whole country. There is not enough cell coverage, which is unfortunate as M-Pesa cannot be used.
Another challenge of M-PESA was that the service was very slow. The servers were moved to Germany due to the fact that the system only handled 320 transactions per second which lead to operations being slowed down on the weekends as well holidays.
Future
The reason I chose this topic was when I was a kid, my grandfather had to walk many kilometres to go to the bank and he had leg pain. Since M-Pesa was released, my grandfather doesn’t have to walk anymore and he easily sends and receives money. I got intrigued by M-Pesa and I wanted to know if it impacted other people as it impacted my family.
Another reason why I chose this topic is because according to the World Bank, 75% of the world’s poor population do not have access to some sort of financial establishment. Kenya is among the poor countries, did not have access to a financial establishment. Due to this I wanted to know how Mpesa has changed this lack of financial establishment. The majority of the people in Kenya could not …show more content…
The use of M-PESA has allowed women in fishing communities along Lake Victoria, to save their money and to keep it away from their husbands because the husbands would use the money to buy alcohol.
M-PESA has helped its Company Safaricom a lot. It has made Safaricom a lot of turnover. (Ksong November 17 2016) said in 2014, Safaricom sold roughly 38% of its total airtime through M-Pesa. This translated into savings of 64 million USD in commission fees.
Due to the explosive growth of M-Pesa, Safaricom set up an M-Pesa academy which selects the top students in Kenya who are at a financial disadvantage and gives full scholarships to the students that are accepted.
M-Pesa technology has increased employment as M-Pesa grew bigger, more agents were required to supply the demand of M-Pesa. It has allowed small businesses to start up more easily as M-Pesa can be a substitutes for …show more content…
((Dwilson, S. D. (2015, November 22).
Challenges facing M-PESA
The biggest challenge M-PESA faces is cash flow restraints which is when retailers cannot sometimes meet large withdrawals because they have a specified amount of money for each day. Safaricom also discourages outlets from handling large withdrawals. Especially in the rural areas, where most of the transactions are withdrawals the agents must try to retain their cash float. (A specific amount of money a retailer has to give to customers) The agent has to make frequent trips to the bank and this is a big problem if the agent is not nearby an urban centre where most banks are in Kenya.
Another problem is service availability; Safaricom has only 2000 towers, which is not enough to cover the whole country. There is not enough cell coverage, which is unfortunate as M-Pesa cannot be used.
Another challenge of M-PESA was that the service was very slow. The servers were moved to Germany due to the fact that the system only handled 320 transactions per second which lead to operations being slowed down on the weekends as well holidays.
Future