Kenya's Mobile Revolution and the Promise of Mobile Savings

Examining the evolution of mobile savings in Kenya

This paper examine the mobile savings phenomenon, using data collected in a special survey in late 2010. It shows that the usage of bank-integrated mobile savings systems like M-KESHO remains limited and largely restricted to better-off Kenyans. However, the paper notes that the mobile revolution has transformed the lives of Kenyans, providing not just communications but also basic financial access in the form of phone-based money transfer and storage. This was led by the M-PESA system introduced in 2007. Its findings include:

  • About 93% of Kenyans are mobile phone users and 73% are mobile money customers;
  • Around 23% use mobile money at least once a day;
  • Holding other characteristics constant, those who are registered for M-PESA are 32% more likely to report some savings.

The paper concludes that new potential for mobile money has come with the rise of interest-earning, bank-integrated mobile savings systems, beginning with the launch of the M-KESHO account in March 2010. Moreover, the use of simple mobile money systems as a repository for funds is widespread.