Ten years of M-PESA transforming lives

As Safaricom marks 10 years since M-PESA’s launch on 6th March, 2007, a new ‘True Earnings’ Report by KPMG, using KPMG’s ‘True Value’ methodology finds that customers have, by far, been the largest financial beneficiaries of the platform.

KPMG performed an evaluation of the social value created by M-PESA using Social Return on Investment principles (SROI). SROI is an open-source, principles-based method used to account for social change created as a result of certain investments or activities. This is one of the methodologies which is central to understanding the ‘True Earnings’ of a company or service.

The ten year study of M-PESA’s impact finds that the Social Value generated by M-PESA grew from Sh83 million in 2007, to Sh184 billion by the end of March 2016. KPMG finds that M-PESA customers were the biggest beneficiary of this social value, receiving a return in value of Sh160 billion as a stakeholder group in the financial year ending 2016.

“Although Safaricom earns growing revenues from the M-PESA product, the social value it has generated for customers continues to exceed the financial benefits to Safaricom in each of the years since its inception,” said Neil Morris, Climate Change & Sustainability Director, KPMG South Africa.

In the last decade, Kenyans have established M-PESA as the world’s leading mobile money platform by leveraging the power of the mobile phone to achieve convenience in different aspects of their lives.

Customers have made savings in time, as well as experienced increased safety and wellbeing as a result of not needing to carry cash. KPMG notes that the only negative impact, experienced by a very small number of stakeholders, was a reduction in wellbeing as a result of spending less time with family members, as they no longer need to receive financial contributions in person.

By 2016, each M-PESA customer had seen social value linked to the use of M-PESA of Sh9,679 in the course of the year, up from Sh3,202 when the product started in 2007.

Over the same period, customers grew from 20,000 in March 2007 to more than 16 million by March 2016, while the value of transactions grew from Sh10.3 million to Sh5.2 trillion over the same period.

“Year after year, the role played by M-PESA in customers’ lives has widened as Kenyans embrace the platform for a greater number of services. Our sustained investment in innovation and technology has enabled our customers to accomplish their goals. Ultimately, we understand that M-PESA’s success is underpinned by our customers’ success,” said Bob Collymore, CEO, Safaricom.

When looking at the magnitude of each of the impacts for stakeholders over the last ten years, The True Earnings report showed that customers saw 63% of the social value experienced to be connected to the financial resilience that comes with receiving and having control over money. The second largest impact at 30% has been in the time and cost saved in using M-PESA compared to the alternatives, while 7% of the impact comes from access to credit and ability to purchase goods that customers would not have ordinarily been able to afford.

The KPMG True Earnings report complements recent findings by economists from MIT and Georgetown University, who found that M-PESA has lifted 194,000 Kenyan households – or 2% of Kenyan households – out of extreme poverty

As a stakeholder group, M-PESA agents experienced the second highest Social Value from M-PESA at Sh20.1 billion in the year ending March 2016. However, when   individually, agents become the greatest beneficiaries of M-PESA’s, experiencing an average social value of Sh13,489 each year in the last ten years.

The number of agents increased from 2,000 in 2007 to more than 101,000 at the end of March 2016, with many agents creating entire businesses out of M-PESA.

Separate findings by Financial Sector Deepening credit M-PESA with the growth of financial inclusion in the country, which grew by more than 50 percent in the last ten years to stand at 75.3% of Kenyans in 2016 . The mobile phone is also the preferred mode of savings in the country, with 60% of Kenyans having their savings in services such as M-PESA, M-Shwari and KCB M-PESA.

The number of active monthly M-PESA customers in the country stands at more than 18 million customers. Globally, Vodafone now offers M-PESA in 9 other countries: Albania, the Democratic Republic of Congo, Egypt, Ghana, India, Lesotho, Mozambique, Romania and Tanzania.

As of the end of December 2016, M-PESA served almost 29.5 million active customers through a network of more than 287,400 agents in the ten countries.  During 2016, the service processed around 6 billion transactions, peaking in December 2016 at 529 transactions every second.

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