More than 60 percent of Kenyans have access to banks or microfinance institutions, but a staggering 38 percent - mostly living in rural areas - are entirely unbanked, according to data collected by Financial Sector Deepening Kenya (FSDK).
However, more than half the population either owns or has access to a cellphone, generating a new means by which banking and financial services could be provided, according to Safaricom’s Chief Financial Officer Les Baillie.
Now this is cool - especially given the figures above about how many Kenyans don’t have bank accounts but do have access to a mobile phone.
M-Pesa users can send up to 35 000 Kenyan Shillings (about R3 800) per transaction and keep up to 50 000 Kenyan Shillings in a “virtual account” for later use.
To use the service, senders hand over funds to a Safaricom shop to be converted into “mobile money” that is “transferred” by text to the recipient, who then withdraws it as cash at another Safaricom shop.
The fees for sending and withdrawing run up to 170 shillings, a mere fraction of the cost charged by other money transfer agencies, which ask for up to 10 percent of the amount being sent.
Although you’ve still got to make the trip to pick up the money, it’s a lot more convenient (and cheaper) than the old methods, like Western Union. (Thanks to SMS Text News reader Malcolm for the tip!)