Establish on 6th March 2007 Vodaphone’s M-PESA (M – Mobile, Pesa – Swahili for money) is Africa’s leading mobile money service with more than 918,500 active agents operating across the Democratic Republic of Congo, Egypt, Ghana, Kenya, Lesotho, Mozambique and Tanzania. 

Next year will be its 15th anniversary, and what 15 years it has been? M-PESA has accomplished more than 15 billion transactions by 2020 and have more than 49,7 million customers. In this article we will provide a short summary of the company’s history, operations and their incredibly positive effects through financial inclusion. 

How does it work? 

Founded by Vodaphone for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania, M-PESA is a mobile phone-based finance and microfinance service which allows its users to deposit money into an account stored on their mobile phones. The user can also send themselves PIN-secured text messages and redeem deposits for regular money. Essentially, it’s revolutionized the way its users send and receive money, and both M-PESA and its customer base are reaping the benefits. 


The companys astounding growth rate has simultaneously produced social benefits, M-PESA’s implementation has brought around 200,000, equating to roughly 2% of the country’s population, out of extreme poverty according to research from Georgetown and MIT University in 2016. 

Their easy access offers a way to take control of their lives to the poorest population. Due to this, the key value of M-PESA it serves the needs of people who had previously been unable to access traditional banks and creates a route to financial freedom. 

Lending & Savings 

The collaboration of the Kenyan Commercial Bank (KCB) and M-PESA has transformed the way Kenyans can gain access to loans. With the majority of loan applicants in Kenya being deemed uncreditworthy due to a lack of credit history, access to finance was a struggle, but the creation of credit scores derived from mobile phone data (M-PESA) has meant that 80% of applicants are now deemed eligible for finance, with an average default rate of 2%. 

KCB M-PESA enables users to contribute to savings directly from their phone. The services allow putting money into a fixed savings account with an interest rate over 6%, or a target savings with a minimum deposit of KES 50. 

M-PESA has launched similar services with other partner banks in Kenya and Tanzania. Therefore, customers have accessed over 1 billion across their lending services.

The FinTech is constantly innovating, looking to support consumer choice and working to educate them on the implications of access to savings and credit. 


On June 20017, M-Akiba a Kenyan government bond sold through M-PESA, was launched. The initiative had the purpose to finance much needed infrastructure construction. Although the launch went not that successful than expected, with only 25% of the target being reached and only 5% of the people who signed up for the bonds purchasing, there were positives to be seen in the fact that 85% off the people who bought the bonds had never bought one before. This is undoubtably a beginning, as it is testament to the theory that Africa’s Fintech market is budding. 


Annual remittance flows too low- and middle-income countries reached a record USD 554 billion in 2019. As of Q3 2020, the global average cost of sending $200 is approximately 6.8%. Whereas remittance costs across African borders or pacific islands remained above 8.5%. It is estimated that these countries lose out on around $30bn each year due to remittance fees. 

Through strong relationships with leading money transfer operators such as Western Union, MoneyGram, World Remit, M-PESA is the destination for over USD 1.5 billion remittances every year. 

World Food Programme, Kenya 

The program was keen to stimulate the local economy around Dadaab and Kakuma refugee camps and reduce dependence on expensive logistics to distribute food aid flown in from abroad. To ensure the food aid vouchers, were being spent as intended on food and water, the WFP used the M-PESA closed loop system, which limited to the spending of aid to specified merchant points. 

M-PESA services can partnership with different social initiatives, such as access to finance, energy, education and healthcare, to improving the livelihoods and financial independence of Africa’s populations. 

With 70% of Africa’s population under the age of 35 the continent is a prime location for FinTech growth, because new generations are more open to technological advancements and the use of innovative applications. Africa, is already the largest adopter of mobile money transfer systems, comprising nearly half of the globe’s registered mobile money customers. Although, success will depend greatly on the ecosystem created by African governments, if the environment is conducive to innovation and technology. These companies that generate access and inclusion are building the path to a more justice and equity society.