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Kenya’s mobile money, M-Pesa increasing user’s savings – World Bank
Registration for M-Pesa, Kenya’s dominant mobile phone money transfer service, increases the likelihood of having some savings by 20 percent, according to a new World Bank research.
The survey found that 65 percent of M-Pesa users reported having some savings compared to 31 percent of those who were not M-Pesa users.
“This result provides some evidence that M-Pesa may increase the prevalence of savings,” said the World Bank research. “Those who save only with M-Pesa save on average KSh1,305 (US$ 15.80) per month. M-Pesa savings are less than savings with other vehicles but still substantial.”
Those who save only with other accounts save an average of Sh2,282 (US$ 27.60 ) per month while those with M-Pesa and other accounts save Sh2,959 (US$ 35.74).
The difference in amount is driven by the fact that those who save with bank accounts tend to be wealthier and are inclined to save more.
M-Pesa is marking five years as a money transfer service but has grown into a deposit mobilization and savings platform deepening financial inclusion in the country.
“That M-Pesa increases savings may seem surprising, given that it does not pay interest and functions as a mere storage,” reads the report. It explains that the preference for the system stems from the fact that M-Pesa funds are hidden from others making it easier to decline requests to share funds.
