M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?
Abstract
:1. Introduction
2. M-PESA Identikit
3. State of the Literature on M-PESA
3.1. Adoption
3.2. Use
3.3. Economic Impact
4. Data
5. Methodology
5.1. Dependent Variables
5.2. Independent Variables
6. Results
6.1. Precondition: SIM Ownership
6.2. M-PESA Adoption
6.3. Saving
6.4. A View Across the Three Steps
7. Conclusions and Policy Implications
Supplementary Materials
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
Appendix A
FII | FinAccess | |
---|---|---|
M-PESA users | 72.7 | 58.7 |
Bank account owners | 28.2 | 27.1 |
Age | ||
15–25 | 22.3 | 25.9 |
26–30 | 17.2 | 17.3 |
31–35 | 13.1 | 12.1 |
36–40 | 12.2 | 10.4 |
41–55 | 20.8 | 16.8 |
Over 55 | 14.4 | 17.5 |
Gender | ||
Female | 62 | 59.1 |
Male | 38 | 40.9 |
Education | ||
No education | 33.3 | 39.0 |
Primary | 39.1 | 36.1 |
Secondary | 25.6 | 22.8 |
College | 2.0 | 2.1 |
Urbanity (Urban = 1) | 36.7 | 35.9 |
Employed | 70.4 | 79.8 |
Wealth | 14.1 | 11.6 |
N | 3000 | 6449 |
Saving on MFS | Saving on a Bank Account | ||||||
---|---|---|---|---|---|---|---|
Urban + Rural | Urban | Rural | Rural, Vulnerable | Urban + Rural | Urban | Rural | |
(1) | (2) | (3) | (4) | (5) | (6) | (7) | |
Outcome equation | |||||||
Age | n.s. | n.s. | n.s. | n.s. | n.s. | * | n.s. |
15–25 | – | – | – | – | – | – | – |
26–30 | 0.0982 | 0.0623 | 0.181 | 0.429 * | 0.437 ** | 0.604 *** | 0.0935 |
(0.92) | (0.45) | (1.05) | (2.06) | (3.19) | (3.62) | (0.35) | |
31–35 | 0.0236 | −0.306 | 0.335 | 0.419 | 0.368 * | 0.285 | 0.552 * |
(0.20) | (−1.66) | (1.92) | (1.92) | (2.43) | (1.37) | (2.29) | |
36–40 | 0.134 | 0.215 | 0.177 | 0.234 | 0.308 | 0.315 | 0.419 |
(1.11) | (1.22) | (1.00) | (1.00) | (1.94) | (1.38) | (1.71) | |
41–55 | 0.00117 | 0.0726 | 0.0433 | 0.214 | 0.293 * | 0.323 | 0.373 |
(0.01) | (0.46) | (0.26) | (1.00) | (2.06) | (1.61) | (1.64) | |
Over 55 | −0.318 * | −0.137 | −0.292 | −0.271 | 0.366 * | 0.751 ** | 0.322 |
(−2.12) | (−0.58) | (−1.38) | (−0.83) | (2.28) | (3.21) | (1.27) | |
Gender (Female = 1) | −0.205 ** | −0.185 | −0.272 ** | −0.362 ** | −0.301 *** | −0.415 *** | −0.231 |
(−2.80) | (−1.71) | (−2.62) | (−2.65) | (−3.46) | (−3.40) | (−1.77) | |
Education | *** | * | *** | *** | *** | *** | *** |
Non-educated | – | – | – | – | – | – | – |
Primary | 0.475 *** | 0.371 * | 0.460 ** | 0.396 * | 0.322 * | 0.339 | 0.213 |
(4.36) | (2.03) | (3.21) | (2.27) | (2.43) | (1.48) | (1.20) | |
Secondary | 0.766 *** | 0.594 ** | 0.801 *** | 0.915 *** | 0.790 *** | 0.685 ** | 0.782 *** |
(6.68) | (3.15) | (5.27) | (4.66) | (5.84) | (2.98) | (4.31) | |
College | 0.271 | −0.118 | 0.588 | no variation | 1.316 *** | 1.131 *** | 1.304 *** |
(1.00) | (−0.31) | (1.44) | (6.05) | (3.64) | (3.68) | ||
Wealth | 0.0232 ** | 0.0104 | 0.0333 ** | 0.0403 ** | 0.0135 | 0.0183 | 0.0119 |
(3.26) | (1.00) | (3.26) | (3.02) | (1.61) | (1.47) | (0.98) | |
Family size | −0.0180 | −0.00335 | −0.00408 | 0.00393 | −0.0207 | −0.0342 | 0.0193 |
(−1.18) | (−0.13) | (−0.20) | (0.15) | (−1.14) | (−1.15) | (0.86) | |
Constant | −2.05 *** | −1.64 *** | −2.44 *** | −2.701 *** | −2.382 *** | −2.194 *** | −2.726 *** |
(−12.55) | (−6.64) | (−10.08) | (−8.83) | (−11.79) | (−7.01) | (−8.74) | |
Pseudo R2 | 0.0768 | 0.0387 | 0.1102 | 0.1416 | 0.1053 | 0.1037 | 0.1073 |
AIC | 1512.554 | 772.5237 | 736.0625 | 436.1237 | 1030.454 | 564.7305 | 455.7456 |
BIC | 1584.607 | 832.5496 | 802.6262 | 493.7709 | 1102.506 | 624.7564 | 522.3093 |
Log likelihood | −744.277 | −374.261 | −356.031 | −207.06187 | −503.2270 | −270.3652 | −215.8728 |
Observations | 2994 | 1099 | 1895 | 1395 | 2994 | 1099 | 1895 |
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M-PESA Uses | Number | Percentage |
---|---|---|
Own a SIM card | 2454 | 82.0 |
Own or have access to a SIM card | 2832 | 94.6 |
Use M-PESA | 2171 | 72.5 |
Use M-KESHO | 34 | 1.1 |
Use M-SHWARI | 283 | 9.4 |
Mobile money transfers | ||
Withdraw money a | 2303 | 76.9 |
Deposit money | 1868 | 62.4 |
Pay for goods at a store | 54 | 1.8 |
Receive money for regular support | 1235 | 41.2 |
Send money for regular support | 1118 | 37.3 |
Receive money for emergency | 761 | 25.4 |
Send money for emergency | 764 | 25.5 |
Mobile banking | ||
Save money for future purchase/payment | 205 | 6.8 |
Receive a salary | 59 | 2.0 |
Take a loan | 37 | 1.2 |
Receive state aid or pension | 18 | 0.6 |
Buy insurance | 5 | 0.2 |
Urban + Rural (1) | Urban (2) | Rural (3) | Rural (4) | Rural, Vulnerable (5) | |
---|---|---|---|---|---|
Age | ** | ** | ** | n.s. | n.s. |
15–25 | – | – | – | – | – |
26–30 | 0.454 *** | 0.595 *** | 0.392 ** | 0.394 ** | 0.381 ** |
(4.63) | (3.55) | (3.15) | (3.24) | (2.91) | |
31–35 | 0.480 *** | 0.489 ** | 0.497 *** | 0.419 *** | 0.485 *** |
(4.57) | (2.69) | (3.80) | (3.33) | (3.54) | |
36–40 | 0.597 *** | 0.638 ** | 0.599 *** | 0.503 *** | 0.526 *** |
(5.43) | (2.95) | (4.57) | (4.00) | (3.74) | |
41–55 | 0.521 *** | 0.640 *** | 0.534 *** | 0.427 *** | 0.457 *** |
(5.77) | (3.51) | (4.91) | (4.09) | (3.91) | |
Over 55 | 0.203 * | 0.350 | 0.226 * | −0.00383 | 0.166 |
(2.13) | (1.68) | (2.01) | (−0.04) | (1.33) | |
Gender (Female = 1) | −0.165 ** | −0.326 * | −0.116 | −0.201 ** | −0.103 |
(−2.62) | (−2.44) | (−1.59) | (−2.84) | (−1.28) | |
Education | *** | *** | *** | *** | |
Non-educated | – | – | – | – | |
Primary | 0.587 *** | 0.453 ** | 0.568 *** | 0.546 *** | |
(8.59) | (3.22) | (7.02) | (6.15) | ||
Secondary | 1.049 *** | 0.916 *** | 1.011 *** | 0.865 *** | |
(10.77) | (5.36) | (7.94) | (5.87) | ||
College | no variation | no variation | no variation | no variation | |
Wealth | 0.0542 *** | 0.0292 ** | 0.0633 *** | 0.0833 *** | 0.0609 *** |
(9.83) | (2.73) | (9.62) | (13.54) | (8.43) | |
Family size | −0.0316 ** | −0.0881 *** | −0.00953 | −0.0244 * | −0.00922 |
(−3.11) | (−3.57) | (−0.82) | (−2.18) | (−0.74) | |
Constant | −0.295 * | 0.593 *** | −0.606 *** | −0.299 * | −0.637 *** |
(−2.57) | (2.59) | (−4.38) | (−2.29) | (−4.30) | |
Pseudo R2 | 0.1685 | 0.1273 | 0.1708 | 0.1268 | 0.1376 |
AIC | 2351.6 | 642.4 | 1694.0 | 1788.1 | 1469.9 |
BIC | 2417.4 | 697.0 | 1754.9 | 1838.0 | 1527.6 |
Log likelihood | −1164.8 | −310.2 | −836.0 | −855.0 | −723.9 |
Observations | 2994 | 1099 | 1895 | 1895 | 1396 |
Urban + Rural | Urban | Rural | Rural, Vulnerable | ||
---|---|---|---|---|---|
M-PESA | Bank Account | M-PESA | M-PESA | M-PESA | |
(1) | (2) | (3) | (4) | (5) | |
Outcome Equation | |||||
Age | *** | *** | * | *** | *** |
15–25 | – | – | – | – | – |
26–30 | 0.202 * | 0.424 *** | 0.334 * | 0.122 | 0.105 |
(2.10) | (4.50) | (2.17) | (0.95) | (0.74) | |
31–35 | 0.319 ** | 0.440 *** | 0.454 * | 0.256 | 0.283 |
(2.92) | (4.36) | (2.37) | (1.80) | (1.68) | |
36–40 | 0.415 *** | 0.618 *** | 0.796 ** | 0.320 * | 0.354 * |
(3.58) | (5.90) | (2.95) | (2.27) | (2.08) | |
41–55 | 0.428 *** | 0.748 *** | 0.287 | 0.483 *** | 0.512 ** |
(4.21) | (7.58) | (1.54) | (3.59) | (3.09) | |
Over 55 | 0.441 *** | 0.737 *** | 0.222 | 0.510 *** | 0.607 ** |
(3.73) | (6.43) | (0.92) | (3.41) | (3.09) | |
Gender (Female = 1) | −0.0527 | −0.422 *** | −0.109 | −0.0496 | 0.0123 |
(−0.78) | (−6.77) | (−0.84) | (−0.60) | (0.13) | |
Education | *** | *** | n.s. | *** | ** |
Non-educated | – | – | – | – | |
Primary | 0.156 | 0.134 | 0.0521 | 0.159 | 0.189 |
(1.94) | (1.35) | (0.27) | (1.64) | (1.56) | |
Secondary | 0.456 *** | 0.764 *** | 0.354 | 0.456 *** | 0.607 ** |
(4.50) | (5.55) | (1.46) | (3.48) | (3.18) | |
College | 0.728 * | 1.951 *** | 0.334 | 4.096 | no variation |
(2.25) | (7.31) | (0.82) | (0.03) | ||
Wealth | 0.0131 * | 0.0191 * | 0.0141 | 0.0135 | 0.00820 |
(2.05) | (2.57) | (1.13) | (1.64) | (0.78) | |
Family size | −0.0108 | −0.0160 | −0.0251 | −0.00431 | 0.000427 |
(−0.89) | (−1.35) | (−0.82) | (−0.33) | (0.03) | |
Selection Equation (SIM ownership) | |||||
Age | 0.0390 * | 0.0388 * | 0.0936 ** | 0.0366 | 0.0212 |
(2.28) | (2.26) | (2.69) | (1.80) | (0.95) | |
Gender | −0.102 | −0.108 | −0.286* | −0.0530 | −0.0574 |
(−1.63) | (−1.72) | (−2.12) | (−0.73) | (−0.72) | |
Education | 0.548 *** | 0.548 *** | 0.461 *** | 0.535 *** | 0.475 *** |
(12.13) | (12.06) | (5.60) | (9.53) | (7.36) | |
Wealth | 0.0539 *** | 0.0528 *** | 0.0305 ** | 0.0619 *** | 0.0598 *** |
(9.96) | (9.70) | (2.87) | (9.52) | (8.34) | |
Family size | −0.0272 ** | −0.0245 * | −0.0810 ** | −0.00792 | −0.00841 |
(−2.73) | (−2.42) | (−3.27) | (−0.68) | (−0.66) | |
Employed | 0.236 *** | 0.255 *** | 0.210 | 0.232 ** | 0.237 ** |
(3.81) | (4.03) | (1.82) | (3.07) | (2.97) | |
athrho | −1.038 | −0.622 ** | −0.395 | −1.070 | −1.028 |
(−1.83) | (−2.59) | (−0.39) | (−1.77) | (−1.35) | |
Chi2 | 5.66 | 4.13 | 0.15 | 4.96 | 2.96 |
p | 0.0173 | 0.0422 | 0.69 | 0.02 | 0.08 |
Log likelihood | −2069.6 | −2484.2 | −623.6467 | −1416.378 | −1176.13 |
Censored | 540 | 540 | 111 | 429 | 404 |
Uncensored | 2454 | 2454 | 988 | 1466 | 992 |
Urban + Rural | Urban | Rural | Rural, Vulnerable | |
---|---|---|---|---|
(1) | (2) | (3) | (4) | |
Outcome equation | ||||
Age | *** | ** | *** | * |
15–25 | – | – | – | – |
26–30 | −0.0484 | −0.0835 | −0.0360 | 0.216 |
(−0.54) | (−0.85) | (−0.30) | (0.89) | |
31–35 | −0.186 | −0.394 ** | −0.0563 | 0.0753 |
(−1.82) | (−2.72) | (−0.41) | (0.28) | |
36–40 | −0.121 | −0.0886 | −0.185 | −0.100 |
(−1.13) | (−0.61) | (−1.42) | (−0.38) | |
41–55 | −0.265 ** | −0.232 | −0.332 ** | −0.147 |
(−2.59) | (−1.62) | (−2.66) | (−0.54) | |
Over 55 | −0.529 *** | −0.400 * | −0.576 *** | −0.580 * |
(−4.20) | (−2.14) | (−3.89) | (−2.03) | |
Gender (Female = 1) | −0.0783 | 0.0182 | −0.108 | −0.278 |
(−0.98) | (0.16) | (−1.15) | (−1.69) | |
Education | n.s. | ** | n.s. | n.s. |
Non-educated | – | – | – | |
Primary | −0.0327 | −0.0362 | −0.214 | −0.0829 |
(−0.18) | (−0.19) | (−1.25) | (−0.22) | |
Secondary | −0.0678 | −0.123 | −0.301 | 0.102 |
(−0.24) | (−0.43) | (−1.15) | (0.16) | |
College | −0.666 | −0.826 * | −0.697 | no variation |
(−1.84) | (−2.37) | (−1.61) | (−0.00) | |
Wealth | −0.0122 | −0.0118 | −0.0214 | −0.00102 |
(−1.05) | (−1.15) | (−1.53) | (−0.03) | |
Family size | 0.00785 | 0.0460 * | 0.00487 | 0.00681 |
(0.53) | (1.97) | (0.32) | (0.28) | |
Selection equation | ||||
Age | 0.0828 *** | 0.102 *** | 0.0965 *** | 0.0954 *** |
(5.25) | (3.47) | (5.05) | (4.41) | |
Gender | −0.104 | −0.189 | −0.0926 | −0.0492 |
(−1.88) | (−1.82) | (−1.40) | (−0.64) | |
Education | 0.520 *** | 0.385 *** | 0.542 *** | 0.548 *** |
(13.48) | (5.80) | (11.08) | (9.23) | |
Wealth | 0.0489 *** | 0.0270 ** | 0.0576 *** | 0.0557 *** |
(10.10) | (3.01) | (9.75) | (8.34) | |
Family size | −0.0318 ** | −0.0681 ** | −0.00572 | −0.00590 |
(−3.18) | (−3.29) | (−0.51) | (−0.46) | |
Employed | 0.245 *** | 0.188 | 0.238 ** | 0.261 ** |
(4.16) | (1.86) | (3.10) | (3.04) | |
athrho | −1.114 * | −1.608 | −1.594 ** | −0.923 |
(−2.30) | (−1.55) | (−2.66) | (−1.06) | |
Chi2 | 4.47 | 2.44 | 5.64 | 0.81 |
p | 0.0345 | 0.1179 | 0.0175 | 0.3680 |
Log likelihood | −2218.225 | −838.3561 | −1345.318 | −1005.425 |
Censored | 861 | 211 | 650 | 592 |
Uncensored | 2133 | 888 | 1245 | 804 |
© 2019 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
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Van Hove, L.; Dubus, A. M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving? Sustainability 2019, 11, 568. https://doi.org/10.3390/su11030568
Van Hove L, Dubus A. M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving? Sustainability. 2019; 11(3):568. https://doi.org/10.3390/su11030568
Chicago/Turabian StyleVan Hove, Leo, and Antoine Dubus. 2019. "M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?" Sustainability 11, no. 3: 568. https://doi.org/10.3390/su11030568