Exploring the usage and impact of “transformational” mobile financial services: the case of M-PESA in Kenya

Since its introduction in March of 2007, the M-PESA application has grown rapidly, acquiring a user base of over seven million and an agent network of over ten thousand. Because of its rapid growth, the application has received a significant amount of attention. There have been assertions that it can engender transformational benefits by providing the unbanked with new opportunities to access financial services. There is, however, very little discussion of what these transformational benefits are and how they are brought about. This paper will contribute to filling this gap in the literature. It draws on ethnographic fieldwork conducted over fourteen months in two locations – an informal settlement near Nairobi and a farming village in Western Kenya. It will show that the M-PESA application was utilized for the cultivation of livelihood strategies. Such strategies helped residents to cope with (temporarily adjust) and recover from (longer-term shifts in livelihood strategies) stresses and shocks. It will also explain the outcomes resulting from these strategies. In particular, it will show how M-PESA was utilized for the solicitation and accumulation of financial assets and the maintenance of social networks. Attention will also be given to some of the negative outcomes, or unintended consequences, that were generated through usage.