M-PESA Power: Leveraging Service Innovation in Emerging Economies

Abstract

This case was developed in close collaboration with Sagentia and other collaborating organisations including Vodafone and the Kenyan affiliate Safaricom, along with professionals with expertise in mobile finance in an emerging economy context. The case study is directed at senior undergraduate, MBA, or Masters students in innovation, services, information systems, and IT for development. Students are expected to develop strategic thinking on the discovery of business models, collaborative partnerships, diffusion of innovation, user innovation and new service development.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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Resources

Appendix 1. Number of M-PESA Subscribers, March 2007–April 2009

Figure

Date

No. of subscribers

No. of agent outlets

Mar 2007

Service launched

Apr 2007

52,453

355

Jul 2007

255,708

681

Oct 2007

807,917

1,196

Jan 2008

1,560,607

1,812

Apr 2008

2,373,455

2,606

Jul 2008

3,367,192

3,378

Oct 2008

4,420,279

4,781

Jan 2009

5,478,279

7,304

Apr 2009

6,482,118

9,521

Source: M-PESA Statistics, www.safaricom.co.ke

Appendix 2. Percentage of Unbanked Population in Selected Countries

Country

Unbanked (%)

Data source

Australia

0.8

Cain 2007 1

Bangladesh

96.3

Cain 2007 1

Egypt

77.0

CBC and Visa 2004 2

Germany

2.0

CBC and Visa 2004 2

India

80.0

CBC and Visa 2004 2

Kenya

90.0

Claessens 2006 3

Tanzania

95.0

Claessens 2006 3

Uganda

99.7

Cain 2007 1

United Kingdom

9.0

CBC and Visa 2004 2

Sources

1. Cain, R., 2007. Strategies for banking the unbanked: a global market opportunity. London: VRL KnowledgeBank.

2. Commonwealth Business Council and Visa, 2004. Payment solutions for modernising economies. London: Commonwealth Business Council.

3. Claessens, S., 2006. Access to financial services: a review of the issues and public policy objectives. The World Bank Research Observer, 21 (2): 207–240.

Appendix 3. M-PESA Architecture

Figure

Appendix 4. M-PESA Advertisements

4a.

Figure

4b.

Figure

Appendix 5. Key Stakeholders of M-PESA

Phase 1: Pilot (Oct 2005–May 2006) and exploration

Figure

Phase 2. Launch (Mar 2007) and the initial success

Figure

Phase 3. Expansion and new stakeholders

Figure

Appendix 6. List of the Awards for M-PESA, March 2007–April 2009

Awards title

Category

Date

Recipient

GSMA Global Mobile Awards

Best Mobile Money Service

February 2009

Safaricom & Vodafone

AfricaCom Awards

Best Solution for Rural Services

November 2008

Safaricom

AfricaCom Awards

Changing Lives

November 2008

Safaricom

IET* Innovation Awards

Telecommunications

November 2008

Sagentia

World Business and Development Awards

Award winner

September 2008

Safaricom

Stockholm Challenge Award

Economic Development

May 2008

Safaricom

MCA** Management Awards

Best Private Sector

April 2008

Sagentia

MCA Management Awards

Innovation

April 2008

Sagentia

MCA Management Awards

Technology

April 2008

Sagentia

GSMA Global Mobile Awards

Best Broadcast Commercial

February 2008

Safaricom

Kenya Banking Awards

Special Award for Product Innovation

December 2007

Safaricom

*IET: Institution of Engineering and Technology

**MCA: Management Consultancies Association

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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