Mobile Money and M-PESA have gained a lot of popularity in Kenya because of the major benefits that come with it. The MPESA tariffs are very economical for Kenyans because Kenya is an economically struggling country and mobile money has provided a way to easily use digital money for their daily needs and enjoy a great reduction in transaction costs.
The transaction costs of M-PESA in Kenya have been substantially reduced. The estimated distance to the closest bank was 9.2 km when it was beginning. A mere 1.4 kilometers out from the closest M-PESA agent eight years back in 2015.
As M-PESA tariffs landed, a network of agents was developed that was geographically distributed, ensuring that more citizens were targeted in remote and sparsely inhabited regions. This lead to rapid and widespread acceptance.
Now that mobile cash users are in a position to create more complex risk-sharing networks, it is not shocking that users appear to earn more money from more people relative to non-users. This is especially important as users respond to negative shocks.
Therefore, mobile money consumers are more robust financially and can help defend themselves from economic and other shocks. They may even raise their intake in difficult times. This is critical to bringing households out of deep poverty.
Recent studies also suggest that citizens are more inclined to operate in company or manufacturing than in the subsistence industry in places with significant rises in access to mobile income. Moreover, fewer people recorded secondary jobs in these regions.
A sophisticated market electronic cash network
Kopo Kopo is one such startup that helps companies accept payment for M-PESA services. It is simple to use and affordable; 1% is deducted from the cost. It is easy to enroll and there is no set monthly charge.
Kopo Kopo helps service providers to monitor purchases and to detect industry dynamics and revenue patterns. It is secure and easy to use since it operates on the trustworthy M-PESA network so without your permission, nobody will reverse transactions.
M-PESA has collaborated with the M-Kopa technology company to offer renewable energy solutions to about 3 million Kenyans. You will use M-PESA to use the service while you are a Safaricom customer by buying a solar home lighting system on the purchasing price.
Democratic redistribution of capital
The service has extended far and large to the citizens of the world. To access the M-PESA account, you must be 18 years of age and a Safaricom mobile service user.
The flexibility of the operation renders it appealing also for analphabets and semi-analphabeters who may not normally obtain bank services. M-PESA does not discriminate against a country, group, gender, or individual as long as it has valid identification documentation such as an identity card or a passport and is licensed by any M-PESA agent nationally for service by a farmer, banker or mechanic or even beggar can be accessed easily.
All are free to use the service as a group, a small corporation, or as a person. Since it was launched, M-PESA has been influential to many Kenyans. The creation of a secure, easy-to-use website rendered support for medical or educational reasons simpler.
The effect on poverty mitigation tends to be the product of better financial conduct – with faster and cleaner savings – and improvements in consumer preferences.
Ios wallets provide a convenient way to invest when money is digitally deposited. And mobile money and cell phone can be secured by passwords. Savings may be utilized through tough periods or for profitable ventures such as starting up or developing a small company.
The transmission costs of moving money over broad distances were high before mobile phones. This was valid both in terms of time and financial capital available for transactions.
Higher transaction costs indicated that households were constrained in near proximity to developing risk-sharing networks. This limited the reliability of indirect risk management since many of the network’s households became exposed to the same shocks. Examples of shocks that may impact a population as a whole involve droughts, explosions, crop or animal disease, and floods.
Mobile money makes money transactions over longer distances easier, cheaper, and more efficient. In exchange, mobile money consumers have been able to diversify their informal risk-sharing networks and expand on a broader mutual networking network.
M-PESA lending and investments
M-Shwari, introduced in 2012 in collaboration with CBA Bank and extended in February 2014, is one of the main components of M-PESA. Users can save and borrow money via M-Shwari.
The M-Shwari loans are deemed “good” to customers in a country renowned for its red and brutal money lenders because no collateral is required, transaction fees, and loan applications are handled at once.
The loans are reimbursable within 30 days and carry a fixed interest rate of 7.5%. Ksh will borrow from customers. Twenty thousand (around $240), a large sum in Kenya. The number depends also on how much money users have earned and how often they utilize the program. The interest rate for M-Shwari savings accounts is 5 percent per annum.