Connect with us

Hi, what are you looking for?

Capital Business
Capital Business


MPesa lifts 2pc of Kenyan households out of poverty, study reveals

The growth of the agent network to an estimated 110,000 agents has reduced the distance between households to financial access points like banks from 10 KM to 1.4KM/FILE

NAIROBI, Kenya, Jan 5 – A recent study published by a team from the Massachusetts Institute of Technology reveals 194,000 Kenyan households escaped extreme poverty thanks to access to the M-PESA ecosystem over the last 8 years.

The families represent 2 percent of households in the country with nearly 185,000 women moving out of subsistence farming to business occupations.

Dr. Tavneet Suri, a researcher at MIT, says the study sought to find out how MPESA impacts the average Kenyan life and the extent to which it changes people’s income.

“The first thing we documented is that MPESA has made it cheaper, easier and faster to make transactions, and this improves in resilience. The example we give is when someone got sick in the house, everyone would go look for money to buy medicine, and as a result cut other expenses,” explains Suri.

The study indicates households with mobile money could draw on a wider network of social support, “and they received more remittances more quickly from more different types of people in response to negative shocks.”

The paper titled, The long-run poverty and gender impacts of mobile money, found out mobile money increased the efficiency of the allocation of consumption over time while allowing a more efficient allocation of labor, resulting in a meaningful reduction of poverty in Kenya.

The study also revealed access to the mobile wallets improved access to credit and improved savings ultimately contributing to poverty reduction.

Further, the study found the cost and speed of sending money over long distances have significantly reduced over the period.

The growth of the agent network to an estimated 110,000 agents has reduced the distance between households to financial access points like banks from 10 KM to 1.4KM.

“Mobile money has further facilitated informal risk sharing, which, as well as smoothing consumption, could lead households to adopt higher-risk but higher-return income-earning strategies or occupations; by reducing the cost of long-distance remittances,” states the study.

Advertisement. Scroll to continue reading.
Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...