The Adoption and Impact of Mobile Banking in Kenya

Tavneet Suri’s research investigates more closely the remarkable rise of M-PESA, the mobile banking service that has spread rapidly across Kenya.

This project will further clarify the impact and influence of M-PESA. As only a small fraction of Kenyans are banked, and given the high costs of transferring money by non-bank means, M-PESA promises to deliver a wide range of financial and cash-management services to a broad swath of people. Until now, these services had been severely limited in their reach.

More than 30% of adult Kenyans now use M-PESA since its introduction in 2007. By employing simple SMS technology and the established communication network of the dominant cell phone company, Safaricom, M-PESA allows for significant sums of money to be stored in phone-based accounts and sent to other users around the country.  Deposits and withdrawals can be made through “agents.”

In 2008, Suri helped to lead a survey of 3,000 households, almost half of which were M-PESA users and agents. Her CFSP research project follows up on that investigation with further surveys that inquire about a range of compelling issues.

Research Questions: 
  • What is the impact of the technology on savings behavior, consumption, risk smoothing, remittances and other financial decisions?
  • How does M-PESA change the network of people with whom individuals interact with financially and their decisions about such things as internal migration?
  • How has the use of technology spread over time and geographically? What determinants of adoption patterns can we isolate?
  • How well do agents manage their cash inventories?
  • More broadly, how important are financial intermediation services for individuals in a developing economy like Kenya’s?
Data Notes: 

Survey Time Frame and Rounds:

  • Start six-month interval surveys, (northern) Summer of 2009
  • Second survey, January 2010
  • Third Survey, July 2010
  • Experimental component of survey, Fall 2009-Fall 2010


  • Households
  • Agents
  • Micro entrepreneurs

Survey size: 4,700 (3,600 households, 500 agents, and 600 micro entrepreneurs [300 assigned to the treatment and 300 to control]).
Sample: Households and agents from districts of Kenya with at least M-PESA agents as well as 600 micro entrepreneurs.


  • Provide incentives for customers of M-PESA to accumulate savings on the M-PESA account by making payments comparable to markets rate of interest on balances held in the accounts and by subsidizing transaction costs of making deposits and withdrawals.
  • Make payment reimbursing half of the transactions costs incurred, to more closely mimic conditions that might be present in a more competitive system.

Read More:

  • Research Brief: The Rise and Impact of M-PESA This research brief is designed to introduce interested readers to some of the most significant studies on M-PESA. It draws primarily on two key studies by William Jack and Tavneet Suri on the impact M-PESA has had on financial services in Kenya. They document how innovative use of this new technology has improved financial services in Kenya. Other notable academic research cited in the brief supports and amplifies their findings.
Financial Sector Deepening (FSD) Kenya