#1
M-PESA
In the world of financial technology, few names have left an indelible mark quite like M-PESA. Launched in Kenya in 2007, this mobile money platform revolutionised financial access for millions, empowering individuals, and small businesses with the ability to send, receive, and store money on their phones. More than just a financial tool, M-PESA is a symbol of economic empowerment and inclusion, especially for those previously unbanked. Notably, it is a concept that has been replicated globally, inspiring similar innovations in mobile banking and financial inclusion across the world.
Beyond transforming financial access and inclusivity, M-PESA is positioning itself as a leader in Environmental, Social, and Governance (ESG) efforts, demonstrating that its business model is not only financially sustainable but also socially responsible.
Among the environmental contributions made is the M-PESA Greenpoint Initiative, which actively promotes responsible waste disposal and recycling in communities. In FY 2024 (between March 2023 and April 2024), the program collected over 43,000 kilograms of waste, which was responsibly recycled. Participants in the program redeemed rewards amounting to KES 651,764, reinforcing the idea that sustainable living can be both rewarding and impactful.
Where M-PESA truly shines is in its social contributions, particularly through its commitment to financial inclusion. For many in Kenya and beyond, traditional banking services were inaccessible due to geographical, financial, or systemic barriers. M-PESA has bridged this gap, bringing financial services to over 56.9 percent of its users through non-chargeable transactions. This accessibility has not only improved how individuals manage their money but also how they save and invest, reducing the risks associated with carrying cash and lowering transaction costs.
M-PESA’s role in facilitating government programs has been instrumental in reaching vulnerable populations. Through the Inua Jamii cash transfer program, M-PESA facilitated the disbursement of KES 1.2 billion to 253,000 beneficiaries in FY 2024. In partnership with the government, M-PESA played a crucial role in the Hustler Fund initiative, having provided KES 49.5 billion in savings and credit to 21 million customers in the past year. The platform has become a vital tool for empowering individuals, enabling them to access credit, save, invest, insure, and improve their livelihoods.
M-PESA’s social value continues to grow. In FY 2024 alone, Safaricom generated KES 348 billion in social value, marking a 7.2 per cent year-on-year increase. Customers feel this value most profoundly, with 47 per cent attributing improved money management and savings to M-PESA’s services. Merchants have also benefited significantly, with a 29 per cent increase in social value-add due to the rise in transactions made possible by the platform. These figures underscore the vital role M-PESA plays in driving both individual and community growth.
Beyond financial services, M-PESA’s social responsibility extends through the M-PESA Foundation, which is making a positive impact in sectors such as health, education, and economic empowerment. For instance, the Ndoto Zetu Phase 5 initiative funded 303 proposals, touching the lives of 2 million people in FY 2024. These efforts go far beyond the digital financial realm, demonstrating a holistic commitment to uplifting the communities in which M-PESA operates.
M-PESA’s reach extends to the most marginalised groups, including refugees. Its advocacy for digital and financial inclusion has seen 636,000 registered refugees in Kenya as it seeks to ensure accessibility and empowerment of all, irrespective of their social or legal status. This push towards inclusivity is a powerful testament to M-PESA’s belief in using technology as a force for good.
In the realm of governance, M-PESA’s focus on ethical business practices is unwavering. Customer data privacy and protection are paramount to the financial services provider. M-PESA has implemented robust strategies to safeguard user information, including comprehensive training programs for employees and continuous engagement with regulatory bodies to stay ahead of any legal and compliance operational changes.
M-PESA’s compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) regulations is another crucial aspect of its governance framework. These efforts ensure that M-PESA remains a responsible and ethical player in the financial ecosystem, contributing to a more stable and transparent financial environment.
Additionally, M-PESA’s introduction of parental controls through the M-PESA Go feature exemplifies its commitment to responsible financial behaviour. This tool allows parents to monitor and manage their children’s use of M-PESA, encouraging financial literacy and accountability from an early age. Another innovation, the Pochi La Biashara security feature for small business owners, protects merchants by preventing payment reversals without their approval, separating personal and business wallets, therefore, building trust and security in financial transactions.
M-PESA’s role in financial inclusion and its efforts to improve environmental sustainability and governance make it one of the most forward-thinking in Africa. M-PESA is not just talking about ESG, the financial service embodies it in every aspect of its operations.
Author: Marilene Mercy
Editor: Martin O’Neil
