M-Pesa: A Growing Fintech Power in Kenya

19 April 2024
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M-Pesa's impact on the Kenyan banking market and the North African region in general have been spectacular. Since its inception in 2007, it has developed into a fintech power in the region.

You can use its services for fund transfers, credit and loans, savings accounts, bulk payments, and much more.Forex traders in Kenya also look for forex companies allowing M-Pesa payments to fund their trading accounts conveniently.

M-Pesa as a Leading Digital Payment Service Provider in Kenya

When Vodacom launched M-Pesa in 2007, its primary function was to enable digital payments to non-banking customers in Kenya. Today, it has evolved into a modern fintech with many digital banking services including savings accounts, minor accounts, credit facilities, merchant payment solutions, bulk payments, and so on.

M-Pesa has a total user base of over 3 million retail and business customers. The most widely used business product by M-Pesa is Lipa NA which has around 606,000 users in total.

M-Pesa Retail Services

M-Pesa now offers a wide range of digital banking services to its retail and corporate customers in Kenya. It primarily started as a mobile fund transfer service but has evolved into a fully functional fintech since its inception in 2007.

Send and Receive Money

Millions of people use M-Pesa services to send or receive money in Kenya daily. All you need is to download the mobile app on your smartphone, create an account, and start transactions.

Its users can send or receive money between M-Pesa users and non-users (with different service charges). Each transaction is instant, and users do not need any external banking channels.

M-Shwari Lock Saving Account

Like a conventional banking product, you can also earn interest by depositing your money in the M-Shwari Lock savings account. It's a useful service for customers keeping their savings for longer periods in their M-Pesa digital wallets.

M-Shwari Loan

M-Shwari account lets retail customers borrow money up to KSh 1,000 instantly. However, applicants must go through a verification and approval process before accessing these small loans.

KCB M-Pesa

KCB is another savings and loan service for M-Pesa users. It offers an interest rate on savings of 6.83% currently.

Borrowers can get a loan of up to KSh 1 million with a markup rate of 8.93% currently.

Fuliza - Overdraft Facility

It's a digital overdraft facility for retail and business accountholders that allows borrowers to reuse the overdraft facility as a recurring loan product.

Halal Pesa

It is a relatively newer service offered as a shariah-compliant digital banking product to M-Pesa users in Kenya with the partnership of Gulf African Bank.

M-Pesa Services for SMEs

M-Pesa's growing influence on the corporate sector in Kenya has largely come through its user-friendly and convenient digital banking products for small and medium enterprises (SMEs).

The number of business users rose to almost 500,000 according to a company report by the end of 2022 and over 600,000 by mid-2023. M-Pesa's network of agents, partners, and corporate users is on the rise.

Some of its major digital banking services offered specifically to business users are:

  • Lipa NA MPesa: This service lets customers pay for shopping at different business outlets. Thus, it enables businesses to offer digital payment acceptance services.
  • Business Till: It is an advanced version of the Lipa NA service that allows merchants and businesses to collect Point-of-Sale (POS) payments digitally.
  • Short-Term Paybill: This service allows corporate M-Pesa customers to extend short-term credit facilities to their employees or users for specified purposes.
  • Bulk Payments: Businesses looking to make recurring bulk payments for wages, salaries, taxes, etc. can use the bulk payment service by M-Pesa.
  • Business One Account: It is a single business account that lets corporate customers collect and pay from one account to and from their customers.
  • Pay Business and Online: This service specifically addresses the needs of B2B transactions for sending and receiving online funds.

M-Pesa Facilitating Forex Traders in Kenya

Since M-Pesa allows users to transfer funds to other bank/digital wallet users in Kenya as well as global banks, you can use its services to fund your trading accounts. However, not all forex brokers in Kenya accept direct deposits from M-Pesa.

When searching for forex companies using M-Pesa services in Kenya, make sure to verify their regulatory status approved by the Capital Markets Authority (CMA) of Kenya.

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