The African development Bank (AfDB) argues
that M-Pesa, Safari’s mobile payments service, could have
contributed to the increase of inflation in Kenya.

In a recent report addressing the inflation
dynamics in Kenya, the AfDB considers that the increase in money
velocity coincides with the rise in the number of M-Pesa

There are over 16m active users of M-Pesa
mobile money transfer service in Kenya with a cash flow of over
KES50m ($580,000) a day, the company reported last year.

Over $650m is deposited and withdrawn every
month which, calculated annually, is roughly equal to 10% of
Kenya`s GDP.

The value of M-Pesa transactions since 2007 to
March 2010 topped KES828bn (half of the country’s GDP).

The AfDB holds that M-Pesa’s transactions
velocity may be three to four times higher than the one of other
components of money.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The AfDB also maintains that could have made
more complicated the monetary policy implementation.

“The monetary authorities may inadvertently
follow looser monetary policy if the stock of e-money grows more
rapidly than projected,” the AfDB argues.

However, Central Bank of Kenya governor,
Njuguna Ndung’u, told local media that M-Pesa only increases the
frequency with witch the same amount of cash is availed in the

“M-Pesa cannot add to money supply growth, it
can only affect velocity and innovation. This is a mistake I have
seen and clarified internationally,” Ndung’u told Business Daily

M-Pesa was launched five years ago by
Safaricom, the Kenyan subsidiary of Vodafone.

With 70% share of Kenya’s telecoms market, the
secret behind Safaricom’s success has much to do with M-Pesa
m-payment platform.