Payment app has given Kenyan economy a big boost

The successful app is now used by over 60 per cent of the Kenyan population and works as follows: users can convert their cash to credit on the app at exchange shops found on every shopping street in the country. As the account number, M-Pesa uses the user's phone number, which means users do not need a bank account. Users enter another user's number in the app, tap in an amount, and the money is transferred instantly. A revolution, as banks and ATMs are sparse in Kenya.

Financial inclusion

According to Huisman, the app's tremendous growth has been dubbed, rightly so, as a maturing of the Kenyan financial system. 'It is a financial engineering success second to none, and that on a continent where financial development was always thought to be difficult,' the Associate Professor said. Thanks to this app, people can get credit from aid organisations or their personal circle more easily, and store it more securely.

Yet, there are downsides to the app. For instance, new businesses that can be created by M-Pesa may compete away smaller cash-only businesses. Moreover, the company creams around one to two per cent of the transaction.