The Digital Revolution in Financial Services: The Case of Financial Inclusion: What can Developing Countries Learn from the Mobile Money Success in Kenya, and what Spillover Effects can this Lead to?

Rebecca Hjelmervik & Helene Borud

Student thesis: Master thesis

Abstract

This thesis argues that there are several factors influencing adoption rates and success of mobile payment solutions in developing markets. Thus, a successful implementation of the service may lead to the multiple spillover effects identified in the study. To fit the scope of this study, a case country and company will be utilised to analyse mobile payments through an International Business perspective. To understand the underlying conditions affecting adoption rates this study will take a qualitative approach to determine why mobile payment services has experienced such immense growth and success in Africa. Data was collected using semi-structured interviews with representatives from World Bank, Gates Foundation, and UN organisation Better Than Cash, amongst others. The Technology Acceptance Model and Technology Life Cycle Model will be used to assess adoption rate, whereas development economics is applied determine potential spillover effects. The results showed several reasons for the fast adoption rate. First, the high mobile penetration rate in Kenya. The digital infrastructure was already there, so all Safaricom had to do was provide the service. Second, the proportion of unbanked Kenyans. Inhabitants were desperate for a better solution to bearing cash, which is why mobile money committed to efficient, secure and convenient transfers. Third, the regulative environment in Kenya accommodated entrepreneurial spirit and innovation. When allowing for technology to flourish, Safaricom were able to continuously develop their service to meet the need of consumers. Female empowerment, a higher financial inclusion rate and increased efficiency and security has been identified as the most important spillover effects.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages139
SupervisorsAbayomi Baiyere