Mobile technology a potent panacea for transforming lives in Africa

M-pesa is perhaps one of the outstanding inventions that have placed Africa on the technological map. This research paper examines mobile technology in Africa as a whole, the usability of M-pesa and its economic significance. Scrutiny of information in the case of Kenya, reveals the continuous M-Pesa usage reduces the tendency of individuals to retort in using non-literary savings ways and increases the probability of their money being banked. Moreover, M-Pesa results in lowering the prices of rival money transfer services such as Western Union. Thus, making M-pesa cost-effective compared to Western Union money transfer. 2 Mobile Telephony in Africa in and its Progressive Impacts 8 2. 3 Economic Aspects as well as Banking 9 2. 4 Controlling Factors 10 2. 5 How Mobile Phone Technology Minimizes Scrutiny Charges and Expand Marketplaces 11 2.

6 Mobile Finance 12 2. 6 M-Pesa in Tanzania 25 4. 7 M-Pesa in South Africa 26 4. 8 Criticism of the Service 28 CHAPTER FIVE: DISCUSSION 29 5. 1 Factors that Materialized M-Pesa Success 29 5. 2 Analysis of M-Pesa Factors 30 5. From practically unlinked in 1990, the number of people owning mobile phones in Africa has increased and is currently standing at an estimated value of 60 percent. Furthermore, Safaricom Company recorded 1. 1 million Kenyans using the M-Pesa inventory merely eight months of its initialization in March 2007 with another US$88 million already transacted through the system (Chavula, 2013). Besides, Aker and Mbiti (2010), affirm that a record of over 8. 7 million Kenyans in 2009 had already subscribed to the service which was akin to approximately 11% of Kenya's GDP. This mish-mash associated with prevalent mobile technology and the aptitude of instant, secure money transfer as well as low costs of transfer are amounting to; massive shifts in the institutional of economic action, family affairs as well as risk mitigation together with management, amongst others.

In the past decade, family members in various parts of Kenya had little opportunity of communicating with relatives in far places and faced severe constraints in sending and receiving remittances. Currently, on numerous occasions, calls for assistance and resources available can be transmitted simultaneously. Scholars and researchers have noted the changes such as nature change, pattern, and influence of remittances. According to Morawczynski (2011), fewer but more regular payments depicted by M-Pesa users, which accrues overall more substantial payments to rural locales. This aim objects the valuation of the public deliverables steering views of M-Pesa linking to the individuals that have adopted the technology. The emphases of the literature majorly center on the scrutiny of M- technology money customers as well as their prospects.

3 Research problem This research paper has attempted to address the significant knowledge of the importance of mobile technology in the African continent, in particular, M-Pesa invention. Further, factors that facilitated the penetration of mobile technology in Africa have been thoroughly analyzed. Mobile inventory was the preferred area of study since its importance is underlined in the positive influence experienced in Africa on economic development. For accomplishing the aims of the study, the research was directed by the study questions. The focal study questions include: ◦ What are the benefits of technology in general and in an African scenario? ◦ What is the mobile technology penetration rate in Africa? ◦ What role does mobile technology play in relation to banking in Africa? ◦ What were the driving factors for the technological innovation of M-Pesa in Kenya? 1.

5 Research Methodology To primarily find solutions to the research study questions pose, the use of qualitative research methodology is applied. Outline of the information and exploration is premised on literature scrutiny. As the core question in this research purposes at discovering the response to the question "why," the main ideal methodology for the research in this study was qualitative compared to the quantitative framework in this study. The information is examined by meta-analysis method. Conferring to Allums (2014), meta-analysis is an ideal technique for information gathering through scrutiny due to the incorporation of subsidiary foundations. While adopting secondary materials of data, numerical treatment is vague; nevertheless, descriptive language is still an ideal and preferable technique to be used. 6 Research Scope Research outlook majorly emphases on presenting the aspects that led to the embracement of mobile technology in Africa as well as the quick assimilation of M-Pesa by Kenyan population.

M-Pesa invention emerged at a moment when many individuals residing in the remote areas were unbanked especially in Kenya. The tectonic shifting and alignment experienced in Africa's communication spectrum have considerably changed the perceived attitude of negativity towards the African continent. As per September 2011, Africa mobile connection had a record of over 620 million, and currently growing at a very a high pace, and regarded as the second leading mobile market worldwide, the M-Pesa invention accrued a Compound annual growth proportion rate of (CAGR) of 30% within a period of 10 years (GSMA, 2011) as depicted in figure 1 below. Figure 1 Mobile Penetration Rate(source GSMA) This illustrates the importance of mobile technology on entire African land mass, and particularly, Kenyan country regenerated into being the primary form of communication for the mainstream of Africans (Kimenyi & Ndung’u, 2009).

In 2000, Africans less than 3% were projected to be the subscribers towards stable phone line services; arguably, unique principal motives that phone technology corporations majorly ignored the landmass as an outlook for development (GSMA, 2011). Nonetheless, In the course of 2001, approximately 28 out of 54 African nations possessed exceptional mobile-phone subscribers comparatively a higher fraction of mobile subscribers depicted in other continents (GSMA, 2011). Omwansa, (2009), noted the effectiveness of data communications in the development of mobile telephony in Africa. While it is affirmed that mobile phone technology in Africa is unsaturated, Nakajima, (2011) states there exist other manufactured products contribution, which encompasses of mobile data, data aiding and data application hardware, which offer more chances toward revenue innovation. This provides a supplementary scenery that businesses poise to accrue more substantial revenues and huge profits.

Omwansa, (2009) attributes constraints of the introduction of new technologies into Africa as poor infrastructure, political instability, and fragile economies. Improved mobile phone accessibility has amounted to rise in connectivity, creating Africa to stand tall in this sector worldwide according to Telecommunications Union (World Bank 2016). More so, the World Bank noted for each 10% fact upsurge in the infiltration of mobile technology, an upsurge of 0. 81% is realized at GDP as affirmed by GSMA, (2011) underlining the usefulness of the area to economic stability going on the African region. The achievement of M-Pesa mobile money facilities across East Africa has aroused an insurgency towards the perception that mobile telephony inventions have the potential to change the lives of the privileged minority that ought to benefit to the admittance to critical technology for years.

Further, the poor can now use the mobile technology invention for varied services purposes including communicating, trade, educating and being knowledgeable of healthcare inventiveness (Omwansa, 2009). Mobile knowledge revolutions additionally, provided secondary education facilities to individuals who had limited chances of accessing education in Africa (James & Versteeg, 2007). Categorically, an average of 28% of homes having revenue of lower than $1. 27 for every day was regarded to have bank financial records. Through the inauguration of M-Pesa, the operator's shares recorded an increase to 72 % (World Bank, 2016). Additionally, dependence on information money transfers as a way of supporting livelihood cannot be underestimated as it aids in M-Pesa expansion in Kenya. Asongu and Asongu, (2018) affirm that transfers conducted by family as well as friends attribute the significant sources of revenue for those in the rural area.

The UK Department for International Development incubated M-Pesa technology, being among the forerunner in combat alongside with poverty globally from side to side with long-term projects. Imperatively, M-Pesa is operating outside the ancient banking regulatory and is being audited by the Central Bank and acknowledged their operation. This is due to the European Mobile Payment Service that is responsible for instituting the deliverables of payment service players in the financial system. Kenyan banks are consistently consulting with the Central Bank to compel M-Pesa to follow full banking laws or to disservice it. The money accrued through M-Pesa in interchange for electronic assets is credited in bank accounts that are controlled by Safaricom. The study by Chavula (2013), noted the critical aspect depicted by the state concerning the growth of mobile embracement in Africa.

The situation is imperative to note that M-Pesa remains not a monetary implement, even though it is perceived in that perspective. Thus, the state Government encountered the quandary means to control the practice of fulfilling M-Pesa. The World Bank backed the economic changes by the Kenyan government as well as International Monetary Fund that sustained the programs objected at financial development (World Bank, 2016). 5 How Mobile Phone Technology Minimizes Scrutiny Charges and Expand Marketplaces Instances are having a flawed and disproportionate data thrive mainly in Africa marketplaces. S) per laborer in Kenya, mobile telephony reduces such charges by 50 percent comparable to individual travel (Rutten&Mwangi, 2012). Further, mobile phones permit people in obtaining data instantaneously and on a consistent basis, instead of waiting for letters or newspapers.

Seemingly, mobiles phones allow people and organizations actively involved in the search process, hence, idealizing collaboration of information with multiple sources. 6 Mobile Finance Since 2005, mobile money applications widely referred to as "m-banking" have mushroomed through various evolving countries. In essence, systems encompass diverse forms, which aid various financial dealings through a mobile phone, comprising airtime transmission, bills settling and money transfers among individuals. Since it's unveiling, it has recorded a cumulative value of over US$3. 7 billion regarding the funds transferred through M-Pesa (GSMA. Despite M-Pesa being regarded as “banking the unbanked,” averagely, M-Pesa subscribers are more prosperous, well informed, and urban and (Mas, 2008). Further, it is noted that most transfers occur in urban localities. M-Pesa, as well as related m-money systems, have lately transformed from ideally, being money remitting system to reimbursement platform that Okays non-governmental institutions, firms and hospitals to receive and send money (Muthuri & Gilbert, 2011).

More so, mobile handsets also lengthen the extent of medical personnel as well as medical facilities. Mothers are able to make phone calls of inquiry regarding their relative health situation. Further, mobile handsets have been widely employed in collecting, measurement and checking of health information, for instance, tracking epidemics and monitoring (Haas &Nagarajan, 2011). More so, reduced-cost medical imaging structures have employed mobile technology to transfer data to a central processor. CHAPTER THREE: RESEARCH METHODOLOGY 3. According to the framework of Rubin and Babbie (2012, p. 154), on multiple case design, the study comprised of three key areas that were sub-divided into workable processes, which include defining study problem and study questions. , gathering, preparing, analyzing data mined from desktop research and analyzing data and concluding with findings.

This research employed various case study methodologies as a particular technique offers the chances to research specific factors of a problem in depth. A case study is referred to an experimental investigation, which, finds out a phenomenon in length and having the inclusion of real-life situation (Habib, Pathik& Maryam, 2014, p. 1 Data Gathering A vital element in a research study is accessing the ideal data to discourse the research questions. This study obtained information solely from desktop research as well as journals and books. 2 Desktop Research Collecting data from the desktop research was the vital aspect pertaining to this research. The information was obtained and synthesized form documents and information presented by institutions, which portray concern in this spectrum of research. This type of study was vital in providing mobile technology in the African scenario as well as its importance.

It created a market for relations, which, previously were managed by, huge informally by personal trips, friends and public transport networks. Most P2P transactions can be considered as time payments, for instance, remitting part of salary received during the end of the month to relatives, but majority perceived as elementary method of funding, wherever people can take on a more-sophisticated linkage of close members, friends and businesses corporations to access cash when needed (Kimenyi & Ndung’u, 2009). Hence, M-Pesa enables the primary method of financial shielding for a higher number of subscribers creating an instant network as well as introducing enormous precautions of convenience transactions that were already in use. Recently, Safaricom has progressively released out M-Pesa to organizational disbursements, allowing organizations to remit wages and gather bill balances.

In the future, Safaricom envisages amplified practice of M-Pesa, particularly in stock transactions. Figure 2 Data exchange between Phone and STK (GSMA, 2011) 4. 4 M-Pesa Trials and Deployment The effective conducting of the initial test was the main factor in Safaricom verdict to initiate the invention fully (GSMA, 2011). The knowledge from the testing aided in ascertaining the market prerequisite concerning the service despite it being anchored on loan repayment facilitation, it also assessed aspects such as airtime purchase and national remittance. After a vigorous assessment regarding the trial period, M-Pesa depicted the notion of having different importance to the users. Categorically, M-Pesa dealings uphold security, due to the ideal of the mobile service in remitting to multiple people and businesses (Wasserman, 2011). Hence, the company was challenged to have able as well as competent personnel portraying unexceptional communication skills to clarify issues that were perceived as severe in the whole procedure.

Noteworthy, wireless admission is also a fundamental aspect that requires more consideration. The main destructor in the pilot was achieving the representative's trust and inspiring them to process cash withdrawals. Most representatives were strict to give out cash from their till basing on procedures from text information. Vodafone mitigated this issue by offering separate M-Pesa cash floats for representatives to carry out transactions. The design compels bank branches to be responsible for controlling money and mobile money float balances for a group of no-bank mobile money merchandise representatives. However, it has enhanced customer to transact funds from bank accounts to mobile money accounts, mainly through ATMs. 5 How M-Pesa Works M-Pesa technology is a fast, suitable, and authentic mode of money transactions via mobile handsets across Kenya.

In essence, the system aids subscribers to deposit and send money to other M-Pesa subscribers. This is achieved premised on the generation of SIM cards having an application toolkit (STK). Figure 4 M-pesa reversal process Figure 5 M-Pesa withdrawal process M-Pesa transactions constitute various tariffs and charges depending on the transaction. Ideally, M-Pesa pricing is transparent and can be foreseen by the users (Haas & Nagarajan, 2011, p. The text services delivering information confirming receiving the money are free. All Safaricom outlets lack control in charging direct fees instead the fees is covered by the individual customer account. Hence, the outlets get their dividends from Safaricom instead of customers. Figure 6 M-Pesa transactions tariffs (Safaricom, 2018) It is imperative to note that Safaricom enhanced open network and viral registration.

In essence, subscribers that are subscribed to mobile money can remit money to non-subscribed phone subscribers other than Safaricom network. This aptitude-enhanced customer's growth as it aided early subscribers to use the model even amidst low volume of registered customers. Customers pay a high transaction charge when remitting money to non-M-Pesa subscribers as opposed to M-Pesa-to-M-Pesa customer's transactions. Ideally, the system was designed to leverage customer embracement. This tolerates the subscribers to discuss transaction charges with particular retail representatives. Figure 7 Commission Models for Mobile Money Implementation (Nakajima, 2011) M-Pesa employs the hierarchy design and master representatives generally accrue an average of 35% of the total representative commissions remitted by Safaricom, with the retail representatives accumulating an average of 65% (GSMA, 2011). Each master representative is responsible for controlling for paying M-Pesa commissions to the retail representatives.

To aid the master representatives in managing the commissions as well as the liquidity, Safaricom offers a website that information is accessed regarding the entire transactions performed by their representatives. The system has an inclusion of tools that aid master representatives to circulate electronic value in their respective outlets. Omwansa (2009) affirms that the critical factors for the slow development of Mobile money technology in Tanzania were a broad range of various techniques for dispatching money that had an influence on the introduction of new money transaction mode. Despite Mobile wealth portraying stern measures, Local money transaction techniques in Tanzania allowed people in registering to the service even if one lacks a national identity card. In spite of M-Pesa being relatively cheaper compared to local methods, Tanzanians embraced the technology due to its convenience.

Researchers affirm that Tanzania had more much strict laws compared to Kenya. Hence, it was challenging to materialize the technology, as it was perceived as impossible by ordinary users. Despite in Kenya, the innovation was embraced to have diversity in customers, in Tanzania was touted as a service that was akin to the preexisted money transfer services. Figure 1. 5 Kenya and Tanzania money transactions Figure 8 Kenya and Tanzania Money Transactions (GSMA, 2011) 4. 7 M-Pesa in South Africa M-Pesa technology was also idealized in South Africa apart from Tanzania. The M-Pesa technology performed dismally in comparison to Tanzania. In essence, M-Pesa lacked subscribers because there was no gap in banking services access. South Africa enhanced strict regulations, which render it impossible for foreign organizations to penetrate and have shares in the mobile money transfer market.

The main aim that jeopardized M-Pesa penetration in South Africa is poor marketing strategies and relaxed dissemination of service agents in the entire country. Currently, M-Pesa records an average of 9000 agents in South Africa in comparison to Kenya's 60000 personnel in Kenya. Despite Vodafone attempting to re-advertise mobile money technology in South Africa as a mobile money solution though, the strategy backfired (Safaricom, 2018). It has a lower rate in comparison to Tanzania and Kenya. According to GSMA, (2011) subscribers of M-Pesa in South Africa perceive the system as convenient and secure to use. In spite of this, a substantive of the population still believe in banking institutions transactions and have not fully embraced M-Pesa technology. 8 Criticism of the Service Despite being widely referred to as a financial inclusion service, M-Pesa subscribers portray high chances of owning a bank account compared to non-subscribers.

Generally, it is widely embraced by male, young, urban individuals who are contributing to its absorption as well as success. Hence, the top managerial consulted widely in order to incorporate various strategies that will see them overcome the obstacles. It is worth noting that trust, network effect and chicken-and-egg trap has a role in determining the successfulness of electronic transactions globally. To overcome this Safaricom proposed branding, channel management, and pricing as the critical factors for its successful growth. Initially, Safaricom faced difficulties of invoking trust in the transaction technique. Categorically, it was difficult as well as there was little experience in the market concerning the formal financial services. Research conducted by Karugu and Mwendwa (2007), noted that opening a current bank account averagely required US$ 107 per month and seemingly, maintaining the same report required was US$ 17 on a monthly basis, thus amounting to an average of US$120 annual fee charges for keeping money banking account.

On the contrary, a mobile money account opening is easy and cheap: does not need cash in opening an M-Pesa account as well as no fee is charged for deposits and monthly account maintenance charges. Thus, the cost-effective ability of M-Pesa banking technology played a pivotal role in its success and acceptance. The large market share of Safaricom was a critical success factor for M-Pesa success. This is clearly elaborated by the staggering acceptance of Tanzania M-Pesa compared to Kenyan M-Pesa. Safaricom Plc Company recognized the gap that needed prompt action such as, enormous individuals who were unbanked and presented the remedy of mobile inventory that eased money transactions making them instant and safe. Kenya is noted of depicting a high rate of individuals owning mobile phones, and the urge of transferring the money to their families.

M-Pesa was materialized to be instant access in Kenya due to a large number of people owning mobile phones and the urge for transferring money amongst family members (GSMA, 2011). M-PESA flopped in South Africa and Tanzania due to the feeling for this inventory was not as acute as in Kenya. Ideal marketing having inclusion of network applications plays a role in aiding the M-Pesa acknowledgment. Ideally, this is facilitated by using bulk pay and USSD. The customer transactions are facilitated via M-Pesa through withdrawals employing a bank executed USSD. Among the institutions that have embraced this technology, including Kenya Post Office Savings Bank, Co-operative Bank, Family Bank, Faulu Kenya amongst others. For the process to be initiated customers, need to link their banks' m-banking platform.

Funds are then, transmitted from the bank to Safaricom account and finally to the mobile money wallet of the customer. Many banks accept credits done through pay bill mode, in spite of lack of management in facilitating withdrawals via M-Pesa. The pay bill aspect is viable in connecting other monetary accounts. For instance, Kenya Women Finance Trust is a microfinance bank that employs mobile pay bill aspect to enable customer loan repayments. The CIC insurance company embraces M-Pesa's pay bill to permit a subscriber to settle insurance premiums via the mobile handset. According to James and Versteeg (2007), research, it is recorded that customers can save an approximate of US$ 1. Mobile users have been testing the systems. For instance, M-Pesa technology testing in Kenya, despite not all embraces these experiments.

Ideal systems are conversant with the desires of the designers, programmers, merchants, agents, all people in general. Noteworthy, an enabling environment is critical. Regulation occasionally has negativity aspects for merchants and entrepreneurs. Categorically, this is viable for financially ignored and under deserved populations. The industry is not fully developed despite the depicted benefits realized. Nonetheless, there has been undoubted growth of mobile money, as 23 deployments were accomplished over one million active subscribers; usage continues to be controlled by two modes of transactions: on-net P2P and airtime top-ups (Karugu&Mwendwa, 2007) transaction signify 88% of the entire volume and 77% of the whole value of transactions. This realism sticks in spite of extensive efforts to force into emerging ecosystem verticals; for instance, 135 out of 256 live deployments have unveiled merchant transactions, and 118 have launched bulk transactions (Karugu&Mwendwa, 2007).

Even in Kenya, in spite of M-Pesa success, according to GSM, (2011) shows that an average of 3% of the entire transactions was initiated electronically. Literally, G2P tends to constitute "dump & pull" character making it difficult for providers to control money loop and agent management at the same time. Nevertheless, there are interconnections between ecosystem actions in different aspects in which operators must have in mind. For instance, enabling customers to get their salary, government pension alternatively; getting loans using their mobile money account could boost their chances of paying social needs such as bills, school fees digitally. This is because of the availability of money in an electronic form. The teamwork highlight prospect for operators with interest of investment towards building a broad ecosystem.

Magazines and Newspaper published daily had a substantial positive impact on Safaricom M – Pesa marketing strategy. An important factor in marketing strategy is Branding. According to Omwansa and Sullivan (2012), making an image that defines a commodity and differentiates it from that of its competitors is regarded as branding. M- Pesa could not be imagined without a brand as it represents the consumer's perception of the service. Safaricom's strategy of associating M-Pesa corporate as a product brand that is correlated with people's mind plays general sentiments. The main reason that compelled using of buses and courier services in money transportation is perhaps the incompetence of other transfer techniques in managing cash. Having an inclusion of depositing and remitting points are critical components to active money transactions, the timing for money transactions are essential to be balanced for a precise location, and adequate floats and cash at hand in offering a reliable and effective service.

Money needs to be circulated to all areas to ensure there is sufficient cash availability at representative's ends. The bank is able to offer cash transactions in the scenario of MNO admit to collaborate with the bank and use the entire service model (James & Versteeg, 2007). The model that controls the customers' accounts, transaction logging and clearance may either be among of the current IN model of the operator. 1 Summary The research has found that mobile money service provides provision to its subscribers. Further, the study portrayed that executing M-Pesa transaction was precise. M-Pesa is convenient because subscribers it has eliminated the notion of carrying a lump sum of money from one place to another and the convenience has significantly risen due through using of M-Pesa services.

In addition, affirmed that M-Pesa is readily available hence enhancing swift payments to be active and improving the living values of individuals has amounted to its widespread globally. The research recognized that mobile money service is ideal in its operation. M-Pesa attested to be simple and exponentially dependable by users for saving purposes. Hence, Kenyans preferred using M-Pesa rather than opening a savings bank account. This finding had two probable deliverables. Firstly, it depicted the potential of M-Pesa in replacing traditional banking services. Further, the results infer that security and the speed are crucial in determining new technology inventions, adoption in the poor regions of the globe, as depicted with the embracement of mobile money by individuals leaving in isolated areas lacking access to banking services.

The government identified the loophole in financial services to the rural individuals and aided the inventiveness proposed by Safaricom Plc Company. Literature has affirmed banking system cooperation to actualize the M-Pesa technology. Central Bank is ascertaining the country's problem of inefficiency to suitable banking hence; depicting a loss in the expansion of bank branches thus prompted their support to the technology. M-Pesa gradually evolved into a financial system despite it facing challenges at the start. Noticeably, when M-Pesa was launched in South Africa and Tanzania, the respective countries perceived the technology as a financial system hence developed regulatory measures. The study shows that simplicity and trust were the focal aspects that materialized the admiration of mobile payment. Categorically, for decades numerous M-Pesa subscribers, the simple design of the transactions, as well as trust in the particular transactions were very vital.

M-Pesa changed the perception of how the Kenyans understood leisure due to money system transactions through mobile phones made them feel their world is globalized. Furthermore, due to the vast distances of families and social networks, hence the procedure of monetary aspect and money transaction had to be streamlined to the scenario of money transactions would occur without necessarily going to a financial organization that is few in Kenya, particularly in remote areas. The significant incorporation of M-Pesa was premised on the notion of mobile investment model to meet the request target regarding money transactions. More so, research concerning the consequences of modifications in policy and regulation of the mobile money innovation, particularly, from a government perspective would have substantiated this study and provide a comprehensive assessment of the industry.

4 Areas of Further Studies The recommendation for further research is to discover gaps for M-Pesa to enhance more design and services. Though M-Pesa was primarily launched purposefully for other money transactions, it became a financial system having varied applications, as demonstrated with case research on Kenya. Subsequently, there is a cohesive way to future discover the diversity of mobile money and opportunity of its services. Also, a future study could definitely an emphasis on advertising factors of M-PESA attention to other marketplaces. aeaweb. org/doi/pdf/10. 1257/jep. 207 (Accessed 04. Allums, S. K. “Telecommunications development and economic growth in Africa,” Information Technology for Development, 19(1), pp. Gajjala, R. and Tetteh, D. Relax, You’ve Got M-PESA: Leisure as Empowerment. Financial Services Assessment. Iris Center Publication, 1-3.