Matthew Clark's article in the October 12, 2007 edition of The Christian Science Monitor discusses how poor Kenyans, without access to banks, are using a system of cellphone banking to send money from the slums of Nairobi to the villages from which they came. Called "M-PESA," the "M" standing for "mobile" and PESA for "cash" in Swahili, the system, not connected to any bank, allows people to select from a short menu on their cellular phones such options as "send money" or "withdraw cash." The person receiving the funds can then go to an M-PESA agent or participating gas station to receive the funds.
Kenyans love this system. It provides them a means of getting money back to the rural villages without the dangers of carrying large amounts of cash. This in turn allows the people in the villages to more effectively and efficiently run their farms and make a living.
Africa has more than 225 million cellphone users, according to the article. This is double the amount from just two years ago. In a part of the world where it does not make sense for large banks to open branches, because the transactions are small and the administrative costs too large, this "banking" system empowers the poor by providing them the means to "save for a house, plan for emergencies, or get a loan," according to Mr. Clark. Matthew Clark noted the number of people in the slums who receive money from people in even poorer rural areas. Mr. Clark explained that many urban dwellers were receiving money from the villages to invest in their small business in the cities. This would be impossible without a system like M-PESA.