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M-PESA International Money Transfer Service, Safaricom

This practice represents an innovative use of mobile and IT-based technologies to reduce the costs of transferring remittances for migrants.

  • Responsible Organizations: SAFARICOM, a Kenyan mobile phone company (part of the Vodafone group)
  • ILO Regions: Africa; Europe
  • Country(ies): Kenya; United Kingdom
  • Multilateral framework theme(s): Labour migration and development
  • Start date: Dec 2008


Facilitate the transfer of remittances from the United Kingdom to Kenya in a convenient and inexpensive way


Activities, processes and steps involved:

M-PESA (M for mobile, pesa is Swahili for money) is a mobile money transfer service that allows users in Kenya to send and receive financial transfers and complete basic banking transactions using their mobile telephones. Vodafone and Safaricom partnered to provide this service to all Safaricom subscribers. The development of the national service was initially sponsored by the UK Department for International Development (DFID) in partnership with the microfinance institution, Faulu, from 2003 to 2007.

In December 2008, Vodafone, Safaricom and Western Union partnered to pilot an international mobile money transfer service between the United Kingdom and Kenya. The M-PESA International Money Transfer (IMT) service was launched in October 2009, after a three month pilot project involving three UK-based agents (KenTV, Western Union, and Provident Capital transfers).

M-PESA IMT allows anybody living in the United Kingdom to transfer money through selected agents to persons in Kenya using a mobile phone. Currently, a total of 19 outlets in the UK offer this service, located in areas with high numbers of Kenyan migrants. Safaricom is planning to increase the number of locations in the UK offering this service.

Safaricom and Vodafone developed M-PESA in accordance with the regulations of the Central Bank of Kenya and the United Kingdom. Safaricom was authorized on August 3, 2009 to transact foreign exchange business.

In order to be able to remit money to Kenya, senders must register their UK mobile number with M-PESA and present a photo ID. Recipients must be Safaricom users but are not required to have a bank account or be previously registered with M-PESA. However, individuals must register with M-PESA upon receipt of funds through this service. Those not registered with M-PESA will receive a message advising him or her of the transfer and the necessity of registering within 21 days to retrieve the funds. Registration for the service is free and available at any M-PESA agent in Kenya.

Money transfers are received almost instantly (the time it takes for a text message to be recieved), and both the sender and receiver are sent a confirmation text message from M-PESA. The maximum amount that can be sent at one time via M-PESA is L250 (about US$ 403). An individual sender can send a maximum of L1000 per month (about US$ 1,600). Conversion rates are done directly at the point of sending money, and charges vary depending on the amount sent and agent used. The costs fluctuate between L4.00 (US$ 6.45) to L6.90 (US$ 11.12) to send up to L250. This is a competitive price compared to bank transfers from the United Kingdom to Kenya, which average L10 (US$ 16.13), and other private money transfer services or the post office. There is no charge to the recipient for receiving IMT via M-PESA

Persons receiving funds in Kenya can withdraw the funds from any M-PESA agent countrywide or PesaPoint automatic banking machine.

Target beneficiaries

Kenyan migrants in the United Kingdom and their families living in Kenya.


Kenya is the first country in the world to use this service, which is offered in partnership with Safaricom and Vodafone. M-PESA has partnered with selected agents in the United Kingdom, where senders can transfer funds. These are: Western Union, Provident Capital and KenTV.

Main outputs:

M-PESA IMT provides a convenient, cost-effective, secure, transparent and simple method to transfer money. By June 2010, M-PESA reached over 10 million subscribers, roughly a third of the Kenyan population. By March 2012, this number had climbed to roughly 14.6 million active users.

Relevant criteria for assessment

1. Respect for migrant worker rights:

Both the ILO Migration for Employment Convention, 1949 (No. 97) and the UN Convention for the Rights of Migrant Workers and their Families (1990) refer to the right of migrant workers to transfer their earnings and savings to their country of origin, stating that States should permit and facilitate such transfers. Likewise, the Multilateral Framework on Labour Migration includes guidelines for reducing the costs of remittance transfers by facilitating access to financial services and reducing transaction fees.

2. Relevance:

M-PESA IMT helps alleviate the costs of transferring money. This is significant since transactions cost can amount to as much as ten per cent of the amount sent. According to the World Bank, remittances sent to Kenya totalled 1.7 billion in 2008, about 6.6% of GDP. Remittances are a significant source of funding and support expenditures on education and health care. All this helps the transfer of capital, contributes to development and the alleviation of poverty. Additionally, the IMT service facilitates access to funds to unbanked individuals. As of 2007, 38 per cent of Kenyans had no access to any form of financial services and only 19 per cent had access to formal financial institutions. In contrast, mobile use is widespread, reaching 13 million as of December 2008.

3. (Positive) Impact:

A number of positive impacts can be identified:
-This innovative transfer system cuts the costs for migrant workers transferring money to their families;
-For the recipient, this method avoids the necessity to travel long distances from rural areas to collect cash at banks or offices in cities;
-By cutting out intermediary phases costs are kept low;
-Persons who previously did not have access to private banking have new opportunities to access financial services;
-It has been observed that users of the service began to make transfers "in bits", remitting smaller amounts of money more frequently. More frequent transfers of smaller value may result in an increase in the total amount remitted.

4. Potential for replication and extension (adaptability):

The practice has shown great potential for replication and extension throughout its existence. In 2011, Safaricom entered an agreement with Western Union, allowing M-PESA's customers to receive money transfers from 45 countries and territories across the globe.

M-Pesa has expanded to several countries since its initial launch in Kenya in 2007, including Tanzania, South Africa and Afghanistan. Vodafone India and ICICI Bank began a national launch of M-Pesa in India in April 2013, after having run a pilot programme in Rajasthan since 2011.

5. Innovativeness:

Safaricom was the first company to offer a mobile based international money transfer service. In 2009, it was awarded "Best Mobile Money Service" by Global Mobile Awards, for its innovation. It provides unbanked customers safe, fast and easy access to remittances. At the 2011 Mobile World Congress, organized by Global System for Mobile Communications Association (GSMA), M-Pesa was awarded the Mobile Money for the Unbanked Award.

Safaricom has continued to offer further services with M-Pesa, for example through the 2010 launch of the Nunua Na M-Pesa, a service which allows M-Pesa customers to purchase groceries, and M-Ticketing, providing the ability to book and pay for tickets to concerts, sporting and other events. In 2011 Safaricom introduced Lipa Karo, a service that permits M-Pesa customers to pay school fees.

6. Sustainability:

By March 2012 and just five years into its existence, M-Pesa costumers totalled approximately 14.6 million active users, affirming the practice's popularity and financial sustainability. On the Safaricom website, a highly useful interactive timeline of M-Pesa's major accomplishments provides evidence of the rapid growth and new developments that have characterised the practice.

7. Effectiveness:

The service achieves its goals of reducing the cost of money transfers and reach to individuals who are excluded from formal financial services.


  • Safaricom Limited
    P.O.Box 46350
    00100 Nairobi
    Tel: +254 20 427 3272

Funding sources

  • The M-PESA service was developed by Safaricom a private telecommunications company.


last updated on 25.10.2013^ top