ABSTRACT
M-Pesa 1 is widely celebrated as one of the most successful global social innovations in the past decade. The concept for M-Pesa traces its roots to the DFID funded researchers at Gamos and the Commonwealth Telecommunications Organization. In 2002, the researchers revealed that people in various African countries were transferring airtime to their relatives or friends who were then using or reselling it. The researchers approached Safaricom in Kenya (a subsidiary of Vodafone) to explore the opportunity to create a service that would leverage the network of Safaricom airtime resellers to enable microfinance borrowers to receive and repay their loans. With funding from DFID, Safaricom launched a pilot in 2005 to test the potential for this innovation. The insights gained from the pilot, including the demand for a mobile-money transfer system, led Safaricom to launch a new mobile phone-based payment and money transfer service, called M-Pesa, with M for mobile and Pesa which is the Swahili word for money.
