Bridges to Cash: The Retail End of M-PESA
2010, Eijkman, F., Kendall, J. & Mas, I.
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Examining challenges of maintaining liquidity for M-PESA Agent Networks

This paper explores the liquidity needs of M-PESA outlets.

M-PESA is a mobile money service promoted by Safaricom, a leading mobile operator in Kenya. The service enables electronic payment through mobile phones. Customers exchange cash for e-float, a form of electronic value, at M-PESA agent points whenever they deposit or withdraw cash. It is a challenge to keep these agent points well-stocked with cash and e-float. If the outlet performs too many cash-in transactions it will run out of e-float, and if it performs too many cash-out transactions it will run out of cash. The main obstacles for stores in keeping enough cash and e-float on hand to satisfy customers include:

• Employee misconduct;
• Physical security;
• Working capital;
• Travel costs and time.

The study examines actual transactional data over a six month period from a sample of 20 retail outlets managed by PEP Intermedius, an M-PESA agent operating in Western Kenya. Study findings indicate that stores require intense daily liquidity management support, with rural areas facing greater difficulties than urban areas. Customers exercise their choice in stores based on service levels.

02 Oct 2010

Margaret Thuo FOCUS Kenya

10 May 2010

Bridges to Cash

This is a great piece that investigates new data from a chain of M-PESA agent stores in Western Kenya. The authors help us get a better understanding of the difficulties faced by M-PESA agents in managing the customer volume and liquidity needs.

United States

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Publisher(s):
PEP Intermedius
Bill & Melinda Gates Foundation

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