If you live in Kenya there’s a jingle you hear on television and radio a lot, an ad for a type of banking service called M-PESA that’s run entirely through your mobile phone.
You set up an account with the phone company. You can send and receive funds by text. Or, if you need to make a cash deposit or withdrawal, you do it through a vast network of agents — small-time vendors in kiosks and shops, for example, that the company has set up.
M-PESA was launched nine years ago. Today almost every single household in Kenya uses it. Most Kenyans didn’t have access to traditional banks before. Which already makes mobile banking a game-changer.
Now scientists say there could be an extra benefit for poor customers: Mobile banking might lift people out of poverty. That’s the subject of a study out this week in the journal Science about M-PESA.
It turns out mobile banking made a big dent in poverty. The impact was particularly strong for households led by women. Compared to households in areas without M-PESA agents, those women-led families with access to a large number of agents set aside 22 percent more in savings between 2008 and 2014. And they bought 18.5 percent more basic goods.
What’s more, among the poorest families — those who’d been living on less than a $1.25 a day — nearly 1 in 10 got enough of a boost to lift them out of extreme poverty.
That’s a better track record than a lot of aid programs.