NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, October 28, 2014

Like millions of Africans, Sebastian Adam uses M-Pesa, a service that lets him pay bills with his mobile phone. With his wife pregnant, Adam decided it was time to start saving — and to earn interest on the money he saves — so he switched to a newer offering called M-Pawa.

Introduced in May by carrier Vodacom Group Ltd. (VOD), M-Pawa is effectively a bank account that Adam can access with his phone. He deposits cash and earns about 5 percent interest on any balance he carries. And he can build up a credit history that someday might help him secure a loan.

“I’m using it for the future benefits,” said Adam, who works in a market stall in Dar es Salaam that sells mobile phones and related tech gear. “I’m having a child, so it’ll be for school fees.”