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

Monday, February 24, 2014

FINANCIAL transactions have always been a challenge for rural, poor people in Tanzania. M-Pesa, an immensely popular system of money transfer via mobile phone, has made life much easier.

Thomas Masagati had his doubts. The businessman wanted to send money for Christmas to his mother in Musoma, Mara Region but he was skeptical about using M-Pesa services for the first time. This was in November 2008, just a few months after Vodacom Tanzania introduced mobile money transfer services in the country. M-Pesa was not as widespread as today.

Mr Masagati faced another challenge: his mother did not own a mobile phone; she was using a neighbour’s handset to communicate with her son. “I always had to send money to my mother in Musoma, but since she has no bank account, it meant a great deal of difficulty and risk”, he remembers. Things are a now easier now thanks to M-Pesa and his mother’s own mobile phone.