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M-PESA : Poverty as a business


Submitted by Group Q :
Geet Panwar
Marina Panggeng
Nishant Ray
Prabhat Saxena
Raghav Bhatnagar
Raunak Mantri
Shivam Pallival
Yashwardhan Kabra

Q1. M-PESA is a product aimed at poor and marginalized

a. Is it a good example of a company identifying
commercial opportunities at the bottom of the pyramid?
b. Is it a financially viable business model ?
c.What impacts has it had on poor consumers ?
a. Yes,it is a good example of a company identifying
commercial opportunities at the bottom of the
pyramid .The tapping of the potential at the bottom
of the pyramid and its huge success is supported by
the following points :
Since its inception,M-PESA has seen
multifold increase in its user base
The project has been able to give a fillip to
the vastly underdeveloped physical and
economic infrastructure in Kenya
Economic migrants who comprise a major
chunk of mobile phone users have access
to easy and fast payment options
unavailable earlier
A developing country like Kenya and its
poor population cannot afford to spend a
lot to speed up infrastructural
requirements.Hence,interventions utililizing
technology like the M-PESA are useful
b.The 50% part funding by the British governments
Department for International Development (DFID) and the
support of Kenyan microfinance institution ,Faulu has been
instrumental in making it financially viable.In addition,the
spectacular success of the project and its branching into
newer territories as a result of new services is ground for
healthy financial performance.
c. Poor consumers have been serviced in the following
manner :
Access to formal financial system
Ability to transfer money in a safe and
secure manner

Money transfers without falling prey to

robbers and hence reducing crime in the
Purchase airtime
Payment of bills
2. There are strong arguments as to why poverty should
be treated as a sustainability challenge.
a.How does M-PESA help poor people enjoy more
sustainable livelihoods ?
b. How can poor people have a negative impact on other
aspects of sustainability ?
Do you agree poverty alleviation is a sustainability
challenge ?
Ans :
a) Money transfers without physical transportation helps
in saving energy and costs ,thus helping poor people
enjoy more sustainable livelihoods.Economic benefits
arising out of using technology like mobile telephony
and virtual money transfers has a positive impact on
their economic lives ,which is a major component of
sustainable living.In a broader perspective,using
technology and reducing the burden of physical
infrastructure and its resultant low carbon emissions
is a contribution to sustainable living as a healthier
environment is beneficial to everybody.In the
particular case of Africa,it can mean less draughts
and availability of resources like water and
agricultural produce.
b) Poor people need to be given resources for
sustenance.A major thrust in reducing poverty in any
country is economic development.Economic
development would require investments in
infrastructure and other projects which may not be
low carbon in nature .The creation of an eco system
to boost economic development could also imply
increase in activities that may not positively impact
other aspects of sustainability like deforestation,
rehabilitation and resettlement of populations
,burning of fossil fuels for power etc.Thus ,poverty
alleviation needs to be taken up in a more
sustainable manner.On the other hand,it has to be
noted that the per capita energy consumption and

resultant carbon emission is very less for poor

countries as compared to rich countries.
c) Poverty alleviation is a sustainability challenge
because of the following reasons :
Poverty can be alleviated through
economic development which would
involve uses of natural resources .The
balancing of achieving economic
development with sustainability goals is
thus a huge challenge.
Creation of consensus amongst countries
in terms of adherence to environment
and sustainibilty goals outlined in
various international initiatives like the
Kyoto Protocol is a huge challenge as
developing countries have development
goals to achieve and consider blanket
emission criteria at par with developed
countries to be unfair .
3.M-PESAs funding model allowed it to compete for
internal resources.
a. Do you think the services success will have a
significant impact on either Vodafone or Safaricom in the
future ?
b. How might their behavior change ?
c.How might Safaricom build on this success as it attempts
to expand its services in East Africa ?
Ans : a. In the long term ,the servicess success will have
a significant positive impact on both Vodafone and
Safaricom due to various reasons :
the strong ties built with the customers and other
stakeholders would reap positive dividends for a long
a positive brand image created across the globe due
to the success of the M-PESA programme and its CSR
implications is a valuable intangible asset
an incentive to invest in more sustainable projects
with huge economic returns
b. Success begets success.More socially responsible
behavior is expected from Vodafone and Safaricom

c. It can use the knowledge and experience gained out

of the M-PESA programme to implement better
strategies in achieving its corporate goals without
compromising with sustaianility.For instance,it could
develop products to leverage the Kenyan tourism
success story and support eco-tourism.