Carney, W. (William)
- Author
Abstract
This case explores the situation of M-PESA within the Kenyan mobile money market, illustrating the rapid growth and maturation of mobile money within the domestic market and the impact of rapid international diffusion. M-PESA has enjoyed a decade long period of success within the Kenyan market. It has become by far the dominant local player in the mobile money industry, and occupies what some in the market term a virtual monopoly position. This success may have prompted some lethargy on the part of the company as it has basked in its obvious success. Because of its market dominance, there are increasing comments about a monopolistic position. A recent financial consultant’s report even suggested spinning off M-PESA from the parent company Safaricom. The issue has received a great deal of press attention, both local and international. With arguments for and against divestiture, the subject was becoming increasingly sensitive.
Objective
1. To provide students with an opportunity to understand the dynamics of a quickly evolving and disruptive financial services market in a rapidly developing economy. The traditional Kenyan banking market has been disrupted, and additional disruption would seem to be in the offing with new financial service amalgamators waiting in the wings. 2. To highlight the often difficult and delicate nature of managing a successful and fast-growing product or service in a new sector. M-PESA has grown well beyond initial expectations and has now become a key element of the Kenyan economy. The virtual monopoly which the company holds in the marketplace has evoked concern from both regulators and competitors. Is there a limit to success? 3. To explore the delicate relationship between successful companies and government regulation and oversight of a new activity. There are often few rules, and there are often no precedents. This renders the entire process of oversight less than obvious. 4. To explore the issue of why participants believe M-PESA, or mobile money in general, was born in Kenya!
Citation Note
Based on published sources; 13 pages.
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Type
Case Study