Financial Inclusion via Mobile Banking – A Comparison Between Kenya and India

Abstract

Mobile payments in India and Kenya had grown tremendously in the last decade and this paper intend to analyze the trend, progress and achievements of both the countries in mobile payments especially focusing on socially and economically backward sections of the society. Mobile payment banking system in Kenya exists since 2007, even before digital era began in India. Payments banks in India, as a concept, envisioned in 2014, nevertheless showing lot of promising growth because of the mobile penetration in India. There are lot of similarities in the intention of both the initiatives, as they mainly focus on financial inclusion for economically poor society and rural population. M-Pesa by Safaricom had made an implausible change in Kenya, improving the labor class and rural people access to banking, reducing time spent on transactions and simplifying the process by just making cell phones as their banks. India until first decade of 20th century, was mainly dependent on postal service for rural areas as banking solution, but now rapidly moving to digital era with payment banks as a mobile enabled banking solution. The paper explains the Indian service providers like Paytm, Airtel, Jio, and Indian postal service who had already established in India were able to move to Payment bank services quicker because of the base they had established in the last decade. The paper utilizes the secondary data information extracted from published reports and reports from Reserve Bank of India, Central Bank of Kenya and other independent organizations like FSD Maps, Statista and GSMA to arrive at a comparison between the payments systems in both the countries.