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Report

MPESA Project Analysis: Exploring the use of cash transfers using cell phones in pastoral areas

2012 — By Sarah Hermon-Duc

Safaricom Limited, a mobile network operator in Kenya, launched a mobile money transfer system called M-PESA in 2007. This system allows users to send or receive money on their Safaricom SIM card.

Télécoms sans Frontières and Vétérinaires sans Frontières – Germany decided to work in partnership on the cash distribution system for Cash Transfer activities in pastoral areas in Northern Kenya. TSF was in charge of the electronic cash transfer component of RAPID (Response in Arid-lands for pastoralists in drought affected Kenya) project. After a successful pilot phase in Marsabit South District, this means of payment was extended to other projects in Turkana North and North Horr districts. A total of 1050 beneficiaries were paid through M-PESA for Cash for Work activities.

This analysis, based on TSF and VSF-G experience, points out the appropriateness of the use of a cell phone payment system for Cash Transfer activities in pastoralist areas. It also shows the impact of this payment system for beneficiaries. Despite the challenges encountered mainly due to the remote environment and the new use of these technologies, the use of mobile money transfers compared to traditional cash distribution proved to be an efficient way of delivering assistance.