Why Has M-PESA Only Been Truly Successful in Kenya?

Much has been made over the success of the M-PESA mobile banking system in Kenya.  Alice Liu and others in her profession have argued that m-banking will be the way of the future in the developing world and that it can be an immediate success.  While m-banking may be highly successful in the future, right now the only real success story is M-PESA in Kenya.  Phone companies and banks have attempted to implement this system in many other countries in Africa and Asia to limited success and even outright failure.  The question then is why does the system work in Kenya but not in other countries?  I would argue that companies have attempted to use the same strategy as M-PESA in other countries without taking into account the geographic and cultural differences.  In a 2009 article, the Consultative Group to Assist the Poor, or CGAP, used Tanzania, a country that borders Kenya, as a case study for why M-PESA may not work in other places.  http://www.cgap.org/p/site/c/template.rc/1.26.10908/ In the article, they discuss the difference in geography and culture as well as agent networks, and marketing.  According to CGAP, Tanzania is almost double the size of Kenya but is much less densely populated.  Also, its three main urban centers are much smaller than the three main urban centers of Kenya.  Since the population is spread much thinner in Tanzania, it is more difficult to find agents who a large network of people will trust with their money.  People are inherently less connected with each other and interact less, so agent networks must be smaller and therefore less efficient.  When it comes to mobile banking, everything depends on whether or not people can trust the agent they are giving money to.  It is up to the agent to make the transfer of money for people and to make sure he has enough money for withdrawals.  An untrustworthy agent destroys the process, and in a bigger but less densely populated country like Tanzania, trust may be harder to come by.  Furthermore, a similar marketing strategy was used, which may not have been as relatable to Tanzanians as it was to the Kenyans.

The example of M-PESA and its flaws highlight the problems with information technology in the developing world in general.  When a program succeeds in one country, people are quick to jump on the bandwagon and try to implement it in other developing countries.  However, what they fail to realize is that not all countries in the developing world are in the same, and in fact, most are very different.  In the west, we tend to group all developing countries together into one large group and assume that they have the same needs and desires.  This ignorant view leads to developed countries forcing programs on developing countries like the One Laptop Per Child or M-PESA system that they may just not be ready for or even find useful.  Information technology and its many offshoots can and probably will be extremely important in bringing up developing countries and helping citizens improve their standard of living.  However, we can not expect giving a child a laptop or a phone to immediately elevate the economy of these countries or their standard of living.  This process will take time and can only work if programs are implemented that fit each country individually.  I believe it is imperative that the leaders of these programs actually talk to people from specific countries and learn about their cultures and histories before blindly implementing programs that may have worked elsewhere.  By tweaking these promising programs to fit individual countries, we can avoid failures and hopefully provide a boost to these developing countries faster and more efficiently than by just forcing programs down their throat.