Is mobile technology over-hyped?

At an event at the New America Foundation in DC  and in a recent article in Slate, Sascha Meinrath and Jamie Zimmerman argue that mobile technology in general and mobile money in particular have been overhyped as game-changing tools for the poor.

They claim that mobile technology “creates a greater economic divide” and that Kenya’s M-PESA mobile money system is “leaving a substantial portion of the nation’s poor in even more dire straits.”

Tavneet Suri and Billy Jack and separately Kevin Donovan have already beaten me to the counterpunch with cogent rebuttals. Here’s my own two cents:

The idea that mobile technology “leaves the poor further and further behind” in Kenya has a surface plausibility but is not supported by either casual observation or rigorous evidence. Mobile phones are so pervasive here that it would be a struggle to find someone without one. Everyone from a woman selling sukuma at the market in Nakuru to the furniture makers on Ngong Road to security guards at the Nakumatt superstore has at least one phone.

This is clear in the latest hot-off-the-presses data from the very recent Kenya Afrobarometer survey. Part of my new working paper with Aaron Thegeya is based on this data.

Some headline figures:

  • A stunning 93% of Kenyan adults use mobile phones. This includes the 80% who own their own phones, 10% who use phones owned by others in their households, and 3% who use phones owned by people outside their households.
  • 81% of Kenyan adults speak on the phone at least once a day. 61% send or receive a text message at least once a day.
  • The average Kenyan household owns 2.4 mobile phones.
  • Gender and urban vs. rural gaps in mobile phone use overall are negligible. Women and rural residents are, however, slightly less likely to own their own phones and more likely to use someone else’s phone.
  • Mobile money usage is even more prevalent than previously recognized: 73% of Kenyan adults use mobile money, and 23% use mobile money at least once a day.

It’s true that in its initial stages, mobile technology reached only the wealthy. In 1999, just 1 in 1000 Kenyans had a mobile phone, and those few were not the poor. Likewise, after the M-PESA mobile money system was launched in 2007, the first customers were better off Kenyans. But as Jack and Suri show in their own response and as I showed in work with colleagues in the December 2010 Kenyan Economic Update, mobile money use has quickly spread to the poor.

In short, the broad reach of mobile phones and mobile money usage in Kenya is not in doubt. I have more to say about the effects of mobile technology and mobile savings in particular, but I will save those thoughts for future posts.

By Gabriel Demombynes

Gabriel is Senior Economist at World Bank’s office in Nairobi


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