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AbstractElectronic monies such as Bitcoin and mobile money have become popular in recent times. However, unlike with bitcoin, attempts to classify M‐Pesa theoretically have been rare. This article classifies M‐Pesa as a privately issued inside money, which evolved as an entrepreneurial response to the lack of traditional monies. It describes the institutional framework within which M‐Pesa and other monies evolved while highlighting how competitive forces led to mutual acceptance of competing inside monies, lower prices as well as greater choice for consumers. The case of M‐Pesa and other electronic monies illustrates the potential even today for entrepreneurial and market processes in money given the right institutional setting, especially in developing countries.

AbstractInclusive financial systems play a critical role in fostering economic growth and development. However, the question of what is the best means of achieving this has long been a puzzle. In this article, I use the mobile money revolution in Sub‐Saharan Africa to show that the greatest examples of financial development have come from nations embracing a market‐led approach that removes repressive regulations and gives entrepreneurs the freedom to discover innovative ways to access the unbanked. Comparing the successes and failures of mobile money across the continent over the past decade, I argue that the best predictor of whether a country will reap the benefits of these transformative innovations is whether its government embraces a laissez‐faire, or 'enabling', regulatory approach that encourages entrepreneurship and experimentation.

Financial technology or fintech initiatives are gaining increasing global attention as instruments for financial inclusion and economic and social development. Among such initiatives, mobile-phone-enabled money transfer systems, or "mobile money," have been particularly acclaimed for facilitating access to financial services and creating opportunities for the so-called "unbanked poor." One of the first and most-discussed mobile money projects to date is M-Pesa in Kenya, a digital payment system which is now used by over 70 per cent of the Kenyan population across a variety of sectors including finance, commerce, education, health, and social welfare. M-Pesa is premised on a narrative of social entrepreneurship and has increasingly embraced the idea of philanthrocapitalism, promoting the logic that digital financial inclusion can simultaneously address social problems and produce profit. This paper brings together socio-legal enquiry and international political economy analysis to illustrate the institutional arrangements underpinning the development of M-Pesa and examine some of the projects built on its infrastructure. It argues that social entrepreneurship promotes a logic of opportunity rather than a politics of redistribution, favouring mobile money providers and the institutions involved in the mobile money social business over improving the lives of the intended beneficiaries, namely the unbanked poor.

Financial technology or fintech initiatives are gaining increasing global attention as instruments for financial inclusion and economic and social development. Among such initiatives, mobile-phone-enabled money transfer systems, or "mobile money," have been particularly acclaimed for facilitating access to financial services and creating opportunities for the so-called "unbanked poor." One of the first and most-discussed mobile money projects to date is M-Pesa in Kenya, a digital payment system which is now used by over 70 per cent of the Kenyan population across a variety of sectors including finance, commerce, education, health, and social welfare. M-Pesa is premised on a narrative of social entrepreneurship and has increasingly embraced the idea of philanthrocapitalism, promoting the logic that digital financial inclusion can simultaneously address social problems and produce profit. This paper brings together socio-legal enquiry and international political economy analysis to illustrate the institutional arrangements underpinning the development of M-Pesa and examine some of the projects built on its infrastructure. It argues that social entrepreneurship promotes a logic of opportunity rather than a politics of redistribution, favouring mobile money providers and the institutions involved in the mobile money social business over improving the lives of the intended beneficiaries, namely the unbanked poor.