Page 1 of 17
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 9
Setember 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 135
Factors Influencing M-Money Growth among Small Business
The Case of Iringa Municipality- Tanzania
Matokeo Msavange & Shadrack Stephen Madila
1Moshi Co-operative University P.O. Box 474 Moshi, Tanzania
2ICT department, Moshi Co-operative University P.O. Box 474 Moshi, Tanzania
Email: msavange@gmail.com ; Email: shadrack.madila@mocu.ac.tz
Abstract:
This study examined the Factors influencing M- money growth among small Business in Iringa
Municipality, Tanzania. The specific objectives
of this study were to identify factors influencing
growth of M-money in small business; identify
the benefits of the growth of M-money to the
people and to determine the advantage of
growth of M-money in economic issues. Data
were collected through questionnaire,
unstructured interview and observations. The
Statistical Package for Social Science (SPSS)
version 20 was used for data analysis. The study
shows that about 97.5% of 120 people they use
M-money Service and only 2.5% of 120 do not
use the service frequently. This entail that a
large group of people in Iringa Municipality use
M-money Service as compared to those who do
not. The results further shows that 96% the M- money service help to increase the capital of the
people in the Municipality, followed by 94% of
the benefits is for helping parents with different
family problem.
The rapid expansion of cell phone usage in
Iringa has been triggered by a highly
competitive market and service diversification,
with the operators now providing different cell
phone services including M-money Service
which in turn provides Socio-economic impact
to the people around. According to the study
about 98% of the respondents the M-money
service benefits the socially and economically.
M-money service gives people different
opportunities , About 99% of the respondents
said the service gives them opportunity as an
employment which enables them to pay tax and
school fees to their children. Furthermore, with
the m-money service due to provision of tax in
the business are enables the development of
towns and municipality. The study shows that
about 100% the M-money service enables the
development of towns and centers. The only
challenge that hinder is the availability of
mobile phone networks, in some cases the
network coverage limit the provision of the
service especially due to expansion of the
Municipality.
Introduction
The proliferation of mobile money services is
imminent. They promise many new benefits for
Page 2 of 17
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 9
Setember 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 136
users, and are undoubtedly going to shape the
telecommunications, technology and financial
services industries (Ernst & Young Ltd, 2015).
Technology innovation and new transaction
types are changing the mobile money landscape,
and opening up opportunities for a range of
industry participants. The contactless system is
poised to take off, offering multiple service
capabilities and a unified platform to generate
greater convenience for users. As it develops,
each market will need to understand customers’
demands, and develop its own ecosystem and
business models. A key facilitator will be
converging regulation and legislation which
needs to address fraud and money laundering
issues (Ernst & Young Ltd, 2015 and Donovan,
2012).
According to Jeniper, 2013 and Msavange, 2015
the growth in the last decade has made the
mobile phone as indispensable as the wallet;
many do not leave home without it. The
universal nature of mobile communications has
the potential to vastly improve and transform
access to financial and transaction services for
people, including the developing economies.
The universal nature of mobile communications
has the potential to vastly improve and transform
access to financial and transaction services for
people, including the developing economies.
Background information
Mobile money (m-money thereafter) is
becoming increasingly popular across the globe.
Mobile money is a provision of financial
services through a mobile device. The definition
encompasses a range of services, including
payments, finance, and banking. Special
contactless technologies are available that allow
phones to transfer money to contactless cash
registers (Donovan, 2012).
This remarkable development of m- money
around the world over the past few years is the
result of the increase in mobile phone
ownership. About 150 million mobile phone
users worldwide use their handsets for mobile
money transfer in 2013. In 2018 is predicted
there will be 400 million mobile money transfer
users (Jeniper, 2013).
The GSMA's fourth annual Mobile Financial
Services State of the Industry Report said the
number of active mobile money customers
increased by more than 40 per cent in 2014 to
100 million people. According to the World
Bank's Global Findex Database for 2014, 12
percent of adults in Sub-Saharan Africa have a
mobile money account, compared to just 2 per
cent of adults worldwide.
In Tanzania Mobile money service is growing
fast since its introduction in the country in 2008
when Vodacom introduced mobile money
service through M-PESA. In June 2009, 14
months later M-PESA in Tanzania had 280,000
Page 3 of 17
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 9
Setember 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 137
subscribers and 1,000 agents (Rasmussen,
2009). Since 2000 there was six new mobile
phone companies appeared on the market in
Tanzania. Some of the company tends to change
their former names and assign new once. In
terms of market shares, different companies,
namely Vodacom and Airtel (former Celte and
Zain), Tigo and others are faring quite well
(Hassan and Semkwiji, 2011).
There is a big relationship between increasing
mobile phone ownership with the introduction
and usage of m-money service (GSMA, 2011).
The mobile money community watched the
adoption of mobile money services in Tanzania
with great interest (Rasmussen, 2009).According
to the Tanzania Communication Regulation
Authority (TCRA), the mobile market in
Tanzania is growing in a steadfast manner and
has managed to break the 52% penetration
barrier as of mid-June 2011. Beyond June 2011,
it was estimated that over 22 million Tanzanians
were connected via mobile phones (TCRA,
2011).Mobile money provides consumers with
access to a relatively inexpensive and reliable
way of performing financial transactions that
can potentially augment money liquidity and
ameliorate crime-related risk
(Economidesy&Jeziorskiz, 2015).
Consequently, the rate of m-money use is
highest among urban and banked households,
and households living above the poverty line.
The Dar-es-Salaam region has the highest
percentage of households with m-money users at
75 percent, and Kilimanjaro has the second
largest percentage of households that use m- money (58 percent of the region’s population).
In Iringa region there is a growth up to 35% of
m-money service (InterMedia, 2014).
Statement of the Problem
Many studies have examined the usage of
mobile phones worldwide (Donner, 2008;
Msavange, 2015; Hassan and Semkwiji 2011;
and GSMA, 2007). Few studies have been done
in Iringa Region, particularly to determine the
usage of mobile phone in relation to ownership
(Mpogole et al, 2011) and the study on Mobile
Money Service as an Opportunity for the
Growth of Commercial Banks in Tanzania
(Mwaikali, 2013). Also, according to InterMedia
about 35% in Iringa region, there is a usage of
m-money service, but there is no study
conducted to know the influence of expansion of
the service from 20% in 2009 to 35% in 2015 in
Iringa Municipality.
This is the knowledge gap the study intends to
address. It is mainly important to know the
factors influencing the growth of M-money
while there is normal traditional banking system.
The study will take a critical stance towards the
impact of growth of m-money in Iringa
Municipality Tanzania. The emphasize is to
why there is an increase growth of m-money,
and the study aim to emphasize that m-money
