Factors affecting effective capacity in mobile phone money transfer services:A case of Safaricom M-Pesa services

Abstract

This study sought to determine the factors affecting effective capacity in mobile money transfer services. It involved a case of Safaricom’s M-pesa service. The study also sought to identify the challenges facing the company in managing transactions capacity and how the capacity of the money transfer service can be effectively managed. Primary data for this study was collected through questionnaires administered to persons offering M-pesa services. Secondary data was obtained from the company intranet and other company reports. The collected data was sorted and organized for analysis. Data collected was analyzed using descriptive statistics. The study found that effective capacity in the money transfer service has not been optimally managed in a way that would ensure effective capacity in the money transfer industry. The study also found that the current M-pesa capacity is constrained thereby negatively affecting the quality of services. Capacity has been affected by variables among them the following: cash flow and liquidity management, technology, quality of service, government regulation, cash in transit and capacity management. From the study findings, it can be inferred that an effective capacity management will enhance the quality of the money transfer service. In this study, a large percentage of respondents (80%) reported that the M-pesa money transfer service faces challenges that affect its effective capacity. A further 42% of the respondents strongly agreed that system delays represent the greatest challenge facing the service. The results of the study show that the current M-pesa capacity does not fully meet the expectation of the customers. This implies that better management of the various factors affecting effective capacity is likely to improve the M-pesa money transfer service.