A cellphone-based system that allows people to transfer money and pay bills without a bank account is transforming business in Kenya.

Only 19 per cent of adults among Kenya's 39 million people have access to a formal bank account, according to a 2009 survey by the Financial Sector Deepening Trust, established by Canada and four other countries to provide greater access to the financial sector in Tanzania, Kenya's neighbour.

Cellphone-based mobile money transfer systems are not officially considered banking services under Kenyan regulations. But since the introduction of M-Pesa, the first such service, three years ago, Kenyans have used it to transfer $4.4 billion.

"It has changed the economy so speedily, everyone is happy," said businessman Amos Mwaniki, who runs a photocopy business in Nairobi. "Everybody in Kenya now today, he can do business … wherever he is, wherever she is."

Sarah Kigwama is one of 12 million Kenyans — 30 per cent of the population — who were making use of the mobile money transfer service run by a wireless provider as of September.

Kigwama, 37, works as a housekeeper in the bustling city of Nairobi. Like many other urban workers, the mother of two children, aged eight and 12, helps support relatives in poor rural areas. Each month, she sends about $20 of her monthly salary of $115 to her mother, who lives in a rural village about 200 kilometres away.

Although only one per cent of Kenyans have a land line, Kigwama is among the 70 per cent who have a cellphone.

"This mobile has changed, really, my life," she said.

'This mobile has changed, really, my life,' said Sarah Kigwama, 38, who uses her phone to transfer money instantly to her mother, who lives 200 kilometres away. (CBC)

Before the introduction of M-Pesa — the money transfer service offered by Safaricom, the country's largest wireless provider — she had to put the cash in an envelope, send it with someone on a country bus, and hope the person she gave it to would deliver it.

Now, she can send the money to her mother instantly and more securely with the push of a few buttons.

"I feel so good because if she has no food in the house she just goes and buys food immediately — no suffering about hunger again," she said.

Within seconds of transferring about $2, she got a call back.

"They have received it and they are very happy," she said with a laugh.

Several other wireless providers in Kenya offer mobile payment systems similar to M-Pesa: Zain offers Zap, Orange offers Orange Money and Yu offers Yucash.

Daniel Mwaura has been an M-Pesa agent since the service launched in 2007. His M-Pesa shop, which is located next to a pharmacy he owns, gets 500 customers a day.

"The cellphone has revolutionized the way we do business," he said, "the way we communicate with one another, and the way we reach out to each other."

With files from Natasha Sweeney