From Redlining to M-Pesa: The Role of the Entrepreneurial State Behind Innovative Technology to Deliver an Inclusive Financial Sector

The actions of the state are consistently erased from the narrative of innovation within financialised capitalism. This paper contributes to the body of literature on the entrepreneurial state by documenting how state intervention in developing economies is not limited to capital intensive projects and proven technologies but helps to develop markets and facilitate innovation and entrepreneurship, ultimately leading to economic growth. We also document how entrepreneurial states collaborate across borders. These ideas are exemplified by the evolution of state intervention in Kenya leading to the emergence of the world-recognised mobile payment service M-Pesa. The case of M-Pesa illustrates how public-private partnerships, the collaboration in search for commercial opportunities by British and Kenyan governments, together with an enabling regulatory environment, facilitate technological innovation as a means of enhancing financial inclusion. This discussion emphasises the role played by the state, in contrast to that of the private sector and disruptive innovation.