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International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.


Vol.2, Issue No.3, Jul- Sep 2016




Research Scholar Derivatives find their origin as early as seventeenth century
Department of Commerce
when speculative traders used forwards and options to trade
Osmania University
Hyderabad-500007. in agricultural commodities. The system was extremely
unsophisticated, unorganized and lacked legal frame work. As
a result, the market went through frequent collapses .But, as
Derivative Market the markets matured, the systems and institutions got evolved
Cash Market in the process, to make derivatives as the” most significant
Financial Instrument financial innovation of their times. This paper aims to study
the impact of derivatives on cash market which also helps in
© 2016 IJARSH. All rights reserved.
assessing the popularity of derivatives in relation to cash

Cash market is the market in which trades are made for the
immediate sale or purchase of securities. In cash market
buyers pay the market price for the securities on the spot. In

Received: 17 Feb 2016

equity market ownership is transferred promptly and payment
Revised: 25 Jun 2016 is made upon delivery.
Accepted: 28 Jun 2016
Published: 10 Sep 2016 In the study an attempt has been made to analyse the turnover
of Cash market (NSE) in India since the introduction of
derivatives. For this, month-wise information of 5 years has
been collected and analysis has been collected and analysis
has been in number of stages.
In the process of analysis monthly average for each of the
year, along with standard deviation and co-efficient of
variation has been calculated. . It has been calculated to know
which particular market is consistent in the trading activity.

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

Inconsistency indicates high volatility. market has examined the impact of

Finally the correlation between cash market derivative trading on the spot market
and derivative market and average daily volatility of seven scrips. The result
turnover of cash market and derivatives indicates that introduction of derivatives
market has been calculated. The correlation trading has resulted in a reduction in the spot
indicates the relationship between cash and market volatility of underlying stock.
derivatives market and average daily Kailash Chandra and Sham Bhat3 in their
turnover of cash market and derivatives article “An empirical analysis of the impact
market. A high correlation indicates that as of futures on spot market volatility evidence
the cash market is increasing derivatives from National Stock Exchange have
market is also increasing. On the other hand, examined empirically the impact of futures
a negative value indicates one market is on the spot market volatility. The study
increasing and other market showing a reveals the strong evidence that spot market
declining trend. Finally consolidated table is time varying and indicates that futures
has been prepared to assess the actual trend market plays an important function of price
over five years period. The below tables discovery and allows transfer of risk through
indicate the Mean, Standard Deviation, Co- hedging and generates to reduce spot market
efficient of variation and Correlation of volatility.
turnover and average turnover of NSE cash Ravi Agarwal, Shiva Kumar, Wasif
and derivatives market. Muthar and Hemanth Abar4 in their
2. REVIEW OF LITERATURE article “Impact of derivatives on Indian
Surjit Bhattacharya and Arunima stock market” have indicated that the impact
Saxena in their article “Stock Futures of derivatives on Indian Stock market could
introduction and its impact on Indian spot be studied by employing various study
market” have examined how stock futures models like using variance in Nifty and
introduction has affected underlying scrips Nifty Junior. They found that futures
in the spot market. They found that volatility contribute towards stabilizing the market
h increased after futures introduction. hence derivatives contributes towards
Abhilash S.Nair in his article “Impact of stabilizing stock market.
derivatives trading on volatility of the
underlying” evidence from Indian stock

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

Sasidaran5 in his article “A critical 4. SCOPE OF THE STUDY

evaluation of the performance of F&O The study will be conducted based on the
segment in Indian capital market” has monthly turnover covering a period from
analyzed the performance of F&O segment 2010-11 to 2015-16 derivatives in Indian
in Indian Capital market. It reveals that since capital market.
inception of derivative trading in Indian
stock market. They found that there is a high
turnover in respect of future contract. Secondary data will be used in this study.
3. RESEARCH GAP The secondary data will be collected from
The literature survey reveals that a lot has various published and unpublished sources
been done derivative market, yet there is which include reports from Stock
need to study the impact of derivatives on Exchanges, SEBI, RBI and annual reports,
the volatility of cash market since secondary ET special issues etc.
market is impacted by the number of new 5.1 GROWTH TRENDS OF DERIVATIVE

derivative instruments which are being PRODUCTS

introduced time to time. A study on impact An attempt has been made to analyse the

of derivatives on cash market will also help turnover of c derivative market. In the

in assessing the popularity of derivatives in process of analysis monthly average for each

relation to cash market. of the year, along with standard deviation

4. OBJECTIVES OF THE STUDY and co-efficient of variation has been

A successful completion of a project is calculated. Co-efficient of variation has been

based on the objective(s) of the study that calculated to know which particular market

could be stated as under: is consistent in the trading activity.

To analyze the turnover of cash market Inconsistency indicates high volatility.

& Derivatives market (NSE) in India.

To assess product wise growth trend in 6. DATA ANLYSIS & INTERPRETATION

derivatives turnover (Index futures,

stock futures, index options, stock
To determine compound annual growth
rate of trading volume of cash market.

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

Table 1

Index Stock Stock Grand
Month Futures Growth Futures Growth Index Options Growth Options Growth Total Growth

April 2,79,572 100 4,09,844 100 9,05,472 100 76,731 100 16,71,620 100

May 3,95,613 142 4,31,593 105 12,17,458 134 79,832 104 21,24,496 127

June 3,72,266 133 4,21,843 103 11,69,943 129 71,547 93 20,35,599 122

July 2,89,423 104 4,23,422 103 10,43,354 115 73,710 96 18,29,910 109

Aug 2,99,130 107 4,96,267 121 11,57,466 128 1,00,865 131 20,53,728 123

Sep 3,83,872 137 5,55,581 136 16,88,469 186 1,08,470 141 27,36,392 164

Oct 4,02,457 144 6,08,830 149 17,05,514 188 1,07,693 140 28,24,493 169

Nov 4,24,789 152 5,39,872 132 19,02,944 210 98,241 128 29,65,846 177

Dec 3,22,793 115 4,32,644 106 15,19,280 168 82,391 107 23,57,109 141

Jan 3,84,484 138 4,11,149 100 19,62,516 217 83,685 109 28,41,834 170

Feb 4,02,759 144 4,01,307 98 20,44,353 226 80,876 105 29,29,295 175

Mar 3,99,595 143 3,63,405 89 20,48,597 226 66,303 86 28,77,900 172

Total 43,56,755 54,95,757 183,65,366 10,30,344 292,48,221

Mean 3,63,063 4,57,980 15,30,447 85,862 24,37,352

S.D. 50,821 74,443 4,16,550 14,342 4,75,445

CV 14 16 27 17 20
Table 2

Index Stock Stock Grand
Month Futures Growth Futures Growth Index Options Growth Options Growth Total Growth

April 2,82,303 100 3,53,159 100 16,45,881 100 69,958 100 23,51,300 100

May 3,05,745 108 3,36,689 95 18,92,896 115 69,808 100 26,05,138 111

June 2,65,178 94 3,22,695 91 17,84,570 108 65,733 94 24,38,177 104

July 2,65,641 94 3,49,891 99 18,67,726 113 81,708 117 25,64,965 109

Aug 3,47,177 123 3,33,791 95 22,09,524 134 73,258 105 29,63,749 126

Sep 3,46,826 123 3,26,290 92 20,85,730 127 76,418 109 28,35,264 121

Oct 2,65,945 94 2,79,971 79 16,21,119 98 66,187 95 22,33,221 95

Nov 3,12,139 111 3,05,421 86 20,27,236 123 71,762 103 27,16,559 116

Dec 3,07,198 109 2,79,921 79 21,08,751 128 72,993 104 27,68,863 118

Jan 2,50,738 89 3,50,848 99 15,42,542 94 1,07,359 153 22,51,487 96

Feb 2,91,138 103 4,51,869 128 17,77,220 108 1,21,551 174 26,41,778 112

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

Mar 3,37,972 120 3,84,126 109 21,56,837 131 1,00,296 143 29,79,231 127

Total 35,77,998 40,74,671 227,20,032 9,77,031 313,49,732

Mean 2,98,167 3,39,556 18,93,336 81,419 26,12,478

S.D. 33,607 46,509 2,24,645 18,191 2,55,616

CV 11 14 12 22 10
Table 3


Index Stock Stock Grand
Month Futures Growth Futures Growth Index Options Growth Options Growth Total Growth

April 2,28,989 100 3,03,853 100 15,73,860 100 1,00,615 100 22,07,317 100

May 2,66,002 116 3,03,008 100 20,37,937 129 1,12,897 112 27,19,843 123

June 2,64,304 115 3,04,796 100 19,63,477 125 1,08,129 107 26,40,706 120

July 2,24,504 98 3,35,785 111 17,57,190 112 1,35,603 135 24,53,083 111

Aug 1,99,628 75 3,15,699 104 17,73,000 113 1,43,841 143 24,32,169 110

Sep 2,06,910 78 3,49,877 115 18,70,592 119 1,64,569 164 25,91,949 117

Oct 2,16,004 96 3,88,103 128 19,07,596 121 2,02,506 201 27,14,209 123

Nov 1,69,757 85 3,49,431 115 17,81,059 113 1,79,570 178 24,79,817 112

Dec 1,76,492 85 3,92,327 129 18,93,973 120 1,77,600 177 26,40,393 120

Jan 1,90,094 88 4,95,366 163 19,66,918 125 2,98,597 297 29,50,975 134

Feb 1,79,682 106 3,61,294 119 18,39,346 117 1,94,775 194 25,75,097 117

Mar 2,04,763 116 3,24,332 107 24,16,627 154 1,81,724 181 31,27,446 142

Total 25,27,131 42,23,872 227,81,574 20,00,427 315,33,004

Mean 2,10,594 3,51,989 18,98,465 1,66,702 26,27,750

S.D. 31,464 54,667 2,03,623 54,074 2,41,570

CV 15 16 11 5,29,972 83,35,644

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

Table 4

Index Stock Index Stock Grand
Month Futures Growth Futures Growth Options Growth Options Growth Total Growth

April 2,08,590 100 3,65,064 100 21,92,470 100 2,44,039 100 30,10,163 100

May 2,45,783 118 4,09,851 112 26,21,647 120 2,26,521 93 35,03,801 116

June 2,46,351 118 3,43,493 94 24,37,937 111 1,63,105 67 31,90,887 106

July 2,53,644 122 4,28,504 117 22,51,414 103 2,46,830 101 31,80,393 106

Aug 3,27,735 157 4,10,088 112 29,00,978 132 1,75,120 72 38,13,921 127

Sep 3,17,154 152 3,87,799 106 25,24,746 115 1,51,859 62 33,81,558 112

Oct 2,97,026 142 4,16,432 114 22,81,809 104 2,10,799 86 32,06,066 107

Nov 2,54,056 122 3,97,676 109 20,79,938 95 1,66,834 68 28,98,504 96

Dec 2,33,973 112 4,24,128 116 19,68,622 90 1,61,240 66 27,87,962 93

Jan 2,63,691 126 4,85,233 133 23,20,692 106 2,54,757 104 33,24,374 110

Feb 1,81,208 87 3,59,910 99 18,80,093 86 1,64,671 67 25,85,882 86

Mar 2,53,892 122 5,21,103 143 23,06,996 105 2,43,713 100 33,25,705 110

Total 30,83,103 49,49,282 277,67,341 24,09,489 382,09,215

Mean 2,56,925 4,12,440 23,13,945 2,00,791 31,84,101

S.D. 41,730 50,553 2,83,024 40,455 3,30,942

CV 16 12 12 20 10

Table 5


Index Stock Index Stock Grand
Month Futures Growth Futures Growth Options Growth Options Growth Total Growth

April 2,19,025 100 5,41,303 100 17,31,584 100 2,17,914 100 27,09,826 100

May 3,82,840 175 8,08,882 149 26,03,964 150 2,76,020 127 40,71,706 150

June 3,39,617 155 8,34,723 154 28,97,812 167 2,95,986 136 43,68,139 161

July 3,66,247 167 8,04,572 149 33,96,550 196 2,96,531 136 48,63,900 179

Aug 2,86,237 131 6,09,162 113 30,08,386 174 2,51,040 115 41,54,824 153

Sep 3,32,651 152 7,34,203 136 37,24,832 215 3,10,588 143 51,02,274 188

Oct 2,78,770 127 5,54,556 102 30,29,192 175 2,70,218 124 41,32,735 153

Nov 2,61,325 119 6,28,954 116 29,48,557 170 2,71,676 125 41,10,512 152

Dec 3,54,123 162 6,35,492 117 41,36,955 239 2,50,181 115 53,76,751 198
Jan 241 55,89,879

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

4,08,656 187 7,14,699 132 41,64,840 3,01,684 138 206

Feb 4,38,460 200 7,26,572 134 39,91,306 231 2,75,801 127 54,32,139 200

Mar 4,39,265 201 6,98,648 129 42,88,684 248 2,64,915 122 56,91,512 210

Total 41,07,215 82,91,766 399,22,663 32,82,552 556,04,197

Mean 3,42,268 6,90,981 33,26,889 2,73,546 46,33,683

S.D. 70,351 98,099 7,67,108 26,013 8,70,585

CV 21 14 23 10 19

Table 6

Index Stock Index Stock Grand
Month Futures Growth Futures Growth Options Growth Options Growth Total Growth

April 3,85,461 100 6,76,410 100 43,53,956 100 2,83,933 100 56,99,759 100

May 3,76,622 98 6,28,531 93 39,52,523 91 2,43,048 86 52,00,723 91

June 4,03,908 105 6,12,250 91 42,41,973 97 2,40,387 85 54,98,519 96

July 3,91,736 102 7,19,881 106 42,70,405 98 3,23,551 114 57,05,572 100

Aug 4,35,122 113 7,34,924 109 43,90,964 101 3,37,664 119 58,98,674 103

Sep 4,58,216 119 5,70,325 84 37,83,802 87 2,19,874 77 50,32,217 88

Oct 3,35,582 87 6,27,671 93 31,80,458 73 2,85,918 101 44,29,629 78

Nov 2,89,438 75 5,97,633 88 31,97,358 73 2,62,625 92 43,47,053 76

Dec 3,00,357 78 6,30,521 93 34,19,734 79 2,80,560 99 46,31,172 81

Jan 3,79,136 98 6,98,909 103 43,91,173 101 3,59,810 127 58,29,028 102

Feb 4,22,228 110 6,84,616 101 51,26,280 118 3,39,620 120 65,72,744 115

Mar 3,79,307 98 6,46,936 96 46,43,305 107 3,11,185 110 59,80,733 105

Total 45,57,114 78,28,606 489,51,931 34,88,174 648,25,824

Mean 3,79,759 6,52,384 40,79,328 2,90,681 54,02,152

S.D. 50,640 50,613 5,93,238 44,366 6,84,543

CV 13 8 15 15 13

7. CONCLUSION declining trend. The co-efficient of variation

The NSE Cash and Derivative market of derivatives market indicate there is a lot
indicate that it is increasing continuously of inconsistency. The correlation between
with a co-efficient of variation which ranges cash market and derivative market in NSE
between low of 10 percent and high of 32 indicates that more or less there is positive
percent. Derivatives market has shown a correlation between two which means both

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

cash market and derivatives market turnover between 11 – 21 percent. The case is same
are increasing simultaneously. This reveals respectively with Index Options, stock
that in the case of NSE cash market and Futures and Stock Options.
derivatives market both are growing at a 8. COMPOUNDED MONTHLY GROWTH
time. RATE

The NSE derivative market indicates the Compound monthly growth rate for
growth trend of Index Futures which has derivative instrument (NSE) has been
been a continuous rise in its mean turnover. calculated to assess the compound monthly
The co-efficient of variations of Index growth rate of index futures, stock futures,
Futures indicates there is more or less index options and stock options.
inconsistency in its turnover which ranges
Table: 7

Months 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

MAR 2,68,266 3,99,595 3,37,972 2,04,763 2,53,892 4,39,265

APR 2,79,572 2,82,303 2,28,989 2,08,590 2,19,025 3,85,461

MAY 3,95,613 3,05,745 2,66,002 2,45,783 3,82,840 3,76,622

JUN 3,72,266 2,65,178 2,64,304 2,46,351 3,39,617 4,03,908

JUL 2,89,423 2,65,641 2,24,504 2,53,644 3,66,247 3,91,736

AUG 2,99,130 3,47,177 1,99,628 3,27,735 2,86,237 4,35,122

SEP 3,83,872 3,46,826 2,06,910 3,17,154 3,32,651 4,58,216

OCT 4,02,457 2,65,945 2,16,004 2,97,026 2,78,770 3,35,582

NOV 4,24,789 3,12,139 1,69,757 2,54,056 2,61,325 2,89,438

DEC 3,22,793 3,07,198 1,76,492 2,33,973 3,54,123 3,00,357

JAN 3,84,484 2,50,738 1,90,094 2,63,691 4,08,656 3,79,136

FEB 4,02,759 2,91,138 1,79,682 1,81,208 4,38,460 4,22,228

MAR 3,99,595 3,37,972 2,04,763 2,53,892 4,39,265 3,79,307

CMGR 3.38 (1.39) (4.09) 1.81 4.67 (1.22)

Table: 8
Months 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
MAR 4,05,316 3,63,405 3,84,126 3,24,332 5,21,103 6,98,648
APR 4,09,844 3,53,159 3,03,853 3,65,064 5,41,303 6,76,410
MAY 4,31,593 3,36,689 3,03,008 4,09,851 8,08,882 6,28,531

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

JUN 4,21,843 3,22,695 3,04,796 3,43,493 8,34,723 6,12,250

JUL 4,23,422 3,49,891 3,35,785 4,28,504 8,04,572 7,19,881
AUG 4,96,267 3,33,791 3,15,699 4,10,088 6,09,162 7,34,924
SEP 5,55,581 3,26,290 3,49,877 3,87,799 7,34,203 5,70,325
OCT 6,08,830 2,79,971 3,88,103 4,16,432 5,54,556 6,27,671
NOV 5,39,872 3,05,421 3,49,431 3,97,676 6,28,954 5,97,633
DEC 4,32,644 2,79,921 3,92,327 4,24,128 6,35,492 6,30,521
JAN 4,11,149 3,50,848 4,95,366 4,85,233 7,14,699 6,98,909
FEB 4,01,307 4,51,869 3,61,294 3,59,910 7,26,572 6,84,616

MAR 3,63,405 3,84,126 3,24,332 5,21,103 6,98,648 6,46,936

CMGR (0.91) 0.46 (1.40) 4.03 2.47 (0.64)

Table 9

Months 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

MAR 8,43,167 20,48,597 21,56,837 24,16,627 23,06,996 42,88,684

APR 9,05,472 16,45,881 15,73,860 21,92,470 17,31,584 43,53,956
MAY 12,17,458 18,92,896 20,37,937 26,21,647 26,03,964 39,52,523
JUN 11,69,943 17,84,570 19,63,477 24,37,937 28,97,812 42,41,973
JUL 10,43,354 18,67,726 17,57,190 22,51,414 33,96,550 42,70,405
AUG 11,57,466 22,09,524 17,73,000 29,00,978 30,08,386 43,90,964
SEP 16,88,469 20,85,730 18,70,592 25,24,746 37,24,832 37,83,802
OCT 17,05,514 16,21,119 19,07,596 22,81,809 30,29,192 31,80,458
NOV 19,02,944 20,27,236 17,81,059 20,79,938 29,48,557 31,97,358
DEC 15,19,280 21,08,751 18,93,973 19,68,622 41,36,955 34,19,734
JAN 19,62,516 15,42,542 19,66,918 23,20,692 41,64,840 43,91,173
FEB 20,44,353 17,77,220 18,39,346 18,80,093 39,91,306 51,26,280

MAR 20,48,597 21,56,837 24,16,627 23,06,996 42,88,684 46,43,305

CMGR 7.68 0.43 0.95 (0.39) 5.30 0.66

Table 10

Months 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

MAR 51,398 66,303 1,00,296 1,81,724 2,43,713 2,64,915
APR 76,731 69,958 1,00,615 2,44,039 2,17,914 2,83,933
MAY 79,832 69,808 1,12,897 2,26,521 2,76,020 2,43,048
JUN 71,547 65,733 1,08,129 1,63,105 2,95,986 2,40,387
JUL 73,710 81,708 1,35,603 2,46,830 2,96,531 3,23,551
AUG 1,00,865 73,258 1,43,841 1,75,120 2,51,040 3,37,664
SEP 1,08,470 76,418 1,64,569 1,51,859 3,10,588 2,19,874
OCT 1,07,693 66,187 2,02,506 2,10,799 2,70,218 2,85,918

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

NOV 98,241 71,762 1,79,570 1,66,834 2,71,676 2,62,625

DEC 82,391 72,993 1,77,600 1,61,240 2,50,181 2,80,560
JAN 83,685 1,07,359 2,98,597 2,54,757 3,01,684 3,59,810
FEB 80,876 1,21,551 1,94,775 1,64,671 2,75,801 3,39,620

MAR 66,303 1,00,296 1,81,724 2,43,713 2,64,915 3,11,185

CMGR 2.14 3.51 5.08 2.48 0.70 1.35


The study of Compound monthly growth NSE
rate to assess the growth of cash and The average turnover of cash market NSE
derivative market for 6years reveals that it is has been calculated from the period2010-11
fluctuating and there is no consistency in the to 2015-16 evaluates the performance of
market. cash market over the years.
Table 11
Turnover Cash Market NSE (in crores)
Month 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total
April 2,76,566 2,28,348 1,98,324 2,10,799 2,72,703 3,79,349 13,55,290
May 2,84,625 2,33,876 2,16,755 2,44,392 4,36,022 3,61,935 15,33,213
June 2,86,109 2,22,457 2,02,104 2,07,944 4,21,688 3,33,289 14,65,647
July 2,78,551 2,30,003 2,10,325 2,43,390 3,91,428 3,83,484 14,93,791
Aug 3,11,994 2,35,253 2,04,874 2,50,758 2,94,758 4,19,932 14,66,811
Sep 3,29,869 2,35,270 2,40,189 2,43,576 3,83,261 3,28,412 15,17,001
Oct 3,60,472 1,93,293 2,39,795 2,37,908 2,71,191 3,33,801 13,98,552
Nov 3,63,993 2,06,344 2,20,933 2,17,782 3,29,638 3,07,150 14,28,058
Dec 2,95,685 1,88,886 2,40,325 2,30,817 3,54,473 3,34,954 14,14,323
Jan 2,67,332 2,36,872 2,95,415 2,55,630 3,83,872 3,52,084 15,35,575
Feb 2,66,504 327808 2,26,642 1,88,751 3,92,718 3,45,646 15,59,318
Mar 2,55,712 2,72,482 2,12,598 2,76,741 3,97,903 3,56,947 14,95,642
Total 24,92,179 3,27,808 27,08,279 28,08,488 43,29,655 3,56,947 176,63,221
Mean 3,11,522 3,27,808 2,25,690 2,34,041 3,60,805 356947 1471935.083
S.D. 1,56,075 94,630 26,516 24,152 56,327 1,03,042 62,386
CV 50 29 12 10 16 29 4

CONCLUSION average turnover is growing in the recent

The average daily turnover of the cash years.
market is an increasing trend except in the Hence, it can be concluded that the
year 2012-13 and 2013-14.It reveals that performance of derivative market drives the
performance of cash market.

Chandrika Palle/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

Abhilash S. Nair “Impact on derivative trading on volatility of the
underlying evidence from Stock market” IIM Kozhikode,
kerala vol.3./FIM/2008/01
Dr.Sasidharan K “A critical evaluation of the performance F&O
segment in Indian Capital market, paper prepared in
2006,unpublished available at:www.derivatives
Kailash Chander & K.Sham Bat “An empirical analysis of the
impact of futures on spot market volatility evidence from
National Stock Exchange, India “,Indian Journal for
economics & Business,Dec2008.
Ravi Agarwal,Shiva Kumar ,wasi F mukhtar,Hemanth
Abar,”Impact of Derivatives on Indian Stock
market”presented in Indian Finance summit 2009 organised
by BIMTECH,Greater Noida, India Electronic copy
available at Spot
markets” published in prerana, vol.1. (2009).
Surjit Bhattacharya & Arunima Saxena “Stock Futures Introduction
& impact on Indian

International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.


Vol.2, Issue No.3, Jul- Sep 2016




Research Scholar The mobile-Government (m-Government) is one of the most
Department of
important concepts that have been in the top consideration for
Communication & Journalism
Osmania University the last decades. The purpose of the m-Government is to
Hyderabad-500007. provide a suitable and reliable infrastructure for citizens to
access services easily. It also provides better opportunities to
people to participate in social events and activities. By this
M- Government means, providing tools for implementing the m-Government
Rural Iran activities is of most significance. In Iran, m-Government
Development initiative was launched as a part of the country’s overall
information technology plan (for instance: e-government)
© 2016 IJARSH. All rights reserved.
focused on ICT as a tool to reform public organizations. In this
paper, explored about role of M-Government in development
of rural and urban areas of Iran were discussed.


The concept of M- Government began with “electronic

government”. M-Government is a subset of e-government. E-
Received: 2 Feb 2016 Government is the use of information and communication
Revised: 23 Mar 2016
Accepted: 28 May 2016 technologies (ICTs) to improve the activities of public sector
Published: 10 Sep 2016
organizations. In the case of m-government, those ICTs are
limited to mobile and/or wireless technologies like
cellular/mobile phones and laptops and personal digital
assistants (PDAs) connected to wireless local area networks
(LANs). M-Government can help make public information
and government services available "anytime, anywhere" to
citizens and officials.

Aliasghar Kodhaverdi/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

Until while ago the concept of e-government the UN in 2010, although Iran is generally
was a whole unknown phenomena in Iran, lag behind other markets in the rankings of
which it may still be for a large group of e-government implementation, there has
citizens. During the year of 1382 ( 21 march been improvement in the region since the
2003 to march 2004) the Iranian Parliament 2008 survey.
approved the allowance of a budget
Iran, (Persia) or officially the Islamic
equivalent to 100 million USD for the
republic of Iran (as it is called today) is a
purpose of implementing and developing of
large Western Asian country located in the
information and communication
Middle East, Central Asia and the Caucasus.
technologies in the public administration of
Its area equals the size of the United
Iran. From this time forth, the cabinet
Kingdom, France, Spain and Germany
authorized a comprehensive program for
combined. Iran borders Armenia, Azerbaijan
implementing several national information
and Turkmenistan to the north, Afghanistan
and communication projects. This program
and Pakistan to the east, and Iraq and
incorporated projects such as e-government,
Turkey to the west. In addition, it borders
e-commerce, e-banking, e-learning and e-
the Persian Gulf, across which lie Kuwait,
health. Recently introduced as a
Iraq, Saudi Arabia, Bahrain, Oman, Qatar
consequence of IT in the knowledge and
and the United Arab Emirates. Shia Islam is
information age and has been applied by
the official state religion and Persian the
many governments around the world in
official language. The people within present
practice. Iranian authorities also have
day Iran are the descendants of many of the
decided to take the essential methods
world’s oldest known civilizations. The
required for implementing e-government in
history of people in Iran covers over six
Iran. However, the large size of the
thousand years, and throughout history, Iran
government in Iran and many other
has been of great geostrategic importance
problems such as the lack of required legal,
because of its central location in Eurasia.
institutional and human resources
Iran is the founding member of the United
infrastructures make the planning and
Nations, NAM, OIC, OPEC and ECO. Iran
implementation a difficult task. With this in
is significant in international politics on
mind, it is refreshing to note that, according
accounts of its large supply of petroleum
to the E-Government Survey published by

Aliasghar Kodhaverdi/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

and regional influence. The name of Iran is a Asiimwe Edgar Napolean., (2007)
cognate of Aryan and literary means “land discussed in their paper “Continuous
of Aryans”. developments in mobile technology have led
to massive acquisition and adoption of
mobile devices at a fast pace. The
According to Antonio Cordella, Niccolo penetration of mobile use is higher in
Tempini (2015) there is a substantial developing countries than that in developed
literature on e-government that discusses countries. The emerging developments as
information and communication technology well as rapid adaptability of mobile
(ICT) as an instrument for reducing the role technologies have raised research interests
of bureaucracy in government organizations. in the field of mobile government (M-
The purpose of this paper is to offer a Government). The aim of this study is to
critical discussion of this literature and to investigate the current status of mobile
provide a complementary argument which government research. This study is based on
favors the use of ICT in the public sector to literature reviews. Different terms
support the operations of bureaucratic describing m-Government were used as
organizations. Based on the findings of a keywords to retrieve relevant literature
case study of the Venice Municipality in published in leading international journals
Italy the paper discusses how ICT can be and reputed conference proceedings. Then
used to support rather than eliminate the main thematic views of each retrieved
bureaucracy. Using the concepts of e- literature have explored.
bureaucracy and functional simplification
Ibrahim Kushchu, M. Halid Kuscu (2008)
and closure, the paper proposes evidence
highlighted in their paper “The changes in
and support for the argument that
the Internet and World Wide Web
bureaucracy should be preserved and
technologies and services lead to new
enhanced where e-government policies are
developments in the way e-government
concerned. Functional simplification and
efforts provide services to citizens and
closure are very valuable concepts for
businesses, and in the way governments
explaining why this should be a viable
handles their internal operations. One of the
revolutionary developments comes from

Aliasghar Kodhaverdi/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

adoption of wireless mobile technologies in delivery to citizens, improved services for

government related activities: m- the business, transparency, and
government. In this paper we present empowerment through information and
technological drivers of m-government and efficient government.
present cases where these technologies are
To achieve the goal of e-government,
being used. The paper concludes with
resources with public and positive mind-set
discussions of challenges for m-government
of the public and Government is imperative.
implementations now and in the future.
Availability of computer hard ware and
3. STATEMENT OF PROBLEM software, and inclination to use electronic
communication by public is very essential.
In the last half century, we have witnessed
But, in Iran the number of those who can
rapid technological advancement in every
afford to buy a computer, know English and
field especially in telecommunication sector.
access the internet is still quite minuscule.
Attempts to implement e-government
So to arrive at the goal of e-government
services in both developed and developing
mobile phones can be replaced with
countries has become alike. The main
computer hard ware and software and
objective to implement e-government is to
availability of internet. Mobile phones have
improve efficiency in providing government
a much wider dissemination of information
services to the common man and at the
throughout the country of Iran compared to
same time, it also empowers people of the
internet penetration through other means.
specific country. According to the UNDP
Indeed, the mobile infrastructure in Iran
(2003), the goals of e-government range
currently covers 95% of the country. And
from offering a more efficient delivery of
large percentage of the population use
services to the common man, to reform the
mobile phones. Moreover, a clear trend is
government and development of the country.
visible in increase in mobile subscription
For a developing country like Iran,
day by day, since 2013. At present, there are
therefore, e-Government would seem to be a
five mobile service providers in Iran. And
vehicle for accelerating the pace of
they are competing to increase their
development. The World Bank Group
subscription base day by day. Furthermore,
(2004) states that the objectives of e-
there is all likelihood of mobile usage
Government are to provide: better services

Aliasghar Kodhaverdi/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

expanding substantially among the and access to mobile users and level of
population of Iran in near future. This acts satisfaction among them.
as a platform in providing vast majority of 5. METHODOLOGY
Iran with the means to participate in mobile-
In the present study, quantitative method is
government (m-Government).
used. The purpose of adopting a quantitative
Therefore, researcher assumes that there is method for data collection is to develop the
vast potential of m-Government to function overall understanding of the role of mobile
as a driving force for e-government services in providing M- Government to
implementation in Iran as an appropriate mobile users. Data analysis done with help
issue for exploration. Researching of this of SPSS.
issue is appreciable as delivery of various 5.1 SOURCES OF COLLECTING DATA

services can be made at personal level, and The research is undertaken by way of a
identification of barriers for the survey. Survey research utilizes instruments
implementation of e-government in Iran can such as questionnaires and interviews to
be found. Appropriate e-government gather information from groups of
implement strategy can be formulated respondents and is usually based upon data
through m-government as mobile can be obtained from participation observation
easily affordable, penetration of mobile (Borg & Gall, 1989). Survey research, as
internet services is expanding and mobile defined by Kerlinger (1986 p. 377), is the
usage is increasing at a rapid pace in Iran. type of research that “studies populations by
As relevant conceptual frame work is selecting and studying samples chosen from
available and hence, it is both necessary and the population to discover the relative
timely for this study to be undertaken. incidence, distribution and interrelations of
sociological and psychological variables.”
The social scientific nature of survey
1. To examine the socio-economic status of research is revealed by the nature of its
the mobile users. variables, which can be classified as
sociological facts and opinions or attitudes.
2. To assess mobile applications usage for
Sociological facts are attributes of
various needs between citizens to citizens.
individuals that originate from their
3. To probe strength of internet connection
membership in social groups: gender,

Aliasghar Kodhaverdi/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

educational level, designation, occupation, Majority of the respondents 408(40.8%) in

category, mother tongue, languages known, the city have said that they have internet
place of birth, demographic variables, age, connection and followed by 231(23.1%) of
income, marital status. The psychological the respondents from village have said that
variables are the attitudes or feelings, they have internet connection on the mobile.
satisfaction-dissatisfaction as in this case. A Also 92(9.2%) of the respondents from city
survey design provides a quantitative or have said that they have no internet
numeric description of trends, attitudes, or connection. Only 269(26.9%) of the
opinions of a population by studying a respondents from the village have said that
sample of that population. From sample they do not have internet connection.
results, the researcher generalizes or makes 2. Timing Pattern of Internet Access *
claims about the population.(Creswell-2009) Place
The purpose of survey research is to Most of the respondents 253(25.3%) in the
generalize from a sample to a population so city have said that they can have access to
that inferences can be made about some internet connection seven days a week and
characteristic, attitude, or behavior of this followed by 264(26.4%) of the respondents
population (Babbie). Cross-sectional in the village have said that they can have
research design is used to collect data access to the internet sometimes .Also
through questionnaire from the respondents 3(0.3%) of the respondents in the city have
for the present study. said that they can rarely have access to the
internet. Only 24(2.4%) of the respondents
in the village have said that they can rarely
1. Internet Connection * Place have access to the internet. (Table .2, P.52)
3. Level of satisfaction on Internet Usage *
Place Total
City Village Majority of the respondents 364(36.4%) in
Yes Count 408 231 639 the city have said that they are not satisfied
% of Total 40.8% 23.1% 63.9% with internet usage and followed by
No Count 92 269 361 158(15.8%) of the respondents in the village
% of Total 9.2% 26.9% 36.1% have said that they are satisfied with internet
Count 500 500 1000 usage somewhat. Also 5(.5%) of the
% of Total 50.0% 50.0% 100.0% respondents in the city have said that they

Aliasghar Kodhaverdi/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

2. Timing Pattern of Internet Access * Place Place Total

City Village

Sometimes Count 89 264 353

% of Total 8.9% 26.4% 35.3%

Rarely Access Count 3 24 27

% of Total .3% 2.4% 2.7%

1-2 Days per Week Count 41 108 149

% of Total 4.1% 10.8% 14.9%

3-6 Days per Week Count 114 78 192

% of Total 11.4% 7.8% 19.2%

All the 7 Days of Week Count 253 26 279

% of Total 25.3% 2.6% 27.9%

Count 500 500 1000

% of Total 50.0% 50.0% 100.0%

3. Level of satisfaction on Internet Usage * Place Total


City Village

Not Applicable Count 47 268 315

% of Total 4.7% 26.8% 31.5%

Completely Satisfied Count 5 22 27

% of Total .5% 2.2% 2.7%

Somewhat Satisfied Count 84 158 242

% of Total 8.4% 15.8% 24.2%

Not Satisfied Count 364 52 416

% of Total 36.4% 5.2% 41.6%

Count 500 500 1000

% of Total 50.0% 50.0% 100.0%

Aliasghar Kodhaverdi/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

are completely satisfied with internet usage 4. Reasons for not satisfied with internet *
and followed by 22(2.2%) of the
respondents in the village have said that they Majority of the respondents 120(12%) in the
are completely satisfied by internet usage. city have said that they are not satisfied with
(Table.2.P.52) internet usage because of the

4. Reasons for not satisfied with Place Total

internet* Place
City Village

Not Applicable Count 183 144 327

% of Total 18.3% 14.4% 32.7%

Low Speed of Internet Count 120 126 246

% of Total 12.0% 12.6% 24.6%

Filtering of Website Count 72 109 181

% of Total 7.2% 10.9% 18.1%

All Count 125 121 246

% of Total 12.5% 12.1% 24.6%

Count 500 500 1000

% of Total 50.0% 50.0% 100.0%

5 .Tariff of Internet * Place Place Total

City Village
Unaware Count 194 156 350

% of Total 19.4% 15.6% 35.0%

Satisfied Count 54 56 110

% of Total 5.4% 5.6% 11.0%

Not Satisfied Count 252 288 540

% of Total 25.2% 28.8% 54.0%

Count 500 500 1000

% of Total 50.0% 50.0% 100.0%

Aliasghar Kodhaverdi/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

low speed of internet and followed by the respondents in the village have said that
126(12.6%) of the respondents in the village they can rarely have access to the internet.
have said that they are not satisfied because Majority of the respondents in the city have
of the low speed of internet. (Table4. P.53) said that they are not satisfied with internet
5 .Tariff of Internet * Place usage and followed by of the respondents in

Majority of the respondents 288(28.8%) in the village have said that they are satisfied

the village have said that they are not with internet usage somewhat.

satisfied with tariff of internet and followed This paper concludes services provided by

by 252(25.2%) of the respondents in the city m-Government lead to better, faster and less

have said that they are not satisfied with limited provision of services to citizens.

tariff of internet. (Table.5, P.53) Also Thus, it is suggested that organizations and

56(5.6%) of the respondents in the village institutes in the governmental sector should

have said that they are satisfied with tariff of take effective steps in presenting mobile

internet. Only 54(5.4%) of the respondents services with regards to the capability of

in the city have said that they are satisfied every region considering the expansion of

with tariff of internet. mobile telephone infrastructures in Iran. To

7. CONCLUSION do so, the condition of every region should

The mobile-Government (m-Government) is be studied regarding the level of technology

one of the most important concepts that have and preparation and then the presenting

been in the top consideration for the last services stage should be selected in such a

decades. Majority of the respondents are in way to have the most efficiency for citizens.

the city have internet connection and minor This fact not only will increase the

respondents from village also have internet efficiency of governmental sectors but also

connection on the mobile. Also some of the will fulfill the citizens’ satisfaction.

respondents from city and village have no REFRENECES

internet connection. Mobile operators should Asiimwe Edgar Napoleon, M. Shakhawat Hossain Bhuiyan ,
Contemporary Research on Mobile Government , M G
to take this as a opportunity for grow WORLD.
Asghar Afshar Jahanshahi1 , Seyed Mohammad Sadeq Khaksar ,
themselves. Noor Mohammad Yaghoobi and Khaled Nawaser,
Comprehensive model of Mobile Government in Iran ,
Indian Journal of Science and Technology Vol. 4 No. 9
Most of the respondents in the city have said (Sep 2011) ISSN: 0974- 6846 .
Bogdan, R. C. and Biklen, S. K. (1982) Qualitative Research for
that they can have access to internet Education: An Introduction to Theory and Methods.
Boston: Allyn and Bacon.
connection seven days a week. Only some of

Aliasghar Kodhaverdi/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

Borg, W. R. and Gall, M. D. (1989) Educational Research: An

Introduction 5th. edn. New York: Longman. Bouma, G. D.
and Atkinson, G. B. J. (1995) A Handbook of Science
Social Research. 2nd. ed. London: Oxford University Press.

Bryman, 1.A (1989) Research Method and Organizational Studies.

London: Unwin Hyman.

Burgees, R.G. (ed) (1985a) Issues in Educational Research:

Qualitative Methods, Lewes, The Farmer Press.

Burgees, R.G. (ed) (1985b) Field Research in the Study of

Education, Lewes, The Farmer Press.

Cordella, Antonio and Tempini, Niccolò (2015) E-government and

organizational change: reappraising the role of ICT and
bureaucracy in public service delivery. Government
Information Quarterly, 32 (3). pp. 279-286. ISSN 0740-

Ibrahim Kushchu, M. Halid Kuscu , E-government to M-

government: Facing the Inevitable , he proceeding of
European Conference on E-Government (ECEG 2003).

Siti Hawa Abdullah, Madya Or. Santhiram Raman, Quantitative

and qualitative research methods: some strengths and
weaknesses,Jurnal Pendidik dan Pendidikan, Jilid 17,

International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.


Vol.2, Issue No.3, Jul- Sep 2016




BBA Evolution of e - Marketing has been one of the most important
Department of Management and influential trends in the field of business, marketing and
Faculty Member information technology over the recent years. E-Marketing
Department of Management helps selling of goods and services using digital technologies.
Nizam College These technologies are creating a competitive advantage to
Osmania University the brands and companies while the traditional marketing
Hyderabad-500007. methods are still followed. The basics of marketing remain the
same - creating a strategy to deliver the right information to
the right people at the right time. It has revolutionized the
Opportunities process of marketing the goods and services with the advent
Challenges of social media to reduce gap between the consumers and
E- Marketing businesses.
India The paper discuss the opportunities and challenges of E-
marketing in India, a systematic review on the present
© 2016 IJARSH. All rights reserved.
changes, the strategies implemented by marketers with the
development of electronic environment in India, discussing
about the drawbacks. Finally some suggestions are made to
the Indian marketing companies for the improvement of E -

As Internet becoming more widely available and used,

Received: 2 Feb 2016
Revised: 2 Mar 2016 Electronic commerce and e marketing have become most
Accepted: 14 May 2016
Published: 10 Sep 2016 popular. Well over one third of consumers who have Internet
access in their homes repot using the Internet to make
purchases. E-Mail marketing, as the word itself suggests
marketing through electronic mails, is becoming more

Revanth Kumar. G/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

predominant in recent times for most of the developing new international markets
companies as they are using it for their without the existence of representative or
benefit. It is a form of direct marketing for sales offices and agents. The Internet also
commercial communicating or fund raising provides new methods to improve customer
messages to audience. The core of e-mail services and is considered as the most cost-
marketing conceder very email sent to effective marketing tool as it reduces paper
potential customers or a targeted client. works and number of staff as well as by
E-marketing means using digital passes operating offices.
technologies to help sell you goods or This paper evaluates the opportunities and
services. challenges of E- marketing upon business
Email marketing is a form of direct and its significance of E marketing in India.
marketing that allows the brand to connect 2. OBJECTIVES OF STUDY
with a huge database of audiences. It is more To review the present scenario of E-
effective and inexpensive mode of Marketing in India
communication. To Identify the Opportunities and
The development of e marketing has been Challenges of E-Marketing in India
one of the most important and influential 3. SCOPE OF STUDY

trends in the field of business marketing and The Study is on the subject of E – Marketing
information Technology offer the past in India, which include the strategies,
decade. It has revolutionized the manner in opportunities and challenges of the
which certain businesses market their companies using E-Marketing in India.
products and the advent of social media 4. SOURCES OF DATA

offers the potential to revolutionize the The study is carried out using Secondary

manner in which business and consumers data. The data has been collected from the

interact in the future. Research papers, journals, articles, books

The benefits of using Internet marketing are and various websites also.

for different company sizes. It is a new 5. E-MARKETING IN INDIA

medium for advertising and PR (Public Growth of E Marketing in India

relationship) and a new product distribution With more than 198 million Internet users,

channel. In addition to this, Internet India was the third-largest online market

marketing offers new opportunities for ranked only behind China and the United

Revanth Kumar. G/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

States and declaring itself as a market not to in 2014. Happily, three signs of growth are
be ignored on the global stage. Of the evident that could break the slow progress of
millions of Internet users in India, come Internet marketing in India and could lead
from the 25-34 age brackets of those who into a promising future. You can see this
use the Internet at home or at work what through the existence of small sites, the role
makes the 38 percent usage of internet, a of social media, and innovative ideas. The
percentage that was higher than any other development of small websites is an integral
age group surveyed. Additionally, men part in the strategy to promote businesses
dominated internet usage with 61 percent to online. Advertising products and services
women’s 39 percent. 5.1 hours, it is the turns easy through this means. Potential
average daily online usage in the country customers are readily accessible through the
amongst internet users. Internet

One opinion whereby, as of second quarter Definitely the Cost-effectiveness and

2015, India shares the characteristics of interactivity its the most striking aspect of
other global Internet users is its passion for future digital marketing in India. Also, there
social media, with Facebook being the most is easy accessibility – a benefit considering
popular social networking site with a 53 that traditional Indian marketing had to face
percent active reach. Other popular networks the huge obstacle of reaching out to Indian
include Google+, Twitter and LinkedIn. masses in the most resource-effective way.
Social media and communication also The additional difficulties, which Indian
proved popular with mobile phone users in audiences have is the linguistic differences –
the country with the number of monthly something that digital marketing can choose
active users of WhatsApp reaching 70 to stay away from. The future of digital
million. India has been the last 5 years in a marketing in India seems bright and
great journey reference to online growth. In beautiful. Future Media is a Digital
2011 till 2014 the online users in India Marketing Agency in India that makes
doubled from 120 million to 278 million simple to reach your target audience with
users. Mobile also showed amazing progress distinctive online marketing strategy. The
with 900 million mobile connections and future of digital marketing will be rooted in
220 million smartphone shipments in India how marketers and platforms create ways

Revanth Kumar. G/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

for new and traditional media to play The Internet is no longer a specialty
together. Now, India’s rapidly economic technology as far as Socio Economic Class
improvement made the country one of the A and perhaps even B is concerned it is
world’s fastest growing economies. It’s more powerful than mass media as it is an
large and growing and can quadruple GDP utterly integral part of modern life and it is
and catapult India to the ‪unity,‪‪of developed interactive. By online media almost no
economies over the next decade. aspect of life remains untouched. As our
lives become busier and cluttered, when it
Internet has been the biggest contributing
comes to researching and buying products it
factor in this growth. With a growth
isn’t surprising that consumers turn to the
percentage of 30% in the year gone by, it is
matchless, convenience of the Internet,”-
unarguably the sector with highest growth
N.S.Muthukumaran, Director, Online
rate in India. By needing of skilled Internet
Research, The Nielsen Company, India.
marketing workforce, jobs continue to be
By the end of FY2007-08, the e-commerce
created. We need to recognize new
market in India has already reached Rs.9,
opportunities and prepare the supply side.
210crore. According to a survey conducted
by the Internet and Mobile Association of
To buy online is within the theoretical India (IAMAI) and Indian Market Research
constructs Behavior and intentions of Bureau (IMRB) this segment had market
Internet users the Theory of Reasoned size of Rs.7,080crore at the end of 2006-07
Actions. The Theory of Reasoned Action and growth at an average rate of 30 per cent
(Fishbein, 1980) examines the relationship in 2007-08. According to the study, the three
between future intention to participate in major triggers of e-Commerce in India were
these buying behaviors and attitudes. saving of time, convenience associated with
According to Cheung et al (Online shopping at home and the availability of a
Consumer Behavior: A Review and Agenda range of products. However, the report also
for Future Research, 2003), for the highlighted problems to growth such as
development of an online consumer product quality, security issues with regard
behavior framework a base model called to e-transactions and the ability to bargain.
Model of Intention, Adoption, and
Continuance (MIAC).

Revanth Kumar. G/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

Dr Subho Ray, President, IAMAI, said, accessible website the cornerstone of web
“Consumer e-commerce is a major driver of marketing it will be hard to reach customers
the economy and we are happy that it has that don’t live in the same town or have
achieved a very decent size in India. It is never heard of the company. Companies
perhaps the only sector which has operated such as Thumbs up or Life style, businesses
under, sometimes, hostile and at all other that aren’t household names of global
times indifferent policy environment.” visibility begin on the Web. Having a sound
The “Online shoppers tend to stick to the Internet marketing strategy ensures the best
shopping sites they are familiar with. chance of success.
Capturing the online shoppers early and Businesses continue to refine their tactics
creating a positive shopping experience for and strategy with a focus on
them would prove beneficial in the long run Engagement: How to engage the audience
for marketers,” said Muthukumaran. and best connect (customer service).
Audience: How to find and target their
INDIAN COMPANIES Tools: What are the best social media tools?
When entering an Internet marketing zone, a Measurement: How to measure their return
company should identify some important on investment from their social activities?
issues such as different target customers, 8. VOICE OF INDIAN RETAILERS
another way to contact customers, Internet As per the study conducted by
security, new competitors, etc. along with Retailer
In the 21st century for most people running association of India (RAI) in the year of
a company, Internet marketing strategies are 2015, 3rd annual Retail e-Marketing unified
an indispensable part of the business plan. voice of Indian retailers. The
While small businesses such as local shops extensive Indian Retail e-Marketing
may require some form of web marketing, study has been prepared by the ardent
any business that wants a broad customer participation from more than 80+ retailers
reach should research the potential of a solid across India. The data was collected over a
Internet marketing strategy. period of 30 days from 20th April to 19th
As commerce continues to go global, May 2015, comprising responses from the
companies that lack an easy-to-find, industry rule setters to budding startups

Revanth Kumar. G/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

operating as Single or Multi brands in online

and offline domains. The study encompasses
feedback and opinion from 63% of senior
managers, which includes CXOs, Directors
and VPs.
Listed below are the key data charts that
define the online marketing strategies
adopted by Indian retailers in 2015.
3. 77% still prefer Print Promotion when
1. 44% of the Indian Retailers use mix of
it comes to offline advertising
both online and offline marketing

4. 74% Retailers want to increase their

2. 77% retailers voted social media as the investment on social media followed by
most prevalent channel for customer
Email Marketing
engagement with Email Marketing and

Revanth Kumar. G/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

5. 57% of Retailers want to increase

investment on Print followed by On
Ground Events (45%)

8. 41% Retailers use responsive emails

and websites

6. 57% Retailers feel that Email

Marketing is very important for

9. Facebook followed by Twitter is

preferred social networks for engagement

7. 91% Retailers send less than one email

in a week to avoid consumer backlash

Revanth Kumar. G/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

10. 95% of Indian Retail find mobile

important for marketing communication

13. 72% with turnover of Rs20 – Rs100

crore generate more than 30% revenue
from online

11. 97% consider a mobile app to be

important, 29% already have one

The paper clearly shows that E-marketing
impacts in various numbers of ways upon
businesses. When used effectively, e-
marketing campaigns and strategies have the
potential to reach customers in a speedy and

12. 48% have allocated more than 10% low-cost manner and can provide promotion

budget for online to a wide range of products and services.

The development of e-marketing and social
media advertising has led to many
businesses opportunities in recent years.
Despite globalization speed and the extent of
information that can be gained from E-

Revanth Kumar. G/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

marketing will surely help the business to

develop, when implemented properly. On
the other hand the technology driven
approach of E-marketing leaves certain
businesses vulnerable and overly dependent
upon technology. It also empowers
dissatisfied consumers to a far greater extent
than ever before and can lead to bad reviews
that have the potential to greatly destabilize
certain e-marketing campaigns and
operations. However, despite these problems
it is reasonable to conclude that E marketing
is on the whole a positive development for
businesses and that despite certain dangers.
Its impact upon businesses has been largely

International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.


Vol.2, Issue No.3, Jul- Sep 2016




Research Scholar From the era of industrial revolution to the era of
Department of Business Management
technological revolution, the sense of responsibility exhibited
Osmania University by individuals towards the society and their fellow beings has
Hyderabad-500007. drastically risen. Despite leading a busy life, every person
shows some societal responsibility. The same is applicable in
its full sense to the business enterprises too. Business
CSR enterprises apart from earning profits for themselves and their
Evaluation stakeholders need to contribute towards the upbringing of the
Approach society. This led to the evolution of the concept of corporate
social responsibility (CSR). The idea that business enterprises
© 2016 IJARSH. All rights reserved.
have some responsibilities to society beyond that of making
profits for the shareholders has been around for centuries. By
doing so, business creates wealth in society and provides
better standards of living. The present-day CSR (also called
corporate responsibility, corporate citizenship, responsible
business and corporate social opportunity) is a concept
whereby business organizations consider the interest of
Received: 23 Feb 2016
Revised: 23 Mar 2016 society by taking responsibility for the impact of their
Accepted: 29 May 2016
Published: 10 Sep 2016 activities on customers, suppliers, employees, shareholders,
communities and other stakeholders as well as their
environment. This obligation shows that the organizations
have to comply with legislation and voluntarily take initiatives
to improve the well-being of their employees and their
families as well as for the local community and society at
large. CSR simply refers to strategies corporations or firms
conduct their business in a way that is ethical and society

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

friendly. CSR can involve a range of domains (Sen et al. 2006) and that firms
activities such as working in partnership with higher CSR ratings may have a
with local communities, socially sensitive sustainable competitive advantage rooted in
investment, developing relationships with human capital as they attract more and better
employees, customers and their families, employees than firms with lower CSR
and involving in activities for environmental ratings (Carmeli 2005; Hunt et al. 1989;
conservation and sustainability. This article Turban and Greening 1997). Consequently,
focusses its attention on the concept of CSR, in order to pursue sustainable development,
the laws related to CSR and the role of and, achieve a good reputation in a fiercely
Government in implementation of CSR. competitive market, more and more
companies are publishing their CSR
disclosures and CSR reports. Since the
The early roots of corporate social 1950s, CSR and
responsibility can be traced back to 1917, its related terms,
when Henry Ford announced that the aim of such as
Ford Motor company is that “To do as much corporate social
as possible for everybody concerned, to responsiveness,
make money and use it, give employment corporate social
and send out the car where the people can responses,
use it and incidentally to make money” (Lee corporate social performance, corporate
2008, p. 54). CSR initiatives are very citizenship and corporate philanthropy have
important in the context of business ethics been conceptualized and mainly originated
(Maignan and Ferrell 2004). During the last from the management area (e.g., Carroll
57 years, several findings have caught the 1979; Matten and Crane 2005; Wood 1991).
attention of CSR practitioners and scholars. Over the decades, the concept of corporate
These include studies which suggested that social responsibility (CSR) has continued to
CSR activities provide an “insurance-like” grow in importance and significance. It has
protection when negative events happen been the subject of considerable debate,
(Godfrey et al. 2009); that CSR activities not commentary, theory building and research.
only influence sales growth, but also In spite of the ongoing deliberations as to
influence the employment and investment what it means and what it embraces, it has

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

developed and evolved in both academic as interest in CSR in the European Union and
well as practitioner communities worldwide. around the world.
The idea that business enterprises have some 2. OBJECTIVES OF THE STUDY
responsibilities to society beyond that of  To Study the evaluation of corporate
making profits for the shareholders has been social responsibility.
around for centuries. For all practical  To study the role of government for
purposes, however, it is largely a post-World implementation of CSR.
War II phenomenon and actually did not  To overview the CSR related laws.
surge in importance until the 1960s and 3. BACKGROUND AND HISTORICAL

beyond. Therefore, it is largely a product of PERSPECTIVES

the past half century. Today, one cannot The roots of CSR certainly extend before

pick up a newspaper, magazine or journal World War II, but we will not go back that

witho far. It should be noted, however, that Dean

ut Donald K. David’s comments to the

enco incoming MBA class at the Harvard

unteri Business School in 1946 are especially

ng appropriate to recall. Dean David exhorted

some the future business executives to take heed

discu of the responsibilities that had come to rest

ssion of the issue, some recent or innovative on the shoulders of business leaders (Spector

example of what business is thinking or 2008). In this connection, Bert Spector has

doing about CSR, or some new conference argued that the roots of the current social

that is being held. The business community responsibility movement can be traced to the

has formed its own organizations period 1945–1960, the early years of the

specializing in the topic. Business for Social Cold War. He has argued that Dean David

Responsibility (BSR), is a business and other advocates of expanded notions of

association founded in 1992 to provide CSR used this as a means of aligning

corporations with expertise on the subject business interests with the defense of free-

and an opportunity for business executives market capitalism against what was then

to advance the field and learn from one perceived to be the danger of Soviet

another. There has been an explosion of Communism (Spector 2008). In the 1950s,

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

there was some limited discourse about (Levitt 1958). In spite of Levitt’s warnings,
CSR. Frank Abrams, a former executive CSR would grow in popularity and take
with Standard Oil Company, New Jersey, shape during the 1960s, driven largely by
introduced concerns about management’s the social movements that defined the times,
broader responsibilities in a complex world especially in the US, and by the forward-
(Abrams 1951). Abrams argued that, as thinking academics who were attempting to
management was professionalizing, articulate what CSR really meant and
companies had to think not just about profits implied for business. In the US, the most
but also about their employees, customers important social movements of the 1960s
and the public at large. And Howard R. included civil rights, women’s rights,
Bowen published his seminal book, Social consumers’ rights and the environmental
Responsibilities of the Businessman in 1953 movement. Key events, people and ideas in
(Bowen 1953). Bowen’s book was these movements were instrumental in
noticeably ahead of its time, by at least a characterizing the social changes ushered in
decade, but it came to shape significantly during the 1960s. In each of these arenas,
future thought on the subject. William C. business perceived expectations being
Frederick, a noted contributor to the CSR communicated which eventually had to be
literature, argued that there were three core addressed. Thus, the foundation for CSR
ideas about CSR that stood out in the 1950s. was being developed by a quickly changing
These included the idea of the manager as social environment and pressures from
public trustee, the balancing of competing others, especially activists, to adopt CSR
claims to corporate resources, and corporate perspectives, attitudes, practices and
philanthropy – business support of good policies. In the 1960s, companies initially
causes (Frederick 2006). During the 1950s, did not perceive a ‘social’ environment in
there was scant discussion of linking CSR the way that we do today. Yet, piece by
with benefits for businesses themselves. The piece, the overall social environment was
primary focus was on businesses’ being constructed by these movements and
responsibilities to society and doing good the result would be a dramatically different
works for society. Theodore Levitt closed context, in which business would then have
out the 1950s by warning the business world to operate. Though the 1960s seemed ripe
about the dangers of social responsibility for advances in social responsibility thought,

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

the decade was still reeling from Professor actions taken for reasons at least partially
Theodore Levitt’s admonitions about ‘the beyond the firm’s direct economic or
dangers of social responsibility’. Levitt technical interest’ (Davis 1960, p. 70). At
thought that social concerns and the general the same time, William C. Frederick argued
welfare were not the responsibility of that businesses’ resources should also be
business, but of government, and that used for broad social goals (Frederick 1960,
business’s job was to ‘take care of the more p. 60), and Joseph McGuire posited that
material aspects of welfare’. Levitt feared social responsibility urges corporations to
that attention to social responsibilities would assume certain responsibilities to society
detract from the profit motive that was so which extend beyond their economic and
essential for business success. But, there legal obligations (McGuire 1963). A later
were also positive voices advocating the analysis by Patrick Murphy argued that the
social responsibility movement. In fact, 1960s and early 1970s were the ‘Awareness’
significant progress was made by both and ‘Issue’ eras of CSR. This was a period
government and academics, and businesses of changing social consciousness and
were following in parallel. As the 1960s recognition of overall responsibility,
transitioned into the 1970s and beyond, the involvement in community affairs, concern
particular emphasis in the CSR concept about urban decay, correction of racial
evolved primarily through the academic discrimination, alleviation of pollution, and
contributions in the literature and the slowly the continuing philanthropic era in which
emerging realities of business practice. This there was a focus on charitable donations by
history and evolution has been treated businesses (Murphy 1978). From about the
elsewhere (Carroll 1999, 2008; Lee 2008), 1950s forward, Hay and Gray characterized
so only some thematic highlights are this period of CSR development as ‘Quality
touched upon here. The CSR literature of Life Management’, as contrasted with
expanded significantly during the 1960s, and earlier periods, which emphasized profit
it tended to focus on the question of what maximization and trusteeship management
social responsibility actually meant and its (Hay and Gray 1974). Frederick
importance to business and society. Keith characterized the 1960s and 1970s as a stage
Davis argued that social responsibility of ‘corporate social responsiveness’
referred to ‘businessmen’s decisions and (Frederick 2008). Another characteristic of

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

the 1960s was an absence of any coupling of was also about placing an emphasis on
social responsibility with financial achieving results or emphasizing the
performance (Lee 2008, p. 58). In other outcomes of socially responsible initiatives
words, social responsibility was driven (Carroll 1979; Wartick and Cochran 1985;
primarily by external, socially conscious Wood 1991). This focus on outcomes was
motivations, and businesses were not moving the field closer to the idea of the
looking for anything specific in return. ‘business case’. At least when outcomes are
Formal definitions of CSR began to emphasized, this sets the stage for attempts
proliferate in the 1970s, and the overall to measure or gauge the results of CSR
trajectory was towards an emphasis on CSP policies and practices. On the CSR front, the
(Carroll 1999; Sethi 1975). The 1970s was 1980s produced fewer new definitions of the
the decade in which corporate social concept, more empirical research, and the
responsibility, responsiveness and rise and popularity of alternative themes.
performance became the center of These CSR variants included corporate
discussions. Ackerman (1973) and Murray public policy, business ethics and
(1976) argued that what was really stakeholder theory/ management as well as
important was not that companies were further developments in CSP which arrived
‘assuming a responsibility’, but that on the scene in the 1970s (Carroll 1999, pp.
companies were responding to the social 285–289). Frederick termed the 1980s as the
environment. Frederick (1978) formalized beginning of the ‘corporate/business ethics’
this distinction by differentiating corporate stage, wherein the focus became fostering
social responsibility (CSR1) from corporate ethical corporate cultures (Frederick 2008).
social responsiveness (CSR2). CSR1 Research seeking to link CSR with corporate
emphasized companies ‘assuming’ a socially financial performance (CFP) exploded
responsible posture, whereas CSR2 focused during this decade, and the search for a
on the literal act of responding or of tighter coupling with firm financial
achieving a responsive posture towards performance became the order of the day
society. In the mid-1970s, an emphasis on (Lee 2008, p. 58). One could well argue that
CSP more clearly emerged. In one respect, the search for the business case for CSR
CSP was an attempt to reconcile the began and came-of-age during this decade,
importance of both CSR1 and CSR2, but it especially for academic researchers. This

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

trend continued in the 1990s, and the quest development of the social responsibility
for CSR accelerated in terms of its global theme, though significant advances were
outreach. The 1990s and 2000s became the made, especially in the UK and continental
era of global corporate citizenship Europe (Moon 2005). The quest for the
(Frederick 2008). The early 2000s became business case for CSR certainly became a
preoccupied with the Enron Era of scandals, dominant theme during this period,
and these headlined the news until 2008, especially as the business community was
when the Wall Street Financial Scandals Era seeking to rationalize and legitimize the
began wreaking havoc all over the globe and activities it had begun and were continuing.
will most likely be with us for some time In the early 2000s, the business community
(Carroll 2009). Though CSR continued its became fascinated with the notion of
quest to find business legitimacy, the sustainability, or sustainable development,
emergence and preoccupation with business and this theme became an integral part of all
ethics obscured the continued growth and CSR discussions.

Model Focus Champions

Ethical Voluntary commitment by companies to public welfare M.K Gandhi
Statist State ownership and legal requirements determine Jawaharlal Nehru
Corporate responsibility
Stakeholder Companies respond to the needs of stakeholders- R. Edward Freeman
customers, employees, communities, etc.
Liberal Corporate responsibilities limited to private owners Milton Friedman
Secchi (2007) and Lee (2008) reported that market performance. The pioneer of this
the definition of CSR has been changing in view, Oliver Sheldon (1923, cited in Bichta,
meaning and practice. The classical view of 2003), however, encouraged management to
CSR was narrowly limited to philanthropy take the initiative in raising both ethical
and then shifted to the emphasis on standards and justice in society through the
business-society relations particularly ethic of economizing, i.e. economize the use
referring to the contribution that a of resources under the name of efficient
corporation or firm provided for solving resource mobilization and usage. By doing
social problems. In the early twentieth so, business creates wealth in society and
century, social performance was tied up with provides better standards of living. The

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

present-day CSR (also called corporate community and society at large. CSR simply
responsibility, corporate citizenship, refers to strategies corporations or firms
responsible business and corporate social conduct their business in a way that is
opportunity) is a concept whereby business ethical and society friendly. CSR can
organizations consider the interest of society involve a range of activities such as working
by taking responsibility for the impact of in partnership with local communities,
their activities on customers, suppliers, socially sensitive investment, developing
employees, shareholders, communities and relationships with employees, customers and
other stakeholders as well as their their families, and involving in activities for
environment. This obligation shows that the environmental conservation and
organizations have to comply with sustainability. This article aims to analyze
legislation and voluntarily take initiatives to three theories of CSR namely utilitarian,
improve the well-being of their employees managerial and relational in terms of their
and their families as well as for the local meaning and practical emphases.
In India, the concept of CSR is governed by
clause 135 of the Companies Act, 2013,
which was passed by both Houses of the
Parliament, and had received the assent of
the President of India on 29 August 2013.
The CSR provisions within the Act is
applicable to companies with an annual
turnover of 1,000 crore INR and more, or a
net worth of 500 crore INR and more, or a
net profit of five crore INR and more. The
new rules, which will be applicable from the
Act lists out a set of activities eligible under
CSR. Companies may implement these
activities taking into account the local
conditions after seeking board approval. The
indicative activities which can be

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

undertaken by a company under CSR have implementation and monitoring process is in

been specified under Schedule VII of the compliance with the CSR objectives, in
Act. The draft rules (as of September 2013) letter and in spirit. This has to be signed by
provide a number of clarifications and while either the CEO, or the MD or a director of
these are awaiting public comment before the company.
notification, some the highlights are as 6. THE ROLE OF GOVERNMENT
follows: From the industrial revolution to recent
• Surplus arising out of CSR activities will years, social objectives have been almost
have to be reinvested into CSR initiatives, entirely the responsibility of government.
and this will be over and above the 2% Social movements, NGO activity and
figure pressure groups during the 70s and 80s led
• The company can implement its CSR to the mobilisation of public opinion
activities through the following methods: - demanding from corporations to
Directly on its own - Through its own non- demonstrate a socially responsible stance.
profit foundation set- up so as to facilitate Since the earlier twentieth century,
this initiative - Through independently European member states have developed
registered non-profit organisations that have legislation to control the relationship
a record of at least three years in similar between employee and the firm, health and
such related activities - Collaborating or safety at work, issues of environmental
pooling their resources with other interest, discrimination and equal
companies opportunities at workplace. Across Europe,
• Only CSR activities undertaken in India state owned companies were created to
will be taken into consideration pursue commercial and social objectives,
• Activities meant exclusively for employees whereas private sector companies were
and their families will not qualify allowed to pursue their commercial
• A format for the board report on CSR has objectives almost exclusively. Legislation,
been provided which includes amongst regulation and taxation have been the
others, activity-wise , reasons for spends favourable tools employed by government to
under 2% of the average net profits of the promote and protect social objectives. In the
previous three years and a responsibility area of the environment, ‘command and
statement that the CSR policy, control’ techniques have been favoured by

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

the European Union since the 1970s whereas have been passed to support sustainable
a shift towards ‘shared responsibility’ development including the climate change
between government and industry is another levy, the community investment tax credit
favourable policy approach since the mid- and the Pensions Act. The company law
1990s. In the UK, the government’s review (1998-2002) has rejected the concept
privatization programme of the 1980s of ‘pluralism’ which would have required
shifted public expectation of the private directors to consider the interests of other
sector. Whilst until then, social objectives stakeholders as well as pursuing the interests
had been mainly the responsibility of of shareholders, but the government’s white
government, the privatization of gas, water paper, which incorporated the review’s
and electricity introduced a new paradigm. It recommendations, has communicated the
created public companies owned by message that directors would be foolish to
shareholders pursuing the same kind of omit such matters.22 23 A question of
financial returns as in any other public interest therefore in the contemporary debate
company, but the companies had also clear of CSR is whether government should assist
social objectives. In the case of the business to exceed its legal obligations and
privatized utilities, these social objectives hence commit itself to socially responsible
were managed through the regulatory behaviour, as defined in current terms. A
regime, but the existence of the companies second question considers the nature of a
as ‘stock market vehicles’ demonstrated that potential government role: Should
financial and non-financial objectives could government create the opportunities/enable
co-exist (Cowe, Porritt, 2002). The Labour business to opt for the business case for
government has maintained the interest to CSR? Or should government create the
‘bridge’ public and private, social and environment for business to realise the
financial objectives by drawing the private potentials of seeking legitimacy directly
sector into the provision of social goods ie, from the firm’s stakeholders rather than
public-private partnerships. The government shareholders alone?
has taken steps to reinforce the 7. CONCLUSION
responsibility of the private sector with The ever increasing business enterprise is
regard to its social and environmental just one side of the coin. The existence of
impact. A number of legislative measures social problems is another side. Both

Uday Kumar Kalva/International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

industries and social problems in the society David Polášek, M.B.A., Corporate Social Responsibility in Small
and Medium-Sized Companies in the Czech Republic,
Escuela superior de marketing y administración barcelona,
are growing hand in hand. The czech management institute praha, Faculty of Management,
implementation of CSR by various business Dr. Hind Bushra Ahmed Ibrahim , The Role of Kenena Sugar
Company’s CSR in Community Development Case Study:
enterprises can make the growth inversely Fangoa Cluster Communities, White Nile State, Sudan ,
Journal of Economics and Sustainable Development, Vol.6,
proportional. The business enterprises No.11, 2015 .
Maimunah ISMAIL ,corporate social responsibility and its role in
community development: an international perspective ,
should incorporate CSR as one of their Uluslararası Sosyal Aratırmalar Dergisi The Journal of
International Social Research Volume 2 / 9 Fall 2009.
strategies to propagate their business and Martin Samy , Henry Itotenaan Ogiri , Roberta Bampton , (2015)
"Examining the public policy perspective of CSR
show their social responsibility towards the implementation in Sub-Saharan Africa", Social
Responsibility Journal, Vol. 11 Iss: 3, pp.553 – 572.
betterment of the society. Despite several Ms. Shruti Garg, CSR in context of Companies Act 2013 and
SMEs , International Journal of Enhanced Research in
Management & Computer Applications, ISSN: 2319-7471
laws, still the implementation of CSR is Vol. 4 Issue 1, January-2015, pp: (51-54), Impact Factor:
limited. The voluntary participation of Pavel Adámek , Opportunities and Options for Government to
Promote Corporate Social Responsibility in the Czech
companies to contribute their part to the Republic , World Academy of Science, Engineering and
Technology International Journal of Social, Behavioral,
societal development should be encouraged Educational, Economic, Business and Industrial
Engineering Vol:8, No:9, 2014 .
Younush Rana, CSR is become a tool for driving a roll to create an
and the Government should impose strict education to employment road map in India within in next 5
years, November 3, 2012.
rules for CSR implementation. Contributing Yuhui Gao,Shuo Wang , What Do We Know about Corporate
Social Responsibility Research? A Content Analysis, Irish
to resolve social problems along with Journal of Management on 27th January 2014 DOI:
earning profits for their stake holders will
also increase the scope of the industry. CSR
increases the sense of responsibility among
business firms.
REFERENCES corporate-social
Akinchan Buddhodev Sinha, corporate social responsibility: a key ite/corporate-social-responsibility
component in company’s growth , Management today -for a
better tomorrow An International Journal of Management>
Studies, Vol2, Issue.3,pp:34-42.
Anil Prasad, Corporate Citizenship and Community Engagement:
Role of Corporate in CSR Projects (March 7, 2012).
Available at
Ankit Sharma, Handbook on Corporate Social Responsibility in
Archie B.Carroll And Kareem M. Shabana, The Business Case for
Corporate Social Responsibility: A Review Of Concepts,
Research and Practice, International Journal of
Management Reviews (2010) DOI: 10.1111/j.1468-
Constantina Bichta,corporate social responsibility a role in
government policy and regulation?, University of
BathSchool of Management, Centre for the study of
regulated Industries, d from the CRI’s web site, which
includes events and the publications list.

International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.


Vol.2, Issue No.3, Jul- Sep 2016




BBA1 M-Pesa, a mobile-phone based electronic payments system
Faculty Member
has become an asset to all kinds of people in Uganda
Department of Business Management
Nizam College because of its convenience, reliability and popularity. M-
Osmania University Pesa has recently proven to be a major power as a company
and in terms of usage to the people of Uganda due to its
KEYWORDS capabilities to transform the financial fabric of society
particularly for traders between Kenya and Uganda. Since its
Mobile Money
launch in 2015, M-Pesa has contributed to the reduction of
communication costs in some parts of Uganda as a
developing country from prohibitive levels to amounts that
© 2016 IJARSH. All rights reserved. are in comparison, virtually trivial. This has left a major
impact to mobile advocates who are extremely enthusiastic
about its present performance. So now with its international
acclaim and all the support it’s receiving in the Ugandan
market, M-Pesa is set to transform the way the world does its

Received: 23 Dec 2015
Revised: 22 Feb 2016 M-Pesa officially came into existence in 2007 through
Accepted: 1 Apr 2016
Published: 10 Sep 2016 Vodafone for Safaricom which is the largest mobile network
operator in Kenya. It spread fast and by 2010 it had become
the most successful mobile-phone based financial service in
the developing world. M-Pesa is a mobile money transfer
system created to allow microfinance borrowers and senders
to conveniently send and receive money through the
conversation of cash through electronic systems which happen

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

at retail stores (agents). The transactions services across all borders. M-Pesa’s
are all recorded and authorized in real time success means that there is need for small
using secure SMS. electronic transactions and it’s designed
with certain limits on how much is to be
In 2015, Safaricom entered into a deal
transacted on a daily basis. M-Pesa acts as
with MTN a leading mobile network in
a role model to other mobile money
Uganda that will see their respective
transfer businesses because of its major
mobile money customers transfer money
success despite all the corruption and
to each other across the seven East African
development of technology with the
countries. The official merging between
attached disadvantages also. M-Pesa
two large mobile money operators now
subscribers can register for the M-Pesa
enables convenient sending of cash
services by filling up a simple form and
between M-Pesa customers in Kenya,
providing any identification proof. To load
Tanzania, DRC, Rwanda and Mozambique
the money on the wallet, the user needs to
with MTN mobile money customers in
visit the nearest agent and deposit cash
Uganda and Zambia as well. The
there and to access the service, the users
Safaricom Company has recorded over 1.5
will be required to dial *840# then follow
trillion transactions in the first semi
the instructions with the cash being sent in
quarter of 2015 with M-Pesa being its
Kenyan shillings and received in Ugandan
biggest revenue platform. Apparently the
shillings based on the prevailing exchange
two companies Safaricom and MTN boast
rates. The transaction charges depend on
about the very large number of active M-
the amount of money being transferred and
Pesa users with Safaricom having
whether the payee is a registered user of
22million M-Pesa users and MTN Uganda
the service plus the activation cost is a
with 5million mobile money users as well
fixed amount for a given range of
which is considered a great deal among
both companies.
“We are excited to offer affordable
According to the press,
remittance services from M-Pesa to MTN
Safaricom’s director of financial services
mobile users in Uganda”, said Mr. Phrase
Betty Mwangi said that this was yet
Lubega MTN Uganda’s General Manager
another affirmation of their intention to
in charge of financial services. He also
make it possible for their individuals and
mentioned that their subscribers will from
business customers to enjoy convenient,
now henceforth be able to cash out at any
affordable and reliable mobile money

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

of the 5500 agents across the country. The people to have access to a mobile phone,
partnership between MTN and Safaricom but do not have or have only limited
is set to increase trade between the two access to a bank account, to send and
nations and offer more cheap remittance receive money, top up airtime and bill
services especially since Uganda is one of payments. Customers register for the
Kenya’s top trading partners. The usage of service at an authorised agent, often this is
the mobile money transfer service is a small mobile store or retailer and then
mainly driven by the high number of deport the cash in exchange for electronic
traders operating from Kampala and other money which they can send to their
towns in the country and other kinds of families or friends. Once they have
regular day to day people like students, registered, all transactions are completed
teachers, doctors, lawyers, etc. M-Pesa is securely by entering a PIN number or code
also not classed as a deposit taking and both parties receive an SMS
institution such as a bank and its customers confirming the amount that has been
can deposit and withdraw money from a transferred. The recipient, who does not
network of agents that include airtime have to use the same network, receives the
resellers and retail outlets acting as electronic money in real- time and then
banking agents. The service enables its redeems it for cash by visiting another
users to; deposit and withdraw money, agent.
transfer money to users and non-users
Since its introduction in March of
(subscribers), pay bills, purchase airtime,
2007, the M-Pesa money transfer system
transfer money within the service and in
has seen its popularity with the un-banked
some nations like Kenya, Uganda,
population rush, making the application a
Tanzania, Rwanda, etc.
great success all over the country. In a
1.1 M-PESA countries like Kenya, Tanzania, Uganda

M-Pesa is the world's most successful and other low earning countries where

money transfer service. It’s one of the best almost 80% do not have access to the

products of Safaricom Kenya. It was traditional banking system and there are

developed by Vodafone which initially more mobile outlets like M-Pesa than

holds a 35% share in Safaricom. The “M” ATMs. Immediately after the system was

stands for mobile well as “Pesa” in Swahili launched, it was attracting new subscribers

stands for money. It’s a mobile based at the rate of 12000/day, quickly building a

transfer service that enables millions of massive network to operate. In addition to

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

the millions of person- to-person (P2P) was started, customers adopted the service
and customer-to-business (C2B) for a variety of alternative uses and
transactions, M-Pesa has made a big complications arose with MTN, the
difference to peoples' lives in other ways. partnering MFI. In discussion with other
For example in Tanzania where the cost of parties, M-Pesa was re-focused and
travel prevents many people from getting launched with a different value
the medical care they need, one non- proposition: sending remittances home
government organisation (NGO), across the country and making payments.
Comprehensive Community Based The transaction infrastructure between the
Rehabilitation in Tanzania (CCBRT), has two networks has been enabled by MFS
used M-Pesa to send patients the money to Africa, which develops and distributes
pay for their travel to its hospitals. In mobile financial solutions to markets
Kenya, water company customers use M- across Africa. MFS Africa's Chief
Pesa to buy credits which are transferred Executive Officer, Dare Okoudjou said,
from their phone to their key receiver “We are confident that the cashless
which is then used to pay for fresh, clean revolution that started in Kenya almost a
water when they need it. Since its decade ago, will now unlock not only
commercial launch in March of 2007, M- intra-African remittances but also serve as
Pesa has received substantial scale and a catalyst for trade and economic growth
influential awards as well. in the region.”

1.2 CONCEPT OF M-PESA The service does not require users to

have bank accounts. All they need to do is
The initial concept of M-Pesa had been to
register at an authorised M-Pesa agent by
create a service which would allow
providing their MTN mobile number and
microfinance borrowers to conveniently
their identification card. Once registered
receive and repay loans using the network
the user can buy digital funds at any M-
of Safaricom airtime resellers. This would
Pesa agent and send cash to any other
enable microfinance institutions (MFIs) to
mobile phone user in Uganda and other M-
offer more competitive loan rates to their
Pesa users across the Ugandan borders.
users, as costs are lower than when dealing
Apparently M-Pesa gives people too much
in cash. The users of the service would
access 24/7 to their cash which could
gain through being able to track their
eventually undermine the saving system.
finances more easily. When the service
Analysis shows that M-Pesa based cash

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

transfers are secure, enable a quick 2. OBJECTIVES OF THE STUDY

emergency response, are cost effective and To analyze the emergence and present
empower communities. The cash transfers status of M-Pesa in the Ugandan society.
give users a wide range of services and its 2.1 PLAN OF THE WORK

empowering the lower class people This paper studies the implementation,
especially to be able to send cash or regulations, services, status of M-PESA in
receive cash across countries and the Uganda and population of M-PESA Users.
ability of their phones to do the 2.2 PERIOD OF STUDY

transactions through SMS which expands The study has been conducted from the

the range of cheap communication emergence of M-Pesa in Uganda from2015

available. Safaricom has had to generate till date (2016).

super value services on M-PESA to be the 3. SCOPE OF THE STUDY

leader in the market. The following is a This paper focused on M-Pesa since its

breakdown of the services within entrance in Uganda. It provides a strategic

Safaricom the umbrella company under analysis on the evolving success of M-

which M-PESA operates. Primary Pesa and its current situation like its

activities include inbound logistics, performance and success rate.

inventory and warehouse operations,
New mobile financial service operators
marketing and sales, services aimed at
seek to mimic the success and market
maintaining and improving the product
penetration which Safaricom has been able
value, customer support and training.
to achieve. Between the years 2008 and
These are services that are outsourced by
2011, M-Pesa grew at 88% annually which
Safaricom to achieve the following
was not the case from when it was first
launched (Deb and Kubzansky, 2012).
optimize costs Never before has there been such a take up
acuteness in meeting customer of mobile financial technology. M-Pesa is
requirements and satisfaction also maintaining growth at an unexpected
Creation of a centralized as well as rate, with competitors having a negligible
distributed warehouse capacity to effect on their vast market penetration. M-
support growth to various locations in Pesa has influenced its status as a mobile
which Safaricom operates. phone operating network to create a
Ensure service level monitoring and profitable mobile financial system by
reporting of customer queries fundamentally altering the credit system in

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

place. masterfully tied together by Safaricom and

MTN ensure a growing demand with
M-Pesa unlocked a new medium facilities to produce sufficient supply for
for transfers and created an easier way to their innovative platform.
receive credit. In addition, it also improved
Before the development of M-Pesa, MTN
and accelerated avenues for trade, created
completely enjoyed a large lead in the
a higher demand for saving, as well as
market share of the Ugandan cell phone
allowed the risk to be spread out amongst
market. MTN reportedly controlled
a larger network. The transference of
approximately 65% of the market meaning
money has never been easier in the East
that the service for their phones was
African nation. Furthermore, the ease in
already reaching nearly almost the entire
which individuals can now save has
population. On the demand side, this
improved the informal credit market. With
extensive coverage allowed the company
an increase in transfers, individuals can
to build good relationships with its large
now be able to have a better and smooth
customer base. The new goal was to
consumption, receiving aid from friends
expand this network and create as much
and family in times of hardships or
market penetration as possible.
economic shock. The access to credit
generally raises the wealth and The most important parts of the M-
consumption of individuals. Pesa operations are their agents in the
field. Without competent and consistent
5. IMPLEMENTATION OF M-PESA IN agents, the development of M-Pesa would
UGANDA prove to be futile. An agent can create
With much of the infrastructure for M- demand and is the corporate representative
Pesa already in place, making the of M-Pesa, making them the cornerstone
transition from an idea to reality was not of the service-oriented platform. The
relatively easy. Five key areas needed to launch occurred on a massive scale and set
be addressed to ensure a successful launch the path to the rise as the major mobile
of the program include: a financial money service.
institution to hold their money,
Presented as a financial tool for the
cooperation with regulators (MTN), a
wealthy that was also accessible to the
supply of agents, cellular towers and
poor, a certain prestige was attached to the
servers and creating demand among
service, driving up demand. Research
consumers. All these aspects that were

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

shows that new technology excites complexity of oversight needed. Secondly,

individual and creates desire for the there is a lot of dynamism with disparate,
product. To make the product even more changing technologies and business
attractive, M-Pesa developed a platform models as MNOs and other parties explore
that was accessible to all phones. To cool emerging opportunities with the potential
the confusion that accompanies a switch to to change the financial landscape. Thirdly,
new services, MTN offered free simcard there is limited policy experience in other
upgrades, creating the first interaction countries and regions to draw on when
between customer and agent, and drafting relevant laws and regulations. As
establishing a platform to clear up any in most other developing countries,
confusion. national regulations have not kept pace
with developments in the field. It is
therefore imperative that regional and
Mobile money transactions present
national authorities identify and address
regulatory challenges ensure maximum
the gaps and potential overlaps between
development benefits. First, mobile money
their existing regulatory tools and mobile
traverses previously distinct and
money infrastructures.
independent areas of regulation (most
notably, the telecommunications and 7. OVERVIEW OF MOBILE MONEY
financial banking sectors and often PLAYERS IN UGANDA
involves multiple ministries and
Government agencies, thus adding to the
OVERVIEW MTN Mobile Airtel Money UTL M-Sente
Mobile operator MTN Uganda Airtel Uganda Uganda Telecom
MTN Uganda
Bank partners: Deposits Stanbic Uganda Standard Chartered DFCU Bank
Stanbic Uganda www.stanbicbank.c g/en
Bank Partners: Services Post Bank Uganda United Bank for Africa

Launch date March 2009 June 2009 March 2010

Service delivery STK STK USSD

Subscribers (May 2011) 1 900 000 135 000 60 000


Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

8. SERVICES neighbouring countries. Mobile money

M-Pesa has developed to provide a variety services can be broadly categorized into
of services that currently have different three groups.
fees for customers in Uganda and its
Types MTN Mobile Money Airtel Money UTL M-Senet
M-TRANSFERS Domestic transfers up to  Domestic transfers uo to  Domestic transfers up to
maximum of 1,000,000 maximum of 35,000 to maximum of 35,000 to
for both unregistered (off- unregistered (off-net) and both unregistered (off-net)
net) and registered (one- 70,000 to registered and registered (on-net)
net) users (on=net) users. users.
 Transfers from a user’s  Only MM platform that
phone to any bank account. registers users on other
M-PAYMENTS • Buy airtime (on- • Buy airtime (on-network) • Buy airtime (on-network)
network) • Pay postpaid phone bills • Educational institutions
• Pay postpay phone bills • Multichoice Uganda (Satellite (school fees)
• Educational institutions TV bills) • National Water & Sewage
(school fees) •Businesses(customer to Corporation (water bills)
• Multichoice Uganda and business i.e. payments) • Online payments
Star Tv (Satellite TV • Bulk payments (business to
bills) customer i.e. salaries)
• National Water & • Online payments
Sewage Corporation
(water bills)
• Online payments
• Financial institutions
(loan disbursements
and repayments)
• Businesses (customer to
business i.e. payments)
• Bulk payments (business
to customer i.e. salaries)
M-FINANCIAL • Mobile banking services • ATM withdrawal by phone • Transfer funds from and to
SERVICES for customers a
of Post Bank Uganda user’s Equity bank account
8. M-TRANSFERS to urban areas send money back to the
Money is transferred from one user to rural areas to support their extended
another, normally without an families. In this case, mobile money
accompanying exchange of goods or replaces traditional familiar methods like
services. These are also referred to as sending money with someone or by bus or
Person-to-Person (P2P) transfers and may taxi. Part of the success of M-Pesais
be domestic or international. Domestic m- connected to the lack of scale and
transfers still have the upper hand amongst reliability of informalmethods.16 For
the mobile money services across Uganda. example; consider an incident where
The extent of these transactions occurs person needs to urgently send money back
between urban and rural areas, as migrants to his or her village. This previously

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

required finding an individual that could like the National Water and Sewerage
be trusted, who was travelling to the Company in Uganda, have scrapped all of
relevant village and at the appropriate time their cash collection centres and resorted
(i.e. when the need arises). This individual to using banks and mobile money as the
should also know the recipients of the only ways for users to pay their dues.
funds and be willing to pass by their home
MNOs have also started cultivating
or link up with them to deliver the money.
merchants for m-payments, mainly
When considering that the person sending
targeting large entities with multiple
the money will most likely in any event
Outlets like supermarkets. For example,
uses a mobile phone to call ahead to alert
M-PESA and MTN as one are working
the relatives about the delivery that is to be
with Uchumi supermarkets in Uganda.
made and factoring in issues of reliability,
Many small businesses cannot qualify for
security and speed.
m-payments because they need to open a
9. M-PAYMENTS corporate account that requires them to be
Money is exchanged between two users legally registered with a range of
with an accompanying exchange of goods documents and a permanent physical
or services. From m-transfers, MNOs have address. Institutions in other sectors, such
broadened mobile money services to as education, health, tourism and
include a range of m-payments. MNOs insurance, are increasingly waking up to
started out by targeting individuals that the opportunities of using mobile money
receive recurrent payments from different as another payment channel for their
customers like utility companies (e.g. customers.
power, water, sewage, Pay TV, etc.) and
those that make bulk payments (e.g.
M-Pesa services may be connected to a
salaries and school fees). Many of these
bank account to provide the user with a
services were launched as free promotional
whole range of transactions (savings,
offers to help build the businesses and
credits) that they would generally access at
prove their utility to the consumer. Some
a bank branch. In other cases, users can
service providers have stated that they can
access different financial-related services
bear the cost for their customers remitting
like insurance, micro-finance, etc. via their
dues via mobile money because it affords
mobile phone. Some transactions spread to
them a cheaper avenue to collect dues
different service categories. For example, a
from customers on a regular basis. Others,
user can access his or her bank account

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

and transfer money to another bank financial needs of low-income households.

account holder or mobile money wallet Close to half of all 35 million Ugandans
without an accompanying exchange of live below the poverty line and earn less
goods or services. This leads to both m- than US$5 per day and only an estimated
transfers and m-financial services. one- fifth of this population have access to
Currently, M-Pesa transactions can be formal banking. With very little
local (within the jurisdiction of one infrastructure, this village is 450km away
country) or international (across different from the capital city (a day's journey on
national borders). the bumpy dirty road). The village is one
of many on the banks of Lake Victoria and
one of the most remote. Given a choice
M-Pesa is marketed as a money transfer
between buying from the fisherman from
service, but an estimated 40% of its
this village and any of the others closer to
customers now also use it for some form
the capital, most of the fish wholesalers
of savings. These numbers of its usage are
take the easier and most cost effective
growing and banks and other financial
route. To add to the woes of the fishermen,
institutions are more interested than they
many of the wholesalers loath to carry big
used to be in selling savings, loans, health
sums of cash required for the trade due to
and life insurance, pension and investment
high crime risk. Without a bank in the
products to these customers either via M-
village the locals were also forced to carry
Pesa rail or on their own. Worth noting in
cash after sales. Trade especially between
any discussion of Uganda is the greater
different countries and regions was
freedom mobile money network operators
suffering and the already improvised
enjoy with regard to banking services. In
residents of the villages as well were
most regulator environments, telecoms are
struggling to make ends meet until in
not allowed to be financial intermediaries
Uganda 2015 when M-Pesa was launched.
and in most cases, they must partner with
More particularly, the wholesalers were
banks to offer even mobile transfer.
now eager to do business with villages and
neighbouring countries as well that use M-
In an effort to spur financial inclusion for
Pesa as their risk has been significantly
the approximately 80% in Uganda without
reduced due to the electronic transactions
access to formal banking three years ago,
of mobile phones. The total number of
the government further relaxed rules for
registered customers increased by 30.1
mobile operators already serving the

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

percent from 14.2 million customers in MM subscription actually grew faster than
2013 to 18.5 million customers in 2014. mobile telephony subscription. For the
The number of transactions increased by review period, the number of mobile
28.9 percent from 38.3 million in 2013 to money subscribers grew by 10%, resulting
49.4 million in 2014 and the value of the into 1,846,773 new mobile money
transactions increased by 16.9 percent subscribers. On the other hand, the number
from 1,982 billion shillings in 2013 to of mobile SIMs subscribers grew by 14%
2,316 billion shillings in 2014. bringing on board 2,666,928 new mobile
subscribers. The drop in the growth rate of
Mobile money services is one of many the mobile money subscribers is partly
value-added services that since gained a attributed to inability of the agent network
significant foothold in the communications expanding fast enough to cope with extra
sector. Since its introduction about five demand for cash-in and cash-out services
years ago, mobile money services have needed by subscribers.
grown by leaps and bounds, to the point
where much as mobile telephony 12. UGANDA MOBILE MONEY
subscription grew faster than MM TRANSACTIONS, 2010 - 2014

subscription (14% compared to 10%),

when one makes adjustment for the multi-
SIM culture and environment in Uganda,

2010 2011 2012 2013 2014

Mobile money registered customers 3,683 2,829 5,662 14,243 18,529

(number '000)
Transactions (number '000) 28,820 87,500 94,500 38,351 49,418

Transactions (Value bn Shs) 963 3,753 4,900 1,982 2,316

Source: Uganda Communications Commission

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19,244,020 19,490,935
15,000,000 1 1 No of mobile
12,117,821 6 4 subscribers
% 4 %
7 Mobile
5,662,871 % 1 Money
0 Registered
% Subscribers

2011/12 2012/13 2013/14 2014/15


13. SERVICE CHARGES OF MTN UGANDA and individuals with bank accounts. M-

The mobile money agents represent a transfers are still the dominant form of

critical component of the mobile money transaction and given the lack of viable

ecosystem. They provide an interface alternatives, are priced at a premium. The

through which users cash-in (convert cash smaller the amount transferred, the higher

into mobile money) or cash-out (convert the total fee (sending + receiving) as a

mobile money into cash) allowing proportion of the amount transferred via

convertibility between mobile money and mobile money. For example, consider the

cash. In the beginning, both cash-in and lowest threshold on MTN Mobile Money.

cash-out transactions were associated with To transfer U Sh 5,000, the total fee

certain fees. However, with growing (sending +receiving) is U Sh 1,500, or 30

economies of scale and greater per cent of the transaction amount. For a

competition, all MNOs in EAC now offer transactional amount of U Sh30,000 within

cash-in services for free. Once users have the same threshold, the fee is similar, but

mobile money in their wallet, they can then corresponds to only 5 per cent of the

perform a range of the transactions transaction amount.

highlighted above. The range of possible Nevertheless, users are still willing topay
transactions is growing. Other payment because there are no cheaper alternatives
instruments like debit or credit cards in that will enable a user to send such small
EAC are still the preserve of the well-off amounts of money while taking into

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

account issues of reliability, security and seems set up to encourage registered users
speed associated with informal methods. to make more transfers amongst
In addition, it is always more expensive to themselves (and presumably find another
send money to a non-registered user than reason to stay with the provider) as
to a registered one. This holds true across opposed to non-registered users. For some
all mobile money platforms in EAC. For platforms (e.g. M-PESA), more money can
registered users, the total m-transfer fee is be sent in a single transaction to registered
split into a sending and a withdrawal than to non-registered users. Besides
component and shared between the sender attracting non-registered users to join the
and the receiver, making it appear cheaper platform, some may also argue that a
to both parties. For m-transfers to non- sender may have some influence over the
registered users, the cost is borne entirely receiver.
by the sender. The pricing mechanism
Amount UGX Sending Money UGX Withdrawing Money UGX

To registered user To non-registered Registered User Non-registered User

5000-30,000 800 1600 700 0

30001-60,000 800 2000 1000 0

60001-125,000 800 3700 1600 0

125,001-250,000 800 7200 3000 0

250,000-500,000 800 10,000 5000 0

500001-1,000,000 800 19000 9000 0

(Source: MTN Uganda website,


In the past year Safaricom has been on an Before licensing the telecom was not
expansion plan for M-Pesa across the allowed to handle outward cash
region, after the Central Bank Kenya transmission even to neighbouring Uganda
(CBK) awarded it a cash remittance for or Tanzania and had been offering
operating license last year, enabling it to onesided international cash transfer
carry money transfers out of the country. services moving money into Kenya

Nakyajja Joan1, G. Revanth Kumar /International Journal of Academic Research in Social Sciences & Humanities, 2(3), 2016.

through partners such as Western Union trust which will increase on their market
and Money Gram.The large population of penetration in Uganda making it another
Kenyan students who depend on huge success story or a major fail as well.
remittances from their parents or guardians
provide a big base for Safaricom to grow
M-Pesa's launch is enabling and advancing
its business in the country. Safaricom
the access to financial services in Uganda
signed a similar money transfer deal with
and across the Ugandan border making
Vodacom in Tanzania in March send
other competitor mobile networks come up
Rwanda's MTN in October this year.
with similar services just to reach its
Under the agreement with Vodacom,
standards which may not be possible
Safaricom subscribers sending money to
because of its fast growth. Though it has
Vodacom's M-Pesa network would be
almost just launched in Uganda (2015), it
charged one per cent of the value of
has shown a major increase in the number
transaction plus an exchange rate fee. The
of customers regardless of the challenges
same will also apply to Vodacom M-Pesa
it’s facing as well. With an increasing
customer base, M-Pesa is expected to gain
15. SUGGESTIONS a higher force making the mobile money
The fact that M-Pesa has found its way channel a vital part in transfer of small
into Uganda, shows how much power it sums of money country wide and
has over the East African countries and international wise. This report shows an
other developing countries and since it has update of how M-Pesa came about its way
started in Uganda in less than a year there to Uganda and its current status in Uganda.
is little information in aspects like how the
users are so far reacting to it, what they're
real conclusions to M-Pesa are, and so customers-get-access-to-seven-african-countries
much more. More researchers should find
out more about its evolution into the
market and what its competitors think and analyzing-7-african-markets
will do about it. M-pesa should also add service
more funds into advertising its services finance-service-for-emerging-markets
elsewhere in Uganda especially in the rural enters-uganda
areas, work on strict and better measures linked-to-m-pesa-kenya

to avoid fraud in order to gain customer