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KENYA: Mobile money deals drop on tight liquidity
CONSTANT MUNDA
Use of mobile phones in making payments dropped in January on the back of low circulation of cash in the economy.
The number of mobile payment deals declined by 4.04 million to 150.204 million in the first month of the year, down from 154.243 million in the review period, Central Bank of Kenya (CBK) data shows.
Payment deals worth Sh371.9 billion were completed through mobile phones during the month, a marginal 1.05 percent rise from Sh368.02 billion a year earlier.
Unlike during the early years when the mobile money platforms were largely used for person-to-person (P2P) cash transfers, they are now channels for initiating and cutting relatively low-value business deals such as purchases as well as processing instant short-term loans.
Findings of a monthly survey on private sector deals — Stanbic Bank Kenya Purchasing Managers Index (PMI) — showed firms in January posted lowest orders since October 2017.
“Overall activity levels contracted solidly at the start of the year, as firms reported that a lack of money at households led to much softer demand pressure,” the PMI report stated.
“The slowdown was chiefly domestic, as firms selling to international markets saw one of the sharpest increases in new export orders on record.”
The reduced mobile transactions also came on the back of suspension of operating permits of major betting firms such as SportPesa (which has since shut Kenyan operations) and BetIn. Sending money via mobile money is capped at Sh70,000 per transaction but a daily transaction ceiling of Sh140,000.
SOURCE: BUSINESSDAILY AFRICA
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