KENYA:Mobile money deals up 42 percent on economic uptick

Cash handled by mobile money agents in the nine months to September jumped by Sh1.47 trillion compared to a similar period last year, indicating the growing dominance of mobile money usage in the economy.

Latest data by the Central Bank of Kenya (CBK) show agent transactions in the period rose by 41.5 percent to Sh5.02 trillion from Sh3.55 trillion in the same period in 2020.

The amount of money deposited or withdrawn in the nine-month period is almost equivalent to Sh5.21 trillion transacted in the 12 months to December 2020.

The volume of transactions increased by 19.6 percent or 261.9 million times to 1.599 billion from 1.337 billion over the period, indicating increased activity with the agents.

This is despite the economy still facing pandemic-induced struggles however, recovering.

The growth indicates increased business activity in some sectors, pushing demand for goods and services.

In a monetary policy committee in September, CBK Governor Patrick Njoroge pointed to a continued recovery supported by performance of construction, manufacturing, education, real estate, transport and storage and reopening of services sectors.

Stanbic Bank Kenya’s Purchasing Managers Index (PMI) also stated that production by private sector and new orders rose in September driven by continued recovery in demand, despite rising living costs that weigh on consumer spending.

The increased mobile money usage has also increased the number of active M-Pesa, Airtel Money and T-Kash agents to 305,831 in September from 263,200 in same month last year, underlining the growing demand for the outlets across the country.

This also means 1,009 agents were opened over a month from 304,822 registered in August and 16.2 percent or 42,631 rise over the nine months period.

The resultant economic fallout pushed traders and households into survival mode, resorting to the mobile money service operator business as a replacement for lost job or complement their reduced income.

Data from Communication Authority of Kenya show M-Pesa control the largest number of agents 89.8 percent of 283,357 operated in period ended June, while Airtel Money and T-Kash at 7.5 percent and 2.7 percent respectively.

Mobile money platforms were, in the formative years, used primarily for person-to-person cash transfers but are now used for payment of services and goods.