Mobile money transfer agents in Kenya are earning less profit compared to their regional peers despite recording higher daily transactions, a survey has shown.
The report, titled 'Agent Network Accelerator Survey', showed Kenyan agents earn a lower median profit level of $70 (Sh6,132) than agents in Tanzania at $95 (Sh8,323) and Uganda's $78 (Sh6,834).
Mike McCaffrey, head of digital finance at Africa Microsave, said new agents are consistently being recruited in Kenya, making it "flooded" and resulting in reduced profits.
"The large amount of agents in the market limits the profitability per agent while driving dissatisfaction from agents. Despite having an expansive network, it is still tethered to banking infrastructure for float management," he said.
McCaffrey said that 90 per cent of mobile money agents in Kenya offer M-Pesa services, leaving banks and other telecoms struggling for market share.
"In Uganda, 63 per cent of agencies offer MTN services while in Tanzania 55 per cent offer services for Vodacom, making Safaricom the most dominant provider with regards to agency business in East Africa," he said.
The report singles out fraud and robbery as the "most burdensome operational issue" agents have to deal with across East Africa.
"This is driving up the cost of doing business as they take preventive measures," McCaffrey said. The survey's data was collected between September and October last year from about 2,000 agents.