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Mobile money transactions growth hits 10-year record
Mobile cash transactions are on course for the highest annual growth in a decade, highlighting the economic recovery and the increasing use of cashless payments platforms.
Central Bank of Kenya (CBK) data shows that Safaricom’s M-Pesa, Airtel Money and Telkom’s T-Kash agents handled Sh5.64 trillion in the 10 months to October, a 38 percent jump from the corresponding period last year.
This is the fastest growth in cash handled by agents in the January-October period since 2011 — when it grew 60 percent to Sh938 billion — with monthly transactions likely to remain high this month due to the Christmas festivities that are characterised by heavy spending.
The sharp rise this year reflects the recovery of the economy, led by sectors such as transport, education, information and communication, wholesale and retail trade. In the second quarter of the year, the economy grew by 10.1 percent, the highest quarterly expansion in over four decades.
“Leading economic indicators point to a continuing recovery in the second half of 2021 also boosted by the full reopening of the economy,” said CBK governor Patrick Njoroge last week.
Kenyans have also embraced cashless payments following recommendations and incentives put in place last year to discourage the use of hard cash, which was deemed a potential avenue for spreading Covid-19.
The removal of fees for transfers between mobile wallets and bank accounts, which is still in force, has seen volumes go up.
Business owners now find it easier to deposit cash at mobile agencies and then transfer it to the bank, saving themselves the hassle of queuing in banking halls and the risk of transporting the cash physically to the bank branch.
The number of active mobile money agents rose from 287,410 in January to 295,105 in October, underlining the growing demand for their services across the country.
The number of active mobile money accounts also went up in the period, from 66.59 million to 66.88 million.
Mobile money platforms were, in the formative years, used primarily for person-to-person cash transfers but are now a major payment channel for businesses, a shift that has led to the growth in the amount of money moved through the wallets.
