Cash handled by mobile money agents dropped for the second month in a row in February following the end of the fee waiver for cash transfers of up to Sh1,000.
The latest data from the Central bank of Kenya (CBK) shows that agents handled Sh567.99 billion from Sh590.36 billion in January.
Experts linked the drop to the return of charges on the mobile money transfers, and reduced cash-flow among Kenyans after they spent surplus cash on school expenditures when schools reopened in January.
“CBK ended the waiver on transfers of up to Sh1,000 in December and sending money became expensive for most Kenyans who were hit by the Covid-19 economic hardships,” said Ken Gichinga, the chief economist at Mentoria Economics.
“Other reliefs on VAT and PAYE also ended and this had an impact on the money available for spending,” he added.
The transaction volumes had been on a steady rise since May last year due to the waived charges, and also due to Kenyans looking to avoid handling hard cash in a bid to prevent the spread of the Covid virus.
It rose from Sh357.77 billion in May last year, maintaining a month-on-month rise to hit a record high of Sh605.69 billion in December.
The charge free transfers were set to lapse on June 30 last year but CBK unilaterally extended it to December drawing protests from Safaricom and banks who said they be consulted of the regulator wanted to extend the waivers.
Safaricom says that the free M-Pesa transfer cost it Sh9 billion in the six months to June, which saw the firm report a six percent drop in net profit to Sh33.07 billion—the first fall in nine years.